AMENDMENT NO. 14 TO LOAN AND SECURITY AGREEMENT
Exhibit 4.36
AMENDMENT
NO. 14 TO LOAN AND SECURITY AGREEMENT
AMENDMENT
NO. 14 TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as
of February 14, 2008 by and among
Handy & Xxxxxx, a New York corporation (“Parent”), OMG, Inc., a Delaware
corporation formerly known as Olympic Manufacturing Group, Inc. (“OMG”),
Continental Industries, Inc., an Oklahoma corporation (“Continental”), Maryland
Specialty Wire, Inc., a Delaware corporation (“Maryland Wire”), Handy &
Xxxxxx Tube Company, Inc., a Delaware corporation (“H&H Tube”), Camdel
Metals Corporation, a Delaware corporation (“Camdel”), Xxxxxxxx Metal Coating
Corporation, a Delaware corporation (“Canfield”), Micro-Tube Fabricators, Inc.,
a Delaware corporation (“Micro-Tube”), Indiana Tube Corporation, a Delaware
corporation (“Indiana Tube”), Xxxxx- Xxxxxxxx, Inc., a Wisconsin corporation
(“Xxxxx”), Handy & Xxxxxx
Electronic Materials Corporation, a Florida corporation (“H&H Electronic”),
Sumco Inc., an Indiana corporation (“Sumco”), OMG Roofing, Inc., a Delaware
corporation (“OMG Roofing”), OMNI Technologies Corporation of Danville, a New
Hampshire corporation (“OMNI” and together with Parent, OMG, Continental,
Maryland Wire, H&H Tube, Camdel, Xxxxxxxx, Micro-Tube, Indiana Tube, Xxxxx,
H&H Electronic, Sumco and OMG Roofing, each individually, a “Borrower” and
collectively, “Borrowers”), Handy & Xxxxxx of Canada, Limited, an Ontario
corporation (“H&H Canada”), ele Corporation, a California corporation
(“ele”), Alloy Ring Service Inc., a Delaware corporation (“Alloy”), Xxxxxx
Radiator Corporation, a Texas corporation (“Xxxxxx”), H&H Productions, Inc.,
a Delaware corporation (“H&H Productions”), Handy & Xxxxxx
Automotive Group, Inc., a Delaware corporation (“H&H Auto”), Handy
& Xxxxxx
International, Ltd., a Delaware corporation (“H&H International”), Handy
& Xxxxxx Peru, Inc., a Delaware corporation (“H&H Peru”), KJ-VMI Realty,
Inc., a Delaware corporation (“KVR”), Xxx-Xxxx Realty, Inc., a Delaware
corporation (“Xxx-Xxxx”), Platina Laboratories, Inc., a Delaware corporation
(“Platina”), Sheffield Street Corporation, a Connecticut corporation
(“Sheffield”), SWM, Inc., a Delaware corporation (“SWM”), Willing B Wire
Corporation, a Delaware corporation (“Willing” and together with H&H Canada,
ele, Alloy, Xxxxxx, H&H Productions, H&H Auto, H&H International,
H&H Peru, KVR, Xxx-Xxxx, Platina, Sheffield and SWM, each individually, a
“Guarantor” and collectively, “Guarantors”), Steel Partners II, L.P., a Delaware
limited partnership, successor by assignment from Canpartners Investments IV,
LLC, in its capacity as agent pursuant to the Loan Agreement (as hereinafter
defined) acting for the financial institutions party thereto as lenders (in such
capacity, together with its successors and assigns, “Agent”), and the financial
institutions party thereto as lenders (collectively, “Lenders”). Capitalized
terms used herein which are not otherwise defined herein shall have the
respective meanings ascribed thereto in the Loan Agreement.
W I T N E S S E T
H:
WHEREAS,
Agent, Lenders, Borrowers and Guarantors have entered into financing
arrangements pursuant to which Lenders (or Agent on behalf of Lenders) have made
and provided and may hereafter make and provide loans, advances and other
financial accommodations to Borrowers as set forth in the Loan and Security
Agreement, dated March 31, 2004, by and among Agent, Lenders, Borrowers and
Guarantors, as amended by Amendment
No. 1 to
Loan and Security Agreement, dated as of October 29, 2004, Amendment No. 2 to
Loan and Security Agreement, dated as of May 20, 2005, Amendment No. 3 and
Waiver to Loan and Security Agreement, dated as of December 29, 2005, Consent
and Amendment No. 4 to Loan and Security Agreement, dated as of January 24,
2006, Consent and Amendment No. 5 to Loan and Security
Agreement, dated as of March 31, 2006, Amendment No. 6 to Loan and Security
Agreement, dated as of July 18, 2006, Amendment No. 7 to Loan and Security
Agreement, dated as of October 30, 2006, Amendment No. 8 and Waiver to Loan and
Security Agreement, dated as of December 28, 2006, Consent and Amendment No. 9
to Loan and Security Agreement, dated as of December 28, 2006, Amendment No. 10
and Waiver to Loan and Security Agreement, dated as of March 29, 2007, Amendment
No. 11 to Loan and Security Agreement, dated as of July 20, 2007, Amendment No.
12 to Loan and Security Agreement, dated as of September 10, 2007, and Amendment
No. 13 to Loan and Security Agreement, dated as of November 5,
2007 (as the same now exists or may hereafter be further amended,
modified, supplemented, extended, renewed, restated or replaced, the “Loan
Agreement”), and the other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto (all of the foregoing, together with the Loan Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, being collectively referred to herein as the
“Financing Agreements”);
WHEREAS,
Borrowers have requested that Agent and Lenders make certain amendments to
the Loan Agreement and the other Financing Agreements, and Agent and Lenders are
willing to make such amendments, subject to terms and conditions set forth
herein;
WHEREAS,
by this Amendment, Borrowers, Guarantors, Agent and Lenders desire and intend to
evidence such amendments;
NOW
THEREFORE, in consideration of the foregoing, and the respective agreements and
covenants contained herein, the parties hereto agree as follows:
1. Definitions.
(a) Additional
Definitions. As used herein, the following terms shall have
the following meanings given to them below, and the Loan Agreement and the other
Financing Agreements are hereby amended to include, in addition and not in
limitation, the following:
(i) “Amendment
No. 14” shall mean Amendment No. 14 to Loan and Security Agreement, dated as of
February 14, 2008, by and among Borrowers, Guarantors, Agent and the Lenders, as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
(ii) “Amendment
No. 14 Effective Date” shall mean the first date on which all of the conditions
precedent to the effectiveness of Amendment No. 14 shall have been satisfied or
shall have been waived by Agent.
(iii) “PBGC
Security Agreements” shall mean, collectively, the PBGC Second Priority Security
Agreement, the PBGC Fourth Priority Security Agreement, and all other
agreements, documents and instruments at any time executed and/or delivered by
any Borrower or Guarantor with, to or in favor of the PBGC, the WHX Plan or
their respective subrogees which create (or purport to create) a lien upon any
Collateral securing the PBGC Debt, as all of the foregoing heretofore may have
been amended, modified, supplemented, extended, renewed, restated or
replaced.
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(iv) “Specified
OMNI EBITDA Amount” shall mean (a) $503,695 for the twelve (12) month period
ending on or about December 31, 2007; (b) $465,865 for the twelve (12) month
period ending on or about January 31, 2008; (c) $425,612 for the twelve (12)
month period ending on or about February 29, 2008; (d) $358,008 for the twelve
(12) month period ending or about March 31, 2008; (e) $303,502 for the twelve
(12) month period ending on or about April 30, 2008; (f) $212,673 for the twelve
(12) month period ending on or about May 31, 2008; (g) $138,557 for the twelve
(12) month period ending on or about June 30, 2008; (h) $85,131 for the twelve
(12) month period ending on or about July 31, 2008; (i) $(69,671) for the twelve
(12) month period ending on or about August 31, 2008; (j) $5,500 for the twelve
(12) month period ending on or about September 30, 2008, and (k) $0 for the
twelve (12) month period ending on or about October 31, 2008 and for each twelve
(12) month period ending on the last day of each month thereafter.
(v) “WHX
Rights Offering” shall mean the rights offering by WHX pursuant to which WHX is
distributing to the holders of its common stock subscription rights to purchase
shares of Capital Stock of WHX for up to an aggregate purchase price of
$200,000,000, which offering shall be substantially on the terms described in
the Registration Statement on Form S-1 filed by WHX with the Securities and
Exchange Commission prior to the Amendment No. 18 Effective Date.
(vi) “WHX
Subordinated Note Documents” shall mean the subordinated promissory note by
Parent in favor of WHX in respect of the Indebtedness permitted under Section
9.9(j) hereof and all other agreements, documents and instruments at any time
executed and/or delivered by any Parent, any Borrower or any Guarantor with, to
or in favor of WHX in connection therewith or related thereto, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
(b) Amendments to
Definitions.
(i) EBITDA. The
definition of “EBITDA” in Section 1.30 of the Loan Agreement is hereby amended
by deleting such definition in its entirety and replacing it with the
following:
“1.30 ‘EBITDA’
shall mean, as to any Person, with respect to any period, an amount equal to:
(a) the Consolidated Net Income of such Person for such period, plus (b) depreciation
and amortization for such period (to the extent deducted in the computation of
Consolidated Net Income of such Person), all in accordance with GAAP, plus (c) Interest
Expense for such period (to the extent deducted in the computation of
Consolidated Net Income of such Person), plus (d) the
Provision for Taxes for such period (to the extent deducted in the computation
of Consolidated Net Income of such Person), plus (e) the
Specified OMNI EBITDA Amount (if any) for such period, plus (f) non cash
accruals for such period for environmental liabilities with respect to the
Shpack landfill site located in Attleboro, Massachusetts (to the extent that (1)
such accruals were deducted in the computation of Consolidated Net Income of
such Person for such period and (2) the
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aggregate
amount of all such accruals does not exceed $2,062,000), plus (g) losses
realized during such period in connection with the inventory hedging program of
such Person (to the extent that such losses were deducted in the computation of
Consolidated Net Income of such Person for such period), plus (h) non
cash accruals for such period for audit fees incurred in 2007 for the fiscal
year 2006 audit of such Person (to the extent that (1) such accruals were
deducted in the computation of Consolidated Net Income of such Person for such
period and (2) the aggregate amount of all such accruals does not exceed
$1,000,000), plus (i) a one-time
non-cash charge incurred during fiscal year 2007 in connection with the redesign
of the post-retirement medical benefits owing to union employees of Xxxxxxxx (to
the extent that (1) such charge was deducted in the computation of Consolidated
Net Income of such Person for such period and (2) the amount of such charge
does not exceed $727,252), minus (j) gains
realized during such period in connection with the inventory hedging program of
such Person (to the extent that such gains were added in the computation of
Consolidated Net Income of such Person for such period), minus (k) cash
expenses incurred during such period in connection with environmental
liabilities with respect to the Shpack landfill site located in Attleboro,
Massachusetts, minus (l) cash
expenses incurred during such period in connection with the redesign of the
post-retirement medical benefits owing to union employees of Xxxxxxxx during
fiscal year 2007.”
(ii) Intercreditor
Agreement. The definition of “Intercreditor Agreement” in
Section 1.60 of the Loan Agreement is hereby amended by deleting such definition
in its entirety and replacing it with the following:
“1.60
‘Intercreditor Agreement’ shall mean the Amended and Restated Intercreditor
Agreement, dated December 28, 2006, as amended by Amendment No. 1 to Amended and
Restated Intercreditor Agreement, dated as of the Amendment No. 14 Effective
Date, by and among Agent, Working Capital Agent and the PBGC, as acknowledged
and agreed by Borrowers and Guarantors, as the same now exists or may hereafter
be amended, modified, supplemented, extended, renewed, restated or
replaced.”
(iii) Term B
Loan. The definition of “Term B Loan” in the Loan Agreement is
hereby amended by deleting such definition in its entirety and replacing it with
the following:
“ ‘Term B
Loan’ shall mean, collectively, (a) the term loan in the original principal
amount of $42,000,000 made by or on behalf of Term B Loan Lenders to
Borrowers on the Amendment No. 9 Effective Date as provided for in
Section 2.3C of the Working Capital Loan Agreement and (b) the additional
term loan in the original principal amount of $4,000,000 made by or on behalf of
Term B Loan Lenders to Borrowers on the Amendment No. 14 Effective Date as
provided for in Section 2.3C of the Working Capital Loan
Agreement.”
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(c) Interpretation. Capitalized
terms used herein which are not otherwise defined herein shall have the
respective meanings ascribed thereto in the Loan Agreement.
2. Optional
Prepayments.
(a) Section
2.1 of the Loan Agreement is hereby amended by adding the following Section
2.1(e) to the end of such Section:
“(e) Upon
the issuance or incurrence by Parent or any of its Subsidiaries of any
Indebtedness of the type described in Section 9.9(j) hereof or the receipt by
Parent or any of its Subsidiaries of a capital contribution from WHX with
proceeds from the WHX Rights Offering, and after making any mandatory
prepayments required under the Working Capital Loan Agreement, Borrowers may use
any or all of the remaining proceeds to prepay the Obligations.”
3. Mandatory
Prepayments.
(a) Section
2.3(b) of the Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(b) (i)
Upon the issuance or sale by any Borrower or any of its Subsidiaries of Capital
Stock of such Borrower or Subsidiary as permitted in Sections 9.7(b)(iii) and
(iv) hereof, or the issuance or incurrence by any Borrower or any of its
Subsidiaries of any Indebtedness of the type described in Section 9.9(e) hereof,
Borrowers shall immediately prepay the Working Capital Debt and Obligations in
an amount equal to 100% of the Net Cash Proceeds received by such Borrower or
Subsidiary in connection therewith as follows: first, to the
outstanding principal amount of the WC Term Loans, second, to the
outstanding principal amount of the WC Equipment Purchase Term Loans, third, to the
outstanding principal amount of the WC Supplemental Term Loans, and fourth, at Borrowers’
option, to either (A) the outstanding principal amount of the Term B Loan or (B)
the outstanding principal amount of the WC Revolving Loans so long as (in the
case of this clause (B) only) the Working Capital Agent establishes and
maintains a permanent Reserve against the Borrowing Base of all Borrowers in an
amount equal to the amount of such Net Cash Proceeds that are so applied by the
prepayment of the WC Revolving Loans.
(ii) Upon
the issuance or incurrence by Parent or any of its Subsidiaries of any
Indebtedness of the type described in Section 9.9(j) hereof or the receipt by
Parent or any of its Subsidiaries of a capital contribution from WHX with
proceeds from the WHX Rights Offering, Borrowers shall immediately prepay the
Working Capital Debt in an amount equal to the first $5,000,000 of the Net Cash
Proceeds received by Parent or any of its Subsidiaries in connection therewith
as follows: first, to the
outstanding principal amount of the WC Revolving Loans, second, to the
outstanding principal amount of the WC Term Loans, third, to the
outstanding principal amount of the WC Equipment Purchase Term Loans, fourth, to the
outstanding principal amount of the WC Supplemental Term Loans, and fifth, to the
outstanding principal amount of the Term B Loan.
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(iii) Within
thirty (30) days following the issuance or incurrence by Protechno France of
Indebtedness of the type permitted in Section 9.9(n) hereof, Borrowers shall
prepay the Working Capital Debt in an amount equal to the first $500,000 of the
Net Cash Proceeds received by Parent or any of its Subsidiaries in connection
therewith as follows: first, to the
outstanding principal amount of the Term B Loan until the outstanding principal
amount thereof is less than or equal to $42,000,000, second, to the
outstanding principal amount of the WC Term Loans, third, to the
outstanding principal amount of the WC Equipment Purchase Term Loans, fourth, to the
outstanding principal amount of the WC Supplemental Term Loans, and fifth, at Borrowers’
option, to either (A) the outstanding principal amount of the Term B Loan, or
(B) the outstanding principal amount of the WC Revolving Loans so long as (in
the case of this clause (B) only) Working Capital Agent establishes and
maintains a permanent Reserve in an amount equal to the amount of such Net Cash
Proceeds that are so applied by the prepayment of the WC Revolving
Loans.
(iv) The
provisions of this subsection (b) shall not be deemed to be implied consent to
any such issuance, incurrence or sale otherwise prohibited by the terms and
conditions of the Working Capital Loan Agreement or this
Agreement.”
(b) Section
2.3(c) of the Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(c) (i)
Upon the sale or disposition of any Collateral by any Borrower or any of its
Subsidiaries as permitted in Section 9.7(b)(ii) or (vi) hereof or upon the sale
or disposition of any Borrower or any of its Subsidiaries not otherwise
permitted by the terms of this Agreement but consented to by the Required
Lenders, Borrowers shall immediately prepay the Working Capital Debt as set
forth below, in an amount equal to 100% of the Net Cash Proceeds received by
such Borrower or such Subsidiary in connection with such sale or
disposition:
(A) if
such sale or disposition is of Inventory or Accounts, then such Net Cash
Proceeds shall be applied, first, to the
outstanding principal amount of the WC Revolving Loans, second, to the
outstanding principal amount of the WC Term Loans, third, to the
outstanding principal amount of the WC Equipment Purchase Term Loans, fourth, to the
outstanding principal amount of the WC Supplemental Term Loans, and fifth, to the
outstanding principal amount of Term B Loan; and
(B) if
such sale or disposition is of any Collateral (other than Inventory or
Accounts), then such Net Cash Proceeds shall be applied, first, to the
outstanding principal amount of the WC Term Loans, second, to the
outstanding principal amount of the WC Equipment Purchase Term Loans, third, to the
outstanding principal amount of the WC Supplemental Term Loans, and fourth, at Borrowers’
option, to either (x) the outstanding principal amount of the Term B Loan
or (y) the outstanding principal amount of the WC Revolving Loans so long as (in
the case of this clause (y) only) Working Capital Agent establishes and
maintains a permanent Reserve in an amount equal to the amount of such Net Cash
Proceeds that are so applied by the prepayment of the WC Revolving
Loans.
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(ii) Upon
the sale or other disposition by Parent of the Capital Stock of Indiana Tube
Denmark as permitted in Section 9.7(b)(v) hereof, Borrowers shall immediately
prepay the Working Capital Debt in an amount equal to 100% of the Net Cash
Proceeds received by Parent or any of its Subsidiaries in connection with such
sale or disposition as follows: first, to the
outstanding principal amount of the Term B Loan until the outstanding principal
amount thereof is less than or equal to $42,000,000, second, to the
outstanding principal amount of the WC Term Loans, third, to the
outstanding principal amount of the WC Equipment Purchase Term Loans, fourth, to the
outstanding principal amount of the WC Supplemental Term Loans, and fifth, at Borrowers’
option, to either (x) to the outstanding principal amount of the Term B Loan, or
(y) the outstanding principal amount of the WC Revolving Loans so long as (in
the case of this clause (y) only) Working Capital Agent establishes and
maintains a permanent Reserve in an amount equal to the amount of such Net Cash
Proceeds that are so applied by the prepayment of the WC Revolving
Loans.”
4. Financial Statements and
Other Information. Section 9.6(a) of the Loan Agreement is
hereby amended by deleting subsections (iii), (iv) and (v) from such Section in
their entirety and replacing them with the following:
“(iii) within
ninety (90) days after the end of each fiscal year (other than the fiscal years
ended December 31, 2003, December 31, 2004, December 31, 2005, December 31,
2006, December 31, 2007 and December 31, 2008), audited consolidated financial
statements of Parent and its Subsidiaries (including balance sheets, statements
of income and loss, statements of cash flow and statements of shareholders’
equity) and unaudited consolidating financial statements of Parent and its
Subsidiaries (including balance sheets and statements of income and loss), and
the accompanying notes thereto, all in reasonable detail, fairly presenting in
all material respects the financial position and the results of the operations
of Parent and its Subsidiaries as of the end of and for such fiscal year,
together with the unqualified opinion of independent certified public
accountants with respect to the audited consolidated financial statements, which
accountants shall be an independent accounting firm selected by Borrowers and
acceptable to Agent, that such audited consolidated financial statements have
been prepared in accordance with GAAP, and present fairly in all material
respects the results of operations and financial condition of Parent and its
Subsidiaries as of the end of and for the fiscal year then ended;
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(iv) within
one hundred fifty (150) days after the end of the fiscal year ended
December 31, 2007 and December 31, 2008, annual unaudited consolidated
financial statements of Parent and its Subsidiaries (including balance sheets,
statements of income and loss, statements of cash flow, and statements of
shareholders' equity) and annual unaudited consolidating financial statements of
Parent and its Subsidiaries (including balance sheets and statements of income
and loss), all in reasonable detail, fairly presenting in all material respects
the financial position and the results of the operations of Parent and its
Subsidiaries as of the end of and for the fiscal year then ended, all of which
unaudited consolidated financial statements and unaudited consolidating
financial statements (other than the statement of federal deferred tax assets
and liabilities) shall be certified to be correct by the chief financial officer
of Parent, subject to normal year-end adjustments and the absence of footnotes;
and
(v) within
one hundred fifty (150) days after the end of each fiscal year, audited
consolidated financial statements of WHX and its Subsidiaries (including balance
sheets, statements of income and loss, statements of cash flow and statements of
shareholders’ equity) and unaudited consolidating financial statements of WHX
and its Subsidiaries (including balance sheets and statements of income and
loss), and the accompanying notes thereto, all in reasonable detail, fairly
presenting in all material respects the financial position and the results of
the operations of WHX and its Subsidiaries as of the end of and for such fiscal
year, together with the unqualified opinion of independent certified public
accountants with respect to the audited consolidated financial statements, which
accountants shall be an independent accounting firm selected by WHX and
acceptable to Agent, that such audited consolidated financial statements have
been prepared in accordance with GAAP, and present fairly in all material
respects the results of operations and financial condition of WHX and its
Subsidiaries as of the end of and for the fiscal year then ended.”
5. Sale of Assets,
Consolidation, Merger, Dissolution, Etc. Section 9.7(b)(v) of
the Loan Agreement is hereby amended by deleting such Section in its entirety
and replacing it with the following:
“(v) the
sale or other disposition by Parent to WHX of all of the issued and outstanding
shares of Capital Stock in Indiana Tube Denmark; provided, that, (A)
as of the date of such sale or disposition and after giving effect thereto, no
Event of Default shall exist or have occurred and be continuing and (B) the Net
Cash Proceeds (if any) from such sale or disposition shall promptly be remitted
to Working Capital Agent for application to the Working Capital Debt in the
order and manner set forth in Section 2.4(c)(iii) of the Working Capital Loan
Agreement,”.
6. Encumbrances. Section
9.8(n) of the Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(n) [Intentionally
Deleted].”
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7. Indebtedness.
(a) Section
9.9(f)(iii) of the Loan Agreement is hereby amended by deleting such Section in
its entirety and replacing it with the following:
“(iii)
Borrowers and Guarantors shall not, directly or indirectly, make, or be required
to make, any payments in respect of such Indebtedness, except, as permitted by
the Intercreditor Agreement;”.
(b) Section
9.9(j) of the Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(j) unsecured
Indebtedness of Parent to WHX after the Amendment No. 14 Effective Date in
respect of a subordinated loan made by WHX to Parent with proceeds from the WHX
Rights Offering evidenced by or arising under the WHX Subordinated Note
Documents, provided, that:
(i) Agent
shall have received true, correct and complete copies of the WHX Subordinated
Note Documents and all other documents, instruments and agreements related
thereto, as duly authorized, executed and delivered by the parties thereto,
which shall be in form and substance satisfactory to Agent;
(ii) such
Indebtedness shall be unsecured and shall be subject and subordinate in right of
payment to the right of Agent and Lenders to receive the prior indefeasible
payment and satisfaction in full of all Obligations pursuant to a subordination
agreement, in form and substance satisfactory to Agent, between WHX and Agent,
as acknowledged by Borrowers and Guarantors,
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(iii) subject
to Section 2.3(b)(ii) hereof, the Net Cash Proceeds of such Indebtedness may be
used to make a voluntary prepayment in respect of the Obligations, provided, that, such
prepayment shall be made within three (3) Business Days of the receipt of such
Net Cash Proceeds; provided, further, that, if an
Event of Default shall exist or shall have occurred and be continuing, such Net
Cash Proceeds shall be applied in the order and manner provided for in Section
2.3(b)(ii) hereof.
(iv) Borrowers
and Guarantors shall not, directly or indirectly, make, or be required to make,
any payments in respect of such Indebtedness, except, that, Parent may make
regularly scheduled non-cash capitalized interest payments in respect of such
Indebtedness in accordance with the terms of the WHX Subordinated Note Documents
in the form of additional indebtedness having substantially the same
terms,
(v) Borrowers
and Guarantors shall not, directly or indirectly, (A) amend, modify, alter
or change in any material respect any of the terms of such Indebtedness or any
of the WHX Subordinated Note Documents, except, that, Parent may, after prior
written notice to Agent, amend, modify, alter or change the terms thereof so as
to extend the maturity thereof or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such Indebtedness other than
pursuant to payments thereof, or to reduce the interest rate or any fees in
connection therewith, or to release any liens on or security interests in any
assets or properties of Borrowers, or (B) redeem, retire, defease, purchase or
otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest
any sums for such purpose,
(vi) Borrowers
and Guarantors shall furnish to Agent all notices or demands in connection with
such Indebtedness either received by such Borrower or Guarantor or on its behalf
promptly after the receipt thereof, and all notices or demands sent by any
Borrower or Guarantor or on its behalf concurrently with the sending thereof, as
the case may be;”.
(c) Section
9.9(l) of the Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(l) [Intentionally
Deleted];”.
(d) Section
9.9 of the Loan Agreement is hereby amended by (a) deleting the period appearing
at the end of clause (m) of such Section and replacing it with “; and” and
(b) adding the following new clause as the end of such
Section:
“(n) unsecured
Indebtedness of Protechno France arising after the Amendment No. 14 Effective
Date to any third person (but not to any other Borrower or Guarantor), provided, that, each of the
following conditions is satisfied as determined by Agent: (1) in no event shall
the aggregate principal amount of such Indebtedness incurred during the term of
this Agreement exceed $1,500,000, (2) no Borrower or Guarantor shall guarantee
or otherwise be liable in respect of any of such Indebtedness, (3) Agent shall
have received not less than five (5) days prior written notice of the intention
of Protechno France to incur such Indebtedness, which notice shall set forth in
reasonable detail satisfactory to Agent the amount of such Indebtedness, the
person or persons to whom such Indebtedness will be
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owed, the
interest rate, the schedule of repayments and maturity date with respect thereto
and such other information as Agent may request with respect thereto, (4)
promptly following Agent’s request, Agent shall have received true, correct and
complete copies of all agreements, documents and instruments evidencing or
otherwise related to such Indebtedness, (5) the proceeds of the loans or other
financial accommodations giving rise to such Indebtedness shall be paid to
Working Capital Agent for application to the Working Capital Debt in the order
and manner set forth in Section 2.4(b) of the Working Capital Loan
Agreement, (6) as of the date of incurring such Indebtedness and
after giving effect thereto, no Default or Event of Default shall exist or have
occurred, (7) no Borrower or Guarantor shall, directly or indirectly, redeem,
retire, defease, purchase or otherwise acquire such Indebtedness or set aside or
otherwise deposit or invest any sums for such purpose, and (8) Protechno France
or Administrative Borrower shall furnish to Agent all notices or demands in
connection with such Indebtedness either received by Protechno France or any
Borrower or Guarantor or on its behalf promptly after the receipt thereof, or
sent by Protechno France or any Borrower or Guarantor or on its behalf
concurrently with the sending thereof, as the case may be”.
8. Loans, Investments,
Etc. Section 9.10(k) of the Loan Agreement is hereby amended
by deleting such Section in its entirety and replacing it with the
following:
“(k) unsecured
loans by Parent to WHX on or after the Amendment No. 10 Effective Date
for purposes other than those described in Section 9.10(j) hereof, provided, that, (i) the
aggregate outstanding amount of such loans shall not exceed the principal amount
of $7,000,000 at any time, (ii) within thirty (30) days after the end
of each fiscal month, Parent shall provide to Working Capital Agent and Agent a
report in form and substance satisfactory to Agent of the outstanding amount of
such loans as of the last day of the immediately preceding month and indicating
any payments received during the immediately preceding month, (iii) the
Indebtedness arising pursuant to such loans shall be evidenced by a promissory
note and the single original of such note shall be promptly delivered to Working
Capital Agent to hold as part of the Collateral under the Working Capital Loan
Agreement, with such endorsement and/or assignment by WHX as Working Capital
Agent may require, (iv) as of the date of such loans and after giving effect
thereto, Parent shall be Solvent, (v) as of the date of such loans and after
giving effect thereto, no Default or Event of Default shall exist or have
occurred and be continuing, (vi) the average Excess Availability under the
Working Capital Loan Agreement for the thirty (30) consecutive days immediately
preceding such loans shall not have been less than $5,000,000, (vii) on the date
of such loans and after giving effect thereto, Excess Availability under the
Working Capital Loan Agreement shall not be less than $4,000,000, and (viii)
such loans shall be repaid in full on the Termination Date.”
11
9. Financial
Covenants.
(a) Section
9.17(a) of the Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(a) EBITDA. Parent
and its Subsidiaries shall not permit EBITDA of Parent and its Subsidiaries
(other than the Specified Subsidiaries), on a consolidated basis, for the twelve
(12) consecutive fiscal months ending on the last day of each fiscal quarter to
be less than $30,000,000.”
(b) Section
9.17(d) of the Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(d) Senior Leverage
Ratio. Parent and its Subsidiaries shall not permit the Senior
Leverage Ratio as of the last day of each fiscal month to be greater than 4.125
to 1.”
10. Term. Section
13.1(a) of the Loan Agreement is hereby amended by deleting the first sentence
from such Section in its entirety and replacing it with the
following:
“This
Agreement and the other Financing Agreements shall become effective as of the
date set forth on the first page hereof and shall continue in full force and
effect for a term ending on June 30, 2009 (the “Termination Date”), unless
sooner terminated pursuant to the terms hereof.”
11. Conditions
Precedent. The provisions contained herein shall only be
effective upon the satisfaction of each of the following conditions precedent in
a manner satisfactory to Agent:
(a) Agent
shall have received this Amendment, duly authorized, executed and delivered by
Borrowers, Guarantors and the Lenders;
(b) Agent
shall have received, in form and substance satisfactory to Agent, Amendment No.
1 to the Intercreditor Agreement, duly authorized, executed and delivered by
Working Capital Agent and the PBGC and acknowledged by Borrowers and Guarantors,
which Intercreditor Agreement shall be in full force and effect;
(c) Agent
shall have received, in form and substance satisfactory to Agent, Amendment
No.18 to Loan and Security Agreement (the “Working Capital Amendment No. 18”),
duly authorized, executed and delivered by Working Capital Agent, Working
Capital Lenders, Borrowers and Guarantors, which Working Capital Amendment No.
18 shall be in full force and effect.
(d) Agent
shall have received, in form and substance satisfactory to Agent, a true and
correct copy of any consent, waiver or approval to or of this Amendment which
any Borrower or Guarantor is required to obtain from any other Person;
and
(e) no
Default or Event of Default shall have occurred and be continuing immediately
before and after giving effect hereto.
12
12. Representations, Warranties
and Covenants. Each Borrower and Guarantor hereby represents
and warrants to Agent and Lenders the following (which shall survive the
execution and delivery of this Amendment), the truth and accuracy of which
representations and warranties are a continuing condition of the making of Loans
and providing other financial accommodations to Borrowers:
(a) as
of the date hereof (i) all of the PBGC Debt (including without limitation, the
Waiver Amount and the Termination Amount) has been indefeasibly paid and
satisfied in full, (ii) the PBGC Security Agreements have been terminated,
cancelled and are of no further force and effect, (iii) Borrowers and
Guarantors have no other or further obligations or liabilities under the PBGC
Settlement Agreement or any of the other PBGC Agreements other than
indemnification and other obligations that expressly survive the termination
thereof, (iv) any and all security interests in and liens upon properties
and assets of Borrowers and Guarantors heretofore granted pursuant to the PBGC
Security Agreements have been terminated and released, and (v) the
$125,000,000 limitation on the Indebtedness permitted to be incurred by
Borrowers and Guarantors under the Working Capital Loan Agreement set forth in
Section 4 of the PBGC Settlement Agreement is no longer in effect;
(b) each
Borrower and Guarantor is a corporation duly organized and in good standing
under the laws of its jurisdiction of incorporation and is duly qualified as a
foreign corporation and in good standing in all states, provinces or other
jurisdictions where the nature and extent of the business transacted by it or
the ownership of assets makes such qualification necessary, except for those
jurisdictions in which the failure to so qualify would not have a Material
Adverse Effect;
(c) this
Amendment and each other agreement or instrument to be executed and delivered by
Borrowers and Guarantors in connection herewith (collectively, together with
this Amendment, the “Amendment Documents”), have been duly authorized, executed
and delivered by all necessary action on the part of each of the Borrowers and
Guarantors which is a party hereto and thereto and, if necessary, their
respective stockholders and is in full force and effect as of the date hereof,
and the agreements and obligations of each of the Borrowers and Guarantors
contained herein and therein constitute the legal, valid and binding obligations
of each of the Borrowers and Guarantors, enforceable against them in accordance
with their terms, except as enforceability is limited by bankruptcy, insolvency,
moratorium or other similar laws affecting creditors’ rights generally and by
general equitable principles;
(d) the
execution, delivery and performance of this Amendment and the other Amendment
Documents (a) are all within each Borrower’s and Guarantor’s corporate powers
and (b) are not in contravention of law or the terms of any Borrower’s or
Guarantor’s certificate or articles of incorporation, by laws, or other
organizational documentation, or any indenture, agreement or undertaking
(including, without limitation, the Working Capital Loan Agreement) to which any
Borrower or Guarantor is a party or by which any Borrower or Guarantor or its
property are bound;
13
(e) neither
the execution and delivery of this Amendment or the other Amendment Documents,
nor the consummation of the transactions contemplated hereby or thereby, nor
compliance with the provisions hereof or thereof (i) has resulted in or
shall result in the creation or imposition of any Lien upon any of the
Collateral, except in favor of Agent, or as expressly permitted by Section 9.8
of the Loan Agreement, (ii) has resulted in or shall result in the
incurrence, creation or assumption of any Indebtedness of any Borrower or
Guarantor, except as expressly permitted under Section 9.9 of the Loan
Agreement; (iii) has violated or shall violate any applicable laws or
regulations or any order or decree of any court or Governmental Authority in any
respect; (iv) does or shall conflict with or result in the breach of, or
constitute a default in any respect under any material mortgage, deed of trust,
security agreement, agreement or instrument to which any Borrower or Guarantor
is a party or may be bound (including without limitation the Working Capital
Loan Agreement), and (v) violates or shall violate any provision of the
Certificate of Incorporation or By-Laws of any Borrower or
Guarantor;
(f) No
action of, or filing with, or consent of any Governmental Authority, and no
consent, waiver or approval of any other third party (including without
limitation the PBGC) is required to authorize, or is otherwise required in
connection with, the execution, delivery and performance of this Amendment or
the other Amendment Documents;
(g) all
of the representations and warranties set forth in the Loan Agreement and the
other Financing Agreements, 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 in all material respects as of such date;
(h) the
Working Capital Amendment No. 18 has been executed and delivered by all parties
thereto and is in full force and effect; and
(i) no
Default or Event of Default exists or has occurred and is continuing on the date
hereof.
13. General
Release. Each Borrower and Guarantor may have certain Claims
(as hereinafter defined) against the Released Parties (as hereinafter defined)
regarding or relating to the Loan Agreement or the other Financing
Agreements. Agent, Lenders, Borrowers and Guarantors desire to
resolve each and every one of such Claims in conjunction with the execution of
this Amendment and thus each Borrower and Guarantor makes the release contained
in this Section. In consideration of Agent’s and Lenders’ entering
into this Amendment and agreeing to the substantial concessions as set forth
herein, each Borrower and Guarantor hereby fully and unconditionally releases
and forever discharges Agent and each Lender and their respective directors,
officers, employees, subsidiaries, branches, affiliates, attorneys, agents,
representatives, successors and assigns and all persons, firms, corporations and
organizations acting on any of their behalves (collectively, the “Released
Parties”), of and from any and all claims, allegations, causes of action, costs
or demands and liabilities, of whatever kind or nature, from the beginning of
the world to the date on which this Amendment is executed, whether known or
unknown, liquidated or unliquidated, fixed or contingent, asserted or
unasserted, foreseen or unforeseen, matured or unmatured, suspected or
unsuspected, anticipated or unanticipated, which such Borrower or Guarantor has,
had, claims to have had or hereafter claims to have against the Released Parties
by reason of any act or omission on the part of the Released Parties, or any of
them, occurring prior to the date on which this Amendment is executed, including
on account of or in any way affecting, concerning or arising out of or founded
upon this Amendment up to and including the date
14
on which
this Amendment is executed, including all such loss or damage of any kind
heretofore sustained or that may arise as a consequence of the dealings among
the parties up to and including the date on which this Amendment is executed,
including the administration or enforcement of the Loans, the Obligations, the
Loan Agreement or any of the other Financing Agreements (collectively, all of
the foregoing are the “Claims”). Each Borrower and Guarantor
represents and warrants that it has no knowledge of any claim by it against the
Released Parties or of any facts or acts or omissions of the Released Parties
which on the date hereof would be the basis of a claim by such Borrower or
Guarantor against the Released Parties which is not released
hereby. Each Borrower and Guarantor represents and warrants that the
foregoing constitutes a full and complete release of all Claims.
14. Effect of this
Agreement. Except as expressly amended pursuant hereto, no
other changes, waivers or modifications to the Financing Agreements are intended
or implied, and in all other respects the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
date hereof. To the extent that any provision of the Loan Agreement
or any of the other Financing Agreements are inconsistent with the provisions of
this Amendment, the provisions of this Amendment shall control.
15. Further
Assurances. Borrowers and Guarantors shall execute and deliver
such additional documents and take such additional action as may be requested by
Agent to effectuate the provisions and purposes hereof.
16. Governing
Law. The validity, interpretation and enforcement of this
Amendment and the other Financing Agreements (except as otherwise provided
therein) 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.
17. Binding
Effect. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
18. Headings. The
headings listed herein are for convenience only and do not constitute matters to
be construed in interpreting this Amendment.
19. Counterparts. This
Amendment 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 by
telefacsimile or other electronic method of transmission shall have the same
force and effect as the delivery of an original executed counterpart of this
Amendment. Any party delivering an executed counterpart of this
Amendment by telefacsimile or other electronic method of transmission shall also
deliver an original executed counterpart, but the failure to do so shall not
affect the validity, enforceability or binding effect of this
Amendment.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
15
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
on the day and year first above written.
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AGENT
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STEEL
PARTNERS II, LP, as Agent
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BORROWERS
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HANDY
& XXXXXX
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By:
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/s/
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Name:
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Title:
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OMG,
INC.
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By:
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/s/
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Name:
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Title:
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CONTINENTAL
INDUSTRIES, INC.
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By:
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/s/
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Name:
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Title:
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MARYLAND
SPECIALTY WIRE, INC.
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By:
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/s/
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Name:
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Title:
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HANDY
& XXXXXX TUBE COMPANY, INC.
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By:
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/s/
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Name:
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Title:
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CAMDEL
METALS CORPORATION
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By:
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/s/
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Name:
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Title:
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XXXXXXXX
METAL COATING CORPORATION
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By:
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Name:
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Title:
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MICRO-TUBE
FABRICATORS, INC.
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By:
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/s/
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Name:
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Title:
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INDIANA
TUBE CORPORATION
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By:
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/s/
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Name:
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Title:
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XXXXX-XXXXXXXX,
INC.
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By:
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/s/
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Name:
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Title:
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HANDY
& XXXXXX ELECTRONIC MATERIALS CORPORATION
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By:
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/s/
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Name:
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Title:
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SUMCO
INC.
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By:
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/s/
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Name:
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Title:
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OMG
ROOFING, INC.
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By:
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/s/
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Name:
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Title:
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OMNI
TECHNOLOGIES CORPORATION OF DANVILLE
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By:
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/s/
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Name:
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Title:
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GUARANTORS
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HANDY
& XXXXXX OF CANADA, LIMITED
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By:
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/s/
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Name:
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Title:
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ELE
CORPORATION
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By:
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/s/
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Name:
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Title:
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ALLOY
RING SERVICE INC.
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By:
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/s/
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Name:
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Title:
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XXXXXX
RADIATOR CORPORATION
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By:
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/s/
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Name:
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Title:
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H&H
PRODUCTIONS, INC.
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By:
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/s/
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Name:
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Title:
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HANDY
& XXXXXX AUTOMOTIVE GROUP, INC.
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By:
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/s/
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Name:
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Title:
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HANDY
& XXXXXX INTERNATIONAL, LTD.
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By:
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/s/
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Name:
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||
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Title:
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||
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HANDY
& XXXXXX PERU, INC.
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By:
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/s/
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Name:
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Title:
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KJ-VMI
REALTY, INC.
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By:
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/s/
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Name:
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||
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Title:
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XXX-XXXX
REALTY, INC.
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By:
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/s/
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Name:
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||
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Title:
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PLATINA
LABORATORIES, INC.
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By:
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/s/
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Name:
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||
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Title:
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SHEFFIELD
STREET CORPORATION
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By:
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/s/
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Name:
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Title:
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SWM,
INC.
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By:
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/s/
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|
Name:
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||
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Title:
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||
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WILLING
B WIRE CORPORATION
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By:
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/s/
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Name:
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Title:
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