Exhibit 4.16
AMENDMENT NO. 3 AND WAIVER TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 3 AND WAIVER TO LOAN AND SECURITY AGREEMENT (this
"Amendment
No. 3"), dated as of December 29, 2005, by and among Handy &
Harman, a New York
corporation ("Parent"), OMG, Inc., a Delaware corporation, ("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" and together with
Parent, OMG,
Continental, Maryland Wire, H&H Tube, Camdel, Canfield,
Micro-Tube, Indiana
Tube, Lucas and H&H Electronic, 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") and Willing B Wire Corporation, a Delaware
corporation
("Willing" and together with each of 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"), Steel Partners II, L.P., 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 may make loans and advances and provide other
financial
accommodations to Borrowers as set forth in the Loan and Security
Agreement,
dated as of March 31, 2004, by and among Agent, successor by
assignment to Steel
Partners II, L.P., 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, and
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, upon the effective date of this Amendment No. 3 and Waiver
to Loan
and Security Agreement, Lender shall extend an additional
$10,000,000 to
Borrowers and Guarantors;
WHEREAS, Borrowers and Guarantors have requested that Agent and
Lenders
agree to (a) waive certain defaults under the Loan Agreement and
(b) make
certain related amendments to the Loan Agreement, and Agent and
Lenders are
willing to agree to such amendments and to grant such waivers,
subject to the
terms and conditions contained herein; and
WHEREAS, by this Amendment No. 3, Borrowers, Guarantors, Agent and
Lenders
desire and intend to evidence such consents and amendments;
NOW THEREFORE, in consideration of the foregoing, and the
respective
agreements and covenants contained herein, the parties hereto agree
as follows:
1.
AMENDMENT TO DEFINITION. The definition of "Maximum Credit" in
Section
1.73 of the Loan Agreement is hereby amended by deleting
$71,000,000 and
replacing it with $81,000,000. In addition, all other references in
the Loan and
Security Agreement to $71,000,000 shall be changed to $81,000,000.
2.
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:
(a)
"Amendment No. 3" shall mean Amendment No. 3 and Waiver to Loan
and Security Agreement 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.
(b)
"Amendment No. 3 Effective Date" shall mean the first date on
which all of the conditions precedent to the effectiveness of
Amendment No. 3
shall have been satisfied or waived.
3.
EXTENSION OF CREDIT. Upon the effective date of this Amendment No.
3,
Lender shall extend an additional $10,000,000 to Borrowers and
Guarantors.
4.
AMENDMENTS.
(a)
Section 9.17(a) of the Loan Agreement is hereby amended by
deleting such Section and replacing it with the following:
"(a) EBITDA. Parent and its Subsidiaries shall not
permit EBITDA of Parent and its Subsidiaries, on a
consolidated basis, for each period set forth below to
be less than the amount set forth below opposite such
period:
2
Period
Minimum EBITDA
------
--------------
12 months ending
December 31, 2005
$22,500,000
3 months ending March 31,
2006
$5,000,000
6 months ending June 30,
2006
$13,000,000
9 months ending
September 30, 2006
$20,000,000
12 months ending
December 31, 2006 and on
the last day of each fiscal
quarter thereafter
$27,000,000"
(b)
Section 9.17(b) of the Loan Agreement is hereby amended by
deleting such Section and replacing it with the following:
"(b) FIXED CHARGE COVERAGE RATIO. Parent and its
Subsidiaries shall not permit the Fixed Charge Coverage
Ratio for each period set forth below to be less than
the ratio set forth below opposite such period:
Minimum Fixed
Period
Charge Coverage Ratio
------
---------------------
3 months ending March 31,
2006
0.75 to 1
6 months ending June 30,
2006
1 to 1
9 months ending
September 30, 2006
1 to 1
12 months ending
December 31, 2006 and on
the last day of each fiscal
quarter thereafter
1 to 1"
(c)
Section 9.17(c) of the Loan Agreement is hereby amended by
deleting such Section and replacing it with the following:
3
"(c) MAXIMUM CAPITAL EXPENDITURES. Parent and it
Subsidiaries shall not, directly or indirectly, make or
commit to make (whether through purchase, capital lease
or otherwise) Capital Expenditures for each period set
forth below in an amount in excess of the amount set
forth below opposite such period:
Maximum
Period
Capital Expenditures
------
--------------------
3 months ending March 31,
2006
$3,000,000
6 months ending June 30,
2006
$6,000,000
9 months ending
September 30, 2006
$9,000,000
12 months ending
December 31, 2006 and on
the last day of each fiscal
quarter thereafter
$12,000,000"
(d)
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)
[Intentionally Deleted]".
5.
WAIVER OF EVENTS OF DEFAULT.
(a)
Subject to the terms and conditions contained herein, Agent and
Required Lenders hereby waive the following Events of Default
arising under
Section 10.1(a)(iii) of the Loan Agreement (collectively, the
"Existing
Defaults"):
(i)
the Event of Default arising as a result of the failure of
Parent and its Subsidiaries to maintain mini
