Exhibit 4.23
AMENDMENT NO. 22 TO LOAN AND
SECURITY AGREEMENT
AMENDMENT NO. 22 TO LOAN AND SECURITY AGREEMENT
(this “Amendment”), dated as of March 12, 2009, by and
among Handy & Harman, 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 &
Harman Tube Company, Inc., a Delaware corporation (“H&H
Tube”), Camdel Metals Corporation, a Delaware corporation
(“Camdel”), Canfield Metal Coating Corporation, a
Delaware corporation (“Canfield”), Micro-Tube
Fabricators, Inc., a Delaware corporation
(“Micro-Tube”), Indiana Tube Corporation, a Delaware
corporation (“Indiana Tube”), Lucas-Milhaupt, Inc., a
Wisconsin corporation (“Lucas”), Handy & Harman
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, Canfield, Micro-Tube, Indiana
Tube, Lucas, H&H Electronic, Sumco and OMG Roofing, each
individually, a “Borrower” and collectively,
“Borrowers”), Handy & Harman of Canada, Limited, an
Ontario corporation (“H&H Canada”), ele
Corporation, a California corporation (“ele”), Alloy
Ring Service Inc., a Delaware corporation (“Alloy”),
Daniel Radiator Corporation, a Texas corporation
(“Daniel”), H&H Productions, Inc., a Delaware
corporation (“H&H Productions”), Handy & Harman
Automotive Group, Inc., a Delaware corporation (“H&H
Auto”), Handy & Harman International, Ltd., a Delaware
corporation (“H&H International”), Handy &
Harman Peru, Inc., a Delaware corporation (“H&H
Peru”), KJ-VMI Realty, Inc., a Delaware corporation
(“KVR”), Pal-Rath Realty, Inc., a Delaware corporation
(“Pal-Rath”), 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, Daniel, H&H
Productions, H&H Auto, H&H International, H&H Peru,
KVR, Pal-Rath, Platina, Sheffield and SWM, each individually, a
“Guarantor” and collectively,
“Guarantors”), Wachovia Bank, National Association, a
national banking association that is successor by merger to
Congress Financial Corporation, 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”).
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 Consent and
Amendment No. 1 to Loan and Security Agreement, dated as of August
31, 2004, Amendment No. 2 to Loan and Security Agreement, dated as
of October 29, 2004, Amendment No. 3 to Loan and Security
Agreement, dated as of December 29, 2004, Amendment No. 4 to Loan
and Security Agreement, dated as of May 20, 2005, Amendment
No. 5 to Loan and Security Agreement, dated as of September 8,
2005, Amendment No. 6 and Waiver to Loan and Security Agreement,
dated as of December 29, 2005, Consent and Amendment No. 7 to Loan
and Security Agreement, dated as of January 24, 2006, Consent and
Amendment No. 8 to Loan and Security Agreement, dated as of March
31, 2006, Amendment No. 9 to Loan and Security Agreement, dated as
of July 18, 2006, Amendment No. 10 to Loan and Security Agreement,
dated as of October 30, 2006, Amendment No. 11 and Waiver to Loan
and Security Agreement, dated as of December 28, 2006, Amendment
No. 12 and Consent to Loan and Security Agreement, dated as of
December 28, 2006, Amendment No. 13 and Waiver to Loan and Security
Agreement, dated as of March 29, 2007, Amendment No. 14 to Loan and
Security Agreement, dated as of July 20, 2007, Amendment No. 15 to
Loan and Security Agreement, dated as of September 10, 2007,
Amendment No. 16 to Loan and Security Agreement, dated as of
November 5, 2007, Amendment No. 17 to Loan and Security Agreement,
dated as of January 11, 2008, Amendment No. 18 to Loan and
Security Agreement, dated as of February 14, 2008, Amendment No. 19
to Loan and Security Agreement, dated as of February 14, 2008,
Amendment No. 20 to Loan and Security Agreement, dated as of
September 26, 2008, and Amendment No. 21 to Loan and Security
Agreement, dated as of October 29, 2008 (as the same 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.
22” shall mean Amendment No. 22 to Loan and Security
Agreement, dated as of March 12, 2009, by and among Borrowers,
Guarantors, Agent and Lenders, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
(ii) “Amendment No. 22
Effective Date” shall mean the first date on which all of the
conditions precedent to the effectiveness of Amendment No. 22 shall
have been satisfied or shall have been waived by Agent.
(iii) “Exempt
Subsidiary” shall mean that certain Subsidiary of Parent
designated as such in writing by Agent, Term B Loan Lender and the
Required Lenders.
(iv) “Lucas China”
shall mean Lucas-Milhaupt Brazing Materials (Suzhou) Co., Ltd., a
Chinese corporation that is a Subsidiary of Lucas, and its
successors and assigns.
(b) Amendments to Definitions
.
(i) Adjusted Eurodollar
Rate . The definition of “Adjusted Eurodollar
Rate” in Section 1.3 of the Loan Agreement is hereby amended
by deleting such definition in its entirety and replacing it with
the following:
“1.3 ‘Adjusted Eurodollar
Rate’ shall mean, with respect to each Interest Period for
any Eurodollar Rate Loan, the greater of (a) (i) with respect to
the Term B Loan, three and one-quarter (3.25%) percent per
annum, and (ii) with respect to all other Loans, one (1%) percent
per annum, and (b) the rate per annum (rounded upwards, if
necessary, to the next one-sixteenth (1/16) of one (1%)
percent) determined by dividing (i) the Eurodollar Rate for such
Interest Period by (ii) a percentage equal to: (A) one (1)
minus (B) the Reserve Percentage. For purposes
hereof, “Reserve Percentage” shall mean the reserve
percentage, expressed as a decimal, prescribed by any United States
or foreign banking authority for determining the reserve
requirement which is or would be applicable to deposits of United
States dollars in a non-United States or an international banking
office of Reference Bank used to fund a Eurodollar Rate Loan or any
Eurodollar Rate Loan made with the proceeds of such deposit,
whether or not the Reference Bank actually holds or has made any
such deposits or loans. The Adjusted Eurodollar Rate
described in clause (b)(ii) above shall be adjusted on and as of
the effective day of any change in the Reserve
Percentage.”
(ii) Applicable Margin
. The definition of “Applicable Margin” in
Section 1.8 of the Loan Agreement is hereby amended by deleting
such definition in its entirety and replacing it with the
following:
“1.8 ‘Applicable
Margin’ shall mean, at any time, as to the Interest Rate for
Prime Rate Loans (other than the Term B Loan) and the Interest Rate
for Eurodollar Rate Loans (other than the Term B Loan), the
applicable percentage (on a per annum basis) set forth below if the
Quarterly Average Excess Availability for the immediately preceding
fiscal quarter is at or within the amounts indicated for such
percentage:
|
Tier
|
Quarterly
Average
Excess
Availability
|
Applicable Prime Rate
Margin
|
Applicable Eurodollar Rate
Margin
|
|
Revolving Loans
|
Term Loans, Equipment
Purchase Term Loans
and Supplemental
Loans
|
Revolving Loans
|
Term Loans, Equipment
Purchase Term Loans
and Supplemental
Loans
|
|
I
|
$15,000,000 or
more
|
1.00%
|
1.50%
|
2.75%
|
3.25%
|
|
II
|
Equal to or
greater than $10,000,000 but less than $15,000,000
|
1.25%
|
1.75%
|
3.00%
|
3.50%
|
|
III
|
Less than
$10,000,000
|
1.50%
|
2.00%
|
3.25%
|
3.75%
|
provided , that , (i) the Applicable Margin shall
be calculated and established once each fiscal quarter (commencing
with the fiscal quarter commencing on or about April 1, 2009) and
shall remain in effect until adjusted for the next fiscal quarter,
(ii) each adjustment of the Applicable Margin shall be effective as
of the first day of each fiscal quarter based on the Quarterly
Average Excess Availability for the immediately preceding fiscal
quarter, and (iii) the Applicable Margin through the fiscal
quarter ending on or about March 31, 2009 shall be the amount set
forth in Tier I above. In the event that at any time
after the end of a fiscal quarter the Quarterly Average Excess
Availability for such fiscal quarter used for the determination of
the Applicable Margin is different than the actual amount of the
Quarterly Average Excess Availability for such fiscal quarter as a
result of the inaccuracy of information provided by or on behalf of
Borrowers to Agent for the calculation of Quarterly Average Excess
Availability, the Applicable Margin for such prior fiscal quarter
shall be adjusted to the applicable percentage based on such actual
Quarterly Average Excess Availability and any difference in the
amount of interest for the applicable period as a result of such
recalculation shall be, in the case of additional interest to be
paid, promptly paid to Agent, or in the case of excess interest
paid, reimbursed to Borrowers. The foregoing shall not
be construed to limit the rights of Agent and Lenders with respect
to the amount of interest payable after a Default or Event of
Default whether based on such recalculated percentage or
otherwise.”
(iii) Applicable Term B
Loan Margin . The definition of “Applicable
Term B Loan Margin” in the Loan Agreement is hereby amended
by deleting such definition in its entirety and replacing it with
the following:
“ ‘Applicable Term B Loan
Margin’ shall mean: (a) as to the Interest Rate for the
portion of the Term B Loan bearing interest at the Prime Rate, ten
(10%) percent per annum, and (b) as to the Interest Rate for the
portion of the Term B Loan bearing interest at the Adjusted
Eurodollar Rate, eleven and three-quarters (11.75%) percent
per annum.”
(iv) Continuing Reserve
. The definition of “Continuing Reserve” in
Section 1.27 of the Loan Agreement is hereby amended by
deleting such definition in its entirety and replacing it with the
following:
“1.27 ‘Continuing
Reserve’ shall mean a continuing Reserve in the amount of
$2,500,000 which shall remain in effect at all
times.”
(v) EBITDA
. The definition of “EBITDA” in Section 1.32
of the Loan Agreement is hereby amended by deleting such definition
in its entirety and replacing it with the following:
“1.32 ‘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) non cash accruals for
such period for environmental liabilities (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 previously added back pursuant to this clause
(e) and which remain accruals does not exceed $3,000,000),
minus (f) cash expenses incurred during such period in
connection with environmental liabilities to the extent accruals
relating to such environmental liabilities were added back pursuant
to clause (e) of this definition, 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), minus (h) 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).”
(vi) Eligible Accounts
. The definition of “Eligible Accounts” in
Section 1.33 of the Loan Agreement is hereby amended by
deleting the proviso to clause (e)(ii) of such definition and
replacing it with the following:
“ provided , that , a
Foreign Account shall not be deemed ineligible solely for failure
to comply with the requirements of this clause (e)(ii) so long as
the aggregate amount of all such Foreign Accounts does not exceed
at any time the lesser of (x) $3,000,000 and (y) the amount
equal to fifty (50%) percent of all Foreign
Accounts;”.
(vii) Intercreditor
Agreement . The definition of “Intercreditor
Agreement” in Section 1.66 of the Loan Agreement is hereby
amended by deleting such definition in its entirety and replacing
it with the following:
“1.66 ‘Intercreditor
Agreement’ shall mean the Intercreditor and Subordination
Agreement, dated as of February 14, 2008, as amended by Amendment
No. 1 to Intercreditor and Subordination Agreement, dated as of
October 29, 2008, and Amendment No. 2 to Intercreditor and
Subordination Agreement, dated as of the Amendment No. 22
Effective Date, by and among Agent, Bairnco Agent and
Tranche B Term Loan Agent, 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.”
(viii) Maximum Credit
. The definition of “Maximum Credit” in
Section 1.82 of the Loan Agreement is hereby amended by
deleting such definition in its entirety and replacing it with the
following:
“1.82 ‘Maximum
Credit’ shall mean $115,000,000.”
(ix) Prime Rate
. The definition of “Prime Rate” in
Section 1.105 of the Loan Agreement is hereby amended by
deleting such definition in its entirety and replacing it with the
following:
“1.105 ‘Prime Rate’ shall
mean, on any date, the greater of (a) the rate from time to time
publicly announced by Wachovia Bank, National Association, or its
successors, as its prime rate, whether or not such announced rate
is the best rate available at such bank, and (b) (i) with respect
to the Term B Loan, five (5%) percent per annum, and (ii) with
respect to all other Loans, three (3%) percent per
annum.”
(x) Quarterly Average
Excess Availability . The definition of
“Quarterly Average Excess Availability” in Section
1.138 of the Loan Agreement is hereby amended by deleting such
definition in its entirety and replacing it with the
following:
“1.138 ‘Quarterly Average Excess
Availability’ shall mean, at any time, the daily average
Excess Availability for the immediately preceding fiscal quarter as
calculated by Agent; provided , that , for purposes
of this definition, the calculation of the amount of the Borrowing
Base in the determination of the amount of Excess Availability
shall be computed without regard to the Continuing
Reserve.”
(xi) Revolving Loan
Limit . The definition of “Revolving Loan
Limit” in Section 1.120 of the Loan Agreement is hereby
amended by deleting such definition in its entirety and replacing
it with the following:
“1.120 ‘Revolving Loan
Limit’ shall mean, at any time, the amount equal to
$75,000,000, less the outstanding aggregate principal amount
of the Term Loans, Equipment Purchase Term Loans and Supplemental
Term Loans.”
(xii) Specified
Subsidiaries . The definition of “Specified
Subsidiaries” in the Loan Agreement is hereby amended by
deleting such definition in its entirety and replacing it with the
following:
“ ‘Specified Subsidiaries’
shall mean, collectively, (a) Maryland Wire, (b) H&H Tube,
(c) H&H Electronic, (d) Hardy & Harman Ele (Asia) SdN Bhd.,
a Malaysian corporation, (e) Indiana Tube Denmark (effective as of
December 31, 2008), (f) Sumco (effective upon the consummation of
either (x) the sale of all of the Capital Stock of Sumco as
permitted by Section 9.7(b)(viii) hereof or (y) the sale or
other disposition of all or substantially all of the assets and
properties of Sumco as permitted by Section 9.7(b)(viii)
hereof (other than the Real Property and related Equipment of Sumco
located in Indianapolis, Indiana) and either the cessation of
operations of Sumco or the winding up, liquidation or dissolution
of Sumco as permitted by Section 9.7(c) hereof), and (g) the
Exempt Subsidiary (effective upon the consummation of either (x)
the sale of all of the Capital Stock of the Exempt Subsidiary as
permitted by Section 9.7(b)(ix) hereof or (y) the sale or
other disposition of all or substantially all of the assets and
properties of the Exempt Subsidiary as permitted by
Section 9.7(b)(ix) hereof and the cessation of operations of
the Exempt Subsidiary).”
(xiii) 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 the
term loan made by or on behalf of Term B Loan Lenders to
Borrowers as provided for in Section 2.3C
hereof.”
(c) Interpretation
. Capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed thereto
in the Loan Agreement.
2.
Letters of Credit .
(a) Section 2.2(b) of the Loan
Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(b) In addition to any
charges, fees or expenses charged by any bank or issuer in
connection with the Letter of Credit Accommodations, Borrowers
shall pay to Agent, for the benefit of Revolving Loan Lenders, a
letter of credit fee at a rate equal to two (2%) percent per annum
on the daily outstanding balance of the Letter of Credit
Accommodations for the immediately preceding month (or part
thereof), payable in arrears as of the first day of each succeeding
month, except that Agent may, and upon the written direction of
Required Lenders shall, require Borrowers to pay to Agent for the
benefit of Revolving Loan Lenders such letter of credit fee, at a
rate equal four (4%) percent per annum on such daily outstanding
balance for: (i) the period from and after the date of termination
hereof until Agent and Revolving Loan Lenders have received full
and final payment of all Obligations (notwithstanding entry of a
judgment against any Borrower) and (ii) the period from and after
the date of the occurrence of an Event of Default for so long as
such Event of Default is continuing as determined by Agent. Such
letter of credit fee shall be calculated on the basis of a three
hundred sixty (360) day year and actual days elapsed and the
obligation of Borrowers to pay such fee shall survive the
termination of this Agreement.”
(b) Section 2.2(e) of the Loan
Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(e) Except in Agent's
discretion, with the consent of all Lenders, the amount of all
outstanding Letter of Credit Accommodations and all other
commitments and obligations made or incurred by Agent or any Lender
in connection therewith shall not at any time exceed
$15,000,000.”
3. Term
Loans, Equipment Purchase Term Loans and Supplemental Loans
. Subject to the absence of any Events of Default and
subject to such terms and conditions to be agreed upon among Agent,
Revolving Loan Lenders and Administrative Borrower pursuant to an
amendment to the Loan Agreement and amendments to existing
Financing Agreements or new Financing Agreements (if any) to be
entered into in accordance with the terms hereof, Revolving Loan
Lenders severally (and not jointly) will agree to increase the
outstanding principal amount of the Term Loans to an amount not to
exceed the lesser of (a) $15,000,000 and (b) the sum of
(i) eighty-five (85%) percent of the net orderly liquidation
value of certain Equipment of Borrowers and Guarantors to be agreed
upon among Revolving Loan Lenders and Administrative Borrower, as
such value is set forth in the appraisals described in the proviso
below, and (ii) sixty (60%) percent of the fair market value of
certain Real Property of Borrowers and Guarantors to be agreed upon
among Revolving Loan Lenders and Administrative Borrower, as such
value is set forth in the appraisals described in the proviso
below; provided , that , (x) the agreement of
Revolving Loan Lenders to increase the principal amount of the Term
Loans in accordance with this Section shall be conditioned upon,
among other things, the receipt by Agent of written appraisals as
to such Equipment and Real Property, in form, scope and methodology
acceptable to Agent and by appraisers acceptable to Agent,
addressed to Agent and upon which Agent is expressly permitted to
rely, and (y) Borrowers shall not be required to pay to Lenders an
additional amendment fee in connection with such increase in the
principal amount of the Term Loans.
4. Term B
Loan .
(a) Section 2.3C(a) of the Loan
Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(a) Making of the Term B
Loan . (i) Borrowers and Guarantors hereby
acknowledge, confirm and agree that (A) Term B Loan Lenders made a
term loan to Borrowers on the Amendment No. 12 Effective Date in
the original principal amount of $42,000,000 and certain Term B
Loan Lenders made an additional term loan to Borrowers on the
Amendment No. 18 Effective Date in the original principal amount of
$4,000,000 (collectively, the “Term B Loan”), and (B)
as of the Amendment No. 22 Effective Date and immediately prior to
giving effect thereto, Borrowers are indebted to Term B Loan
Lenders for the Obligations in respect of the Term B Loan in the
principal amount of $42,333,333 (the “Amendment No. 22 Term B
Loan Balance”), plus accrued interest and fees
thereon. (ii) On the Amendment No. 22
Effective Date, subject to and upon the terms and conditions
contained herein and in Amendment No. 22, Borrowers shall prepay
the Amendment No. 22 Term B Loan Balance in the amount of
$2,333,333 with proceeds of Revolving Loans, so that after giving
effect thereto, the outstanding principal amount of the Term B Loan
shall equal the amount of
$40,000,000. (iii) Within one (1) Business
Day following the effective date of any increase in the outstanding
principal amount of the Term Loans pursuant to an amendment to this
Agreement (if any) to be entered into in accordance with the terms
hereof, subject to the terms and conditions of such amendment,
Borrowers shall prepay the Term B Loan in an amount equal to the
lesser of (A) $5,000,000 and (B) the amount equal to the difference
between (x) the aggregate principal amount of the Term Loans
immediately after giving effect to such increase and (y) the
aggregate outstanding principal amount of the Term Loans, Equipment
Purchase Term Loans and Supplemental Term Loans immediately prior
to giving effect to such increase.”
(b) Section 2.3C(c) of the Loan
Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
“(c) Repayment of Term B
Loan . The principal amount of the Term B Loan shall
be repaid in full on the Termination Date (or if earlier, upon an
Event of Default as provided in Section 10.2
hereof). Borrowers may make a voluntary prepayment,
without premium or penalty, in whole or in part of the outstanding
principal amount of the Term B Loan so long as each of the
following conditions is satisfied: (i) as of the date of any
such prepayment and after giving effect thereto, no Default or
Event of Default shall exist or have occurred and be continuing,
(ii) for each of the thirty (30) consecutive days prior to any
such prepayment, Excess Availability shall have been not less than
$15,000,000 and immediately after giving effect to any such
prepayment, Excess Availability shall be not less than $15,000,000,
and (iii) Borrowers shall provide Agent with at least one (1)
but no more than five (5) Business Days’ prior written notice
of such voluntary prepayment. Any principal amount of
the Term B Loan which is repaid or prepaid may not be
reborrowed.”
(c) Section 2.3C(d) of the Loan
Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:
(i) Borrower agrees to pay Agent, for
the benefit of the Term B Loan Lender, the fees and other amounts
set forth in the Term B Loan Fee Letter in the amounts and at the
time specified therein.
(ii) In the event that any of the
Term B Loan is prepaid prior to the eighteen (18) month
anniversary of the Amendment No. 22 Effective Date, except as
otherwise provided below, Borrowers, jointly and severally, shall
pay to Agent, for the account of Term B Loan Lenders (to the extent
and in accordance with the arrangements between Term B Loan
Lenders), a non-refundable prepayment fee (“Prepayment
Fee”) in an amount equal to (A) three (3%) percent
of the amount of the prepayment, if such prepayment is made prior
to the twelve (12) month anniversary of the Amendment No. 22
Effective Date, and (B) one (1%) percent of the amount of the
prepayment, if such prepayment is made after the twelve (12) month
anniversary of the Amendment No. 22 Effective Date but on or before
the eighteen (18) month anniversary of the Amendment No. 22
Effective Date. Each such Prepayment Fee shall be due
and payable on the date of each such
prepayment. Notwithstanding the foregoing, no Prepayment
Fee shall be payable pursuant to this Section in connection with
(A) the prepayments required to be made under Section 2.3C(a) or
2.4(c) hereof, and (B) any prepayment (in an amount up to
$5,000,000) required to be made in connection with an increase in
the outstanding principal amount of the Term
Loans.”
5.
Mandatory Prepayments . Section 2.4(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, the
sale by Canfield, Lucas, H&H Tube or H&H Canada of the
fee-owned Real Properties of such Borrowers and Guarantors located
in Canfield, Ohio, Cudahy, Wisconsin, Norristown, Pennsylvania and
Rexdale, Ontario, respectively, as permitted in Section 9.7(b)(vii)
hereof, the sale of all or substantially all of the Capital Stock
or the assets and properties of Canfield as permitted in Section
9.7(b)(viii) hereof, or the sale or disposition of any Collateral
by 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 Obligations 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
includes Inventory or Accounts, then the portion of the Net Cash
Proceeds attributable to such Inventory or Accounts shall be
applied, first , to the outstanding principal amount of the
Revolving Loans, second , to the outstanding principal
amount of the Term Loans, third , to the outstanding
principal amount of the Equipment Purchase Term Loans,
fourth , to the outstanding principal amount of the
Supplemental Term Loans, and fifth , to the outstanding
principal amount of the Term B Loan; and
(B) if such sale or disposition
includes any Collateral (other than Inventory or Accounts), then
the portion of the Net Cash Proceeds attributable to such other
Collateral shall be applied, first , to the outstanding
principal amount of the Term Loans, second , to the
outstanding principal amount of the Equipment Purchase Term Loans,
third , to the outstanding principal amount of the
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
Revolving Loans so long as (in the case of this clause (y) only)
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 Revolving Loans.
(ii) Upon the sale or disposition of the Capital
Stock, assets or properties of Indiana Tube Denmark as permitted in
Section 9.7(b)(v) hereof, the sale or disposition of the Real
Property of Sumco located in Indianapolis, Indiana as permitted in
Section 9.7(b)(vii) hereof, the sale or disposition of the Capital
Stock, assets or properties of Sumco as permitted in Section
9.7(b)(viii) hereof, or the sale or disposition of the Capital
Stock, assets or properties of the Exempt Subsidiary as permitted
in Section 9.7(b)(ix) hereof, Borrowers shall immediately prepay
the Obligations as set forth below, in an amoun
