<PAGE>   1

                                                                [EXECUTION COPY]

                                SECOND AMENDMENT
                                       TO
                      SHORT TERM REVOLVING CREDIT AGREEMENT

      This SECOND AMENDMENT TO SHORT TERM REVOLVING CREDIT AGREEMENT, dated as
of September 24, 1996 (this "Amendatory Agreement"), is among HANDY & HARMAN, a
New York corporation (the "Borrower"), certain financial institutions
signatories hereto (the "Lenders"), THE BANK OF NOVA SCOTIA, THE CHASE MANHATTAN
BANK (formerly known as Chemical Bank) and THE BANK OF NEW YORK, as the
co-agents (collectively referred to herein as the "Co-Agents"), and THE BANK OF
NOVA SCOTIA, as administrative agent (the "Administrative Agent").

                             W I T N E S S E T H:

      WHEREAS, the Borrower, the Lenders, the Co-Agents and the Administrative
Agent are parties to a Short Term Revolving Credit Agreement, dated as of
September 28, 1994 (as amended or otherwise modified to the date hereof, the
"Existing Credit Agreement"); and

      WHEREAS, the parties hereto have agreed, subject to the conditions and
terms hereinafter set forth, to amend the Existing Credit Agreement in certain
respects as herein provided (the Existing Credit Agreement, as so amended by
this Amendatory Agreement, being referred to as the "Credit Agreement");

      NOW, THEREFORE, in consideration of the agreements herein contained, the
parties hereto agree as follows:

                                     PART I

                                   DEFINITIONS

      SUBPART 1.1. Certain Definitions. The following terms (whether or not
underscored) when used in this Amendatory Agreement shall have the following
meanings (such meanings to be equally applicable to the singular and plural form
thereof):

      "Administrative Agent" is defined in the preamble.

      "Amendatory Agreement" is defined in the preamble.

      "Borrower" is defined in the preamble.

      "Co-Agents" is defined in the preamble.

      "Credit Agreement" is defined in the second recital.
<PAGE>   2

      "Existing Credit Agreement" is defined in the first recital.

      "Lenders" is defined in the preamble.

      "Second Amendment Effective Date" is defined in Subpart 4.1.

      SUBPART 1.2. Other Definitions. Terms for which meanings are provided in
the Existing Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used in this Amendatory Agreement with such
meanings.

                                     PART II

                                AMENDMENTS TO THE
                            EXISTING CREDIT AGREEMENT
                      AND EXTENSION OF STATED MATURITY DATE

      Effective on (and subject to the occurrence of) the Second Amendment
Effective Date, the Existing Credit Agreement is hereby amended and the Stated
Maturity Date is hereby extended in accordance with this Part II; except as so
amended, the Existing Credit Agreement shall continue in full force and effect.

      SUBPART 2.1. Amendments to Article I. Article I of the Existing Credit
Agreement is hereby amended in accordance with Subparts 2.1.1 through 2.1.2.

      SUBPART 2.1.1. Section 1.1 of the Existing Credit Agreement is hereby
amended by inserting the following definitions in such Section in the
appropriate alphabetical sequence:

            "Applicable Commitment Fee Margin" means the lowest per annum rate
      determined by reference to the Net Debt to EBITDA Ratio and EBITDA to
      Interest Ratio, in each case that is satisfied for each of such ratios in
      a given clause below and as indicated in the Compliance Certificate most
      recently delivered pursuant to clause (c) of Section 7.1.1, equal to:

                  (a) 0.11% if the Net Debt to EBITDA Ratio is less than or
            equal to 1.75:1 and the EBITDA to Interest Ratio is greater than or
            equal to 5.0:1;

                  (b) 0.15% if the Net Debt to EBITDA Ratio is less than or
            equal to 2.25:1 and the EBITDA to Interest Ratio is greater than or
            equal to 3.75:1;

                  (c) 0.1875% if the Net Debt to EBITDA Ratio is less than or
            equal to 2.75:1 and the EBITDA to Interest Ratio is greater than or
            equal to 3.00:1; and


                                       -2-
<PAGE>   3

                  (d) 0.225% if the Net Debt to EBITDA Ratio is greater than
            2.75:1 or the EBITDA to Interest Ratio is less than 3.00:1.

            The Net Debt to EBITDA Ratio and the EBITDA to Interest Ratio used
      to compute the Applicable Commitment Fee Margin shall be the Net Debt to
      EBITDA Ratio and the EBITDA to Interest Ratio, as the case may be, set
      forth in the Compliance Certificate most recently delivered by the
      Borrower to the Administrative Agent pursuant to clause (c) of Section
      7.1.1; changes in the Applicable Commitment Fee Margin resulting from a
      change in the Net Debt to EBITDA Ratio and/or the EBITDA to Interest
      Ratio, as the case may be, shall become effective upon delivery by the
      Borrower to the Administrative Agent of a new Compliance Certificate
      pursuant to clause (c) of Section 7.1.1. Notwithstanding the foregoing,
      the Lenders acknowledge and agree that, subject to the next sentence, the
      Applicable Commitment Fee Margin for the period from the Second Amendment
      Effective Date through (but excluding) the date that the first Compliance
      Certificate is delivered following the Second Amendment Effective Date
      shall be determined by reference to level (c) above (notwithstanding the
      actual Net Debt to EBITDA Ratio and EBITDA to Interest Ratio for such
      period). If the Borrower shall fail to deliver a Compliance Certificate
      within the number of days after the end of any Fiscal Quarter as required
      pursuant to clause (c) of Section 7.1.1 (without giving effect to any
      grace period), the Applicable Commitment Fee Margin from and including the
      first day after the date on which such Compliance Certificate was required
      to be delivered to but not including the date the Borrower delivers to the
      Administrative Agent a Compliance Certificate shall conclusively equal the
      highest Applicable Commitment Fee Margin set forth above.

            "Applicable LIBO Rate Margin" means, with respect to any Loan made
      or maintained as a LIBO Rate Loan, the lowest per annum rate determined by
      reference to the Net Debt to EBITDA Ratio and EBITDA to Interest Ratio, in
      each case that is satisfied for each of such ratios in a given clause
      below and as indicated in the Compliance Certificate most recently
      delivered pursuant to clause (c) of Section 7.1.1, equal to:

                  (a) 0.45% if the Net Debt to EBITDA Ratio is less than or
            equal to 1.75:1 and the EBITDA to Interest Ratio is greater than or
            equal to 5.0:1;

                  (b) 0.60% if the Net Debt to EBITDA Ratio is less than or
            equal to 2.25:1 and the EBITDA to Interest Ratio is greater than or
            equal to 3.75:1;


                                       -3-
<PAGE>   4

                  (c) 0.75% if the Net Debt to EBITDA Ratio is less than or
            equal to 2.75:1 and the EBITDA to Interest Ratio is greater than or
            equal to 3.00:1; and

                  (d) 1.00% if the Net Debt to EBITDA Ratio is greater than
            2.75:1 or the EBITDA to Interest Ratio is less than 3.00:1.

            The Net Debt to EBITDA Ratio and the EBITDA to Interest Ratio used
      to compute the Applicable LIBO Rate Margin shall be the Net Debt to EBITDA
      Ratio and the EBITDA to Interest Ratio, as the case may be, set forth in
      the Compliance Certificate most recently delivered by the Borrower to the
      Administrative Agent pursuant to clause (c) of Section 7.1.1; changes in
      the Applicable LIBO Rate Margin resulting from a change in the Net Debt to
      EBITDA Ratio and/or the EBITDA to Interest Ratio, as the case may be,
      shall become effective upon delivery by the Borrower to the Administrative
      Agent of a new Compliance Certificate pursuant to clause (c) of Section
      7.1.1. Notwithstanding the foregoing, the Lenders acknowledge and agree
      that, subject to the next sentence, the Applicable LIBO Rate Margin for
      the period from the Second Amendment Effective Date through (but
      excluding) the date that the first Compliance Certificate is delivered
      following the Second Amendment Effective Date shall be determined by
      reference to level (c) above (notwithstanding the actual Net Debt to
      EBITDA Ratio and EBITDA to Interest Ratio for such period). If the
      Borrower shall fail to deliver a Compliance Certificate within the number
      of days after the end of any Fiscal Quarter as required pursuant to clause
      (c) of Section 7.1.1 (without giving effect to any grace period), the
      Applicable LIBO Rate Margin from and including the first day after the
      date on which such Compliance Certificate was required to be delivered to
      but not including the date the Borrower delivers to the Administrative
      Agent a Compliance Certificate shall conclusively equal the highest
      Applicable LIBO Rate Margin set forth above.

            "EBITDA" means, for any period, the sum for such period of all
      amounts which, in accordance with GAAP, would be included on the
      consolidated financial statements of the Borrower and its Subsidiaries as

                  (a) EBIT;

      plus

                  (b) the amount deducted, in determining Net Income,
            representing amortization;


                                       -4-
<PAGE>   5

      plus

                  (c) the amount deducted, in determining Net Income,
            representing depreciation of assets.

            "EBITDA to Interest Ratio" means, at the close of any Fiscal
      Quarter, the ratio, computed for the period consisting of such Fiscal
      Quarter and each of the three immediately preceding Fiscal Quarters, of

            (a) EBITDA

to

            (b) Interest Expense.


            "Net Debt to EBITDA Ratio" means, at the last day of any Fiscal
      Quarter, the ratio, computed (in the case of clause (b) below) for the
      period consisting of such Fiscal Quarter and each of the three immediately
      preceding Fiscal Quarters, of

                  (a) Debt minus the aggregate amount of cash and Cash
            Equivalent Investments (not subject to any Lien or other
            encumbrance) owned by the Borrower and its Subsidiaries on such last
            day

      to

                  (b) EBITDA.

            "Second Amendment" means the Second Amendment, dated as of September
      24, 1996, to this Agreement among the Borrower, the Lenders party thereto,
      the Co-Agents and the Administrative Agent.

            "Second Amendment Effective Date" means the Second Amendment
      Effective Date as defined in Subpart 4.1 of the Second Amendment.

      SUBPART 2.1.2. Section 1.1 of the Existing Credit Agreement is further
amended by amending the definition of "Loan Commitment Amount" appearing in such
Section in its entirety to read as follows:

            "`Loan Commitment Amount' means, on any day, $50,000,000, as such
      amount may be reduced from time to time pursuant to Section 2.2."


                                       -5-
<PAGE>   6

      SUBPART 2.2. Amendments to Article III. Article III of the Existing Credit
Agreement is hereby amended in accordance with Subparts 2.2.1 and 2.2.2.

      SUBPART 2.2.1. Clause (ii) of Section 3.2.1 of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:

            "(ii) On that portion of such Borrowing maintained as LIBO Rate
      Loans, during each Interest Period applicable thereto, such rate shall be
      equal to the sum of the LIBO Rate (Reserve Adjusted) for such Interest
      Period plus the Applicable LIBO Rate Margin; and"

      SUBPART 2.2.2. Section 3.3.1 of the Existing Credit Agreement is hereby
amended by deleting the words "at the rate of 1/4 of 1% per annum" and inserting
the words "equal to the Applicable Commitment Fee Margin" in place thereof.

      SUBPART 2.3. Amendments to Exhibits. Exhibit A-1 (Form of Revolving Note),
Exhibit A-2 (Form of Competitive Bid Loan Note) and Exhibit E (Compliance
Certificate) to the Existing Credit Agreement are hereby amended in their
entirety to read as respectively set forth on Exhibits A, B and C hereto.

      SUBPART 2.4. Extension of Stated Maturity Date. By their signatures below,
the parties hereto hereby agree that, in accordance with the terms of Section
2.4 of the Existing Credit Agreement, effective on the Stated Maturity Date
under the Existing Credit Agreement, the Stated Maturity Date shall be extended
to September 24, 1997.

                                    PART III

                                 ACKNOWLEDGEMENT

      SUBPART 3.1. Acknowledgement. By their signature below, each of the
Lenders acknowledges and agrees that as of the Second Amendment Effective Date
(and notwithstanding any reductions to the Loan Commitment Amount that have
occurred prior to the Second Amendment Effective Date) the Loan Commitment
Amount is $50,000,000, as such amount may be reduced from time to time after the
Second Amendment Effective Date pursuant to Section 2.2 of the Credit Agreement.

                                     PART IV


                                       -6-
<PAGE>   7

                           CONDITIONS TO EFFECTIVENESS

      SUBPART 4.1. Second Amendment Effective Date. This Amendatory Agreement
shall become effective on the date first set forth above (the "Second Amendment
Effective Date") when each of the conditions set forth in this Subpart 4.1 shall
have been satisfied.

      SUBPART 4.1.1. Execution of Counterparts. The Administrative Agent shall
have received counterparts of this Amendatory Agreement, duly executed on behalf
of the Borrower and each of the Lenders.

      SUBPART 4.1.2. Resolutions, etc. The Administrative Agent shall have
received from the Borrower, with copies for each Lender, a certificate, dated
the Second Amendment Effective Date, of its Secretary or Assistant Secretary as
to

            (a) resolutions of its Board of Directors, then in full force and
      effect, authorizing the execution, delivery and performance of this
      Amendatory Agreement and each other Loan Document to be executed by it in
      connection with this Amendatory Agreement; and

            (b) the incumbency and signatures of its officers authorized to
      execute and deliver, and act with respect to, this Amendatory Agreement,
      each other Loan Document and each of the other documents, certificates,
      instruments and other agreements delivered or to be delivered by it
      pursuant to this Amendatory Agreement and pursuant to the Credit
      Agreement.

Each of the Lenders and the Agents may conclusively rely upon such certificate
until the Administrative Agent has received a further certificate of the
Secretary or an Assistant Secretary of the Borrower cancelling or amending such
prior certificate.

      SUBPART 4.1.3. Fees and Expenses. The Administrative Agent shall have
received payment in full of all fees, costs and expenses due and payable as of
the Second Amendment Effective Date.

      SECTION 4.1.4. Opinions of Counsel. The Administrative Agent shall have
received opinions, dated the Second Amendment Effective Date and addressed to
the Agents and all Lenders, from counsel to the Borrower, in form and substance
satisfactory to the Administrative Agent.

      SUBPART 4.1.5. Delivery of Notes. The Administrative Agent shall have
received, for the account of each Lender, Notes, issued in substitution and
exchange for, and not in satisfaction


                                       -7-
<PAGE>   8

of, the Notes delivered under the terms of the Existing Credit Agreement, duly
executed and delivered by the Borrower.

      SUBPART 4.1.6. Legal Details, etc. All documents executed or submitted
pursuant hereto shall be satisfactory in form and substance to the
Administrative Agent and its counsel. The Administrative Agent and its counsel
shall have received all information and such counterpart originals or such
certified or other copies or such materials, as the Administrative Agent or its
counsel may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendatory Agreement shall be satisfactory to
the Administrative Agent and its counsel.

                                    PART V

                                 MISCELLANEOUS

      SUBPART 5.1. Cross-References. References in this Amendatory Agreement to
any Part or Subpart are, unless otherwise specified or otherwise required by the
context, to such Part or Subpart of this Amendatory Agreement.

      SUBPART 5.2. Loan Document Pursuant to Existing Credit Agreement. This
Amendatory Agreement is a Loan Document executed pursuant to the Existing Credit
Agreement and shall be construed, administered and applied in accordance with
all of the terms and provisions of the Existing Credit Agreement.

      SUBPART 5.3. Successors and Assigns. This Amendatory Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

      SUBPART 5.4. Counterparts. This Amendatory Agreement may be executed by
the parties hereto in several counterparts, each of which when executed and
delivered shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.

      SUBPART 5.5. Representations, No Default, etc. As of the date of
effectiveness of this Amendatory Agreement, the Borrower hereby represents and
warrants to the Agents and the Lenders that

            (a) the representations and warranties set forth in Article VI of
      the Existing Credit Agreement (excluding, however, those contained in
      Section 6.7 thereof) are true and correct in all material respects (unless
      stated to relate solely to an earlier date, in which case such
      representations and warranties were true and correct as of such earlier
      date);


                                       -8-
<PAGE>   9

            (b) except as disclosed by the Borrower to the Administrative Agent
      and the Lenders pursuant to Section 6.7 of the Existing Credit Agreement,

                  (i) no litigation, arbitration or governmental investigation
            or proceeding is pending or, to the knowledge of the Borrower,
            threatened against the Borrower or any of its Subsidiaries which may
            reasonably be expected to materially adversely affect the
            Borrower's, or the Borrower and its Subsidiaries' taken as a whole,
            financial condition, operations, assets, businesses, properties or
            prospects or which purports to affect the legality, validity or
            enforceability of the Existing Credit Agreement, the Notes or any
            other Loan Document; and

                  (ii) no development has occurred in any litigation,
            arbitration or governmental investigation or proceeding disclosed
            pursuant to Section 6.7 of the Existing Credit Agreement which may
            reasonably be expected to materially adversely affect the financial
            condition, operations, assets, businesses, properties or prospects
            of the Borrower or the Borrower and its Subsidiaries, taken as a
            whole; and

            (c) no Default has occurred and is continuing.

      SUBPART 5.6. Limited Waiver, etc. No amendment, waiver or approval by the
Agents or any Lender under this Amendatory Agreement shall, except as may be
otherwise stated in this Amendatory Agreement, be applicable to subsequent
transactions. No amendment, waiver or approval hereunder shall require any
similar or dissimilar amendment, waiver or approval to be granted after the date
hereof, and except as expressly modified by this Amendatory Agreement, the
provisions of the Existing Credit Agreement shall remain in full force and
effect, without amendment or other modification.

      SUBPART 5.7. Governing Law. THIS AMENDATORY AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.


                                       -9-
<PAGE>   10

      IN WITNESS WHEREOF, the parties hereto have caused this Amendatory
Agreement to be executed by their respective authorized officers as of the day
and year first above written.


                                    HANDY & HARMAN


                                    By __________________________________
                                       Title:


                                    THE BANK OF NOVA SCOTIA,
                                       in its capacity as Administrative
                                       Agent, Co-Agent and Lender


                                    By __________________________________
                                       Title:
<PAGE>   11

                                    THE BANK OF NEW YORK,
                                       in its capacity as
                                         Co-Agent and Lender


                                    By __________________________________
                                       Title:
<PAGE>   12

                                    THE CHASE MANHATTAN BANK (formerly known
                                       as Chemical Bank), in its capacity as
                                       Co-Agent and Lender


                                    By __________________________________
                                       Title:
<PAGE>   13

                                 FLEET PRECIOUS METALS INC.


                                    By __________________________________
                                       Title:
<PAGE>   14

                                    THE FIRST NATIONAL BANK OF CHICAGO
                                     (formerly known as NBD Bank)


                                    By __________________________________
                                       Title:
<PAGE>   15

                                    BANK OF TOKYO - MITSUBISHI TRUST COMPANY


                                    By __________________________________
                                       Title:
<PAGE>   16

                                    LTCB TRUST COMPANY


                                    By __________________________________
                                       Title:
<PAGE>   17

                                    CREDIT LYONNAIS NEW YORK BRANCH


                                    By __________________________________
                                       Title:


                                    CREDIT LYONNAIS CAYMAN ISLAND BRANCH


                                    By __________________________________
                                       Title:
<PAGE>   18

                                  THE SUMITOMO BANK, LIMITED


                                    By __________________________________
                                       Title:


                                    By __________________________________
                                       Title:
<PAGE>   19

                                    DEUTSCHE BANK AG, NEW YORK AND/OR
                                      CAYMAN ISLANDS BRANCHES


                                    By __________________________________
                                       Title:


                                    By __________________________________
                                       Title:
<PAGE>   20

                                    THE FUJI BANK, LIMITED,
                                      NEW YORK BRANCH


                                    By __________________________________
                                       Title:
<PAGE>   21

                                    ABN AMRO BANK N.V. NEW YORK BRANCH


                                    By __________________________________
                                       Title:


                                    By __________________________________
                                       Title:
<PAGE>   22

                                    BANQUE PARIBAS


                                    By __________________________________
                                       Title:


                                    By __________________________________
                                       Title:
<PAGE>   23

                                    GIROCREDIT BANK AG DER SPARKESSEN
                                       GRAND CAYMAN ISLAND BRANCH


                                    By __________________________________
                                       Title:


                                    By __________________________________
                                       Title:
<PAGE>   24

                                    COMERICA BANK


                                    By __________________________________
                                       Title:
<PAGE>   25

                                    IBJ SCHRODER BANK & TRUST COMPANY


                                    By __________________________________
                                       Title:
<PAGE>   26

                                    YASUDA TRUST & BANKING CO., LTD.
                                       NEW YORK BRANCH


                                    By __________________________________
                                       Title:
<PAGE>   27

                                                                       EXHIBIT A
                                                             TO SECOND AMENDMENT

                                                                     EXHIBIT A-1

                               Revolving Loan Note

$______________                                               September 28, 1994

      FOR VALUE RECEIVED, the undersigned, HANDY & HARMAN, a New York
corporation (the "Borrower"), promises to pay to the order of
_________________________ (the "Lender") on the Stated Maturity Date (as such
term is defined in the Credit Agreement referred to below), the principal sum of
_______________ DOLLARS ($___________) or, if less, the aggregate unpaid
principal amount of all Revolving Loans (as such term is defined in the Short
Term Revolving Credit Agreement, dated as of the date hereof (as such Short Term
Revolving Credit Agreement may be amended, supplemented, amended and restated or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, The Bank of Nova Scotia, The Chase Manhattan Bank (formerly known as
Chemical Bank) and The Bank of New York, as Co-Agents, The Bank of Nova Scotia,
as Administrative Agent and certain financial institutions (including the
Lender) as are, or may become, parties thereto), made by the Lender pursuant to
the Credit Agreement. A notation indicating all Revolving Loans made by the
Lender pursuant to the Credit Agreement and payments on account of principal of
such Revolving Loans may, from time to time, be made by the holder hereof on the
grid attached to this Revolving Loan Note. Unless otherwise defined herein or
the context otherwise requires, terms used herein have the meanings provided in
the Credit Agreement.

      The unpaid principal amount of this Revolving Loan Note from time to time
outstanding shall bear interest as provided in Section 3.2.1 of the Credit
Agreement. All payments of principal of and interest on this Revolving Loan Note
shall be payable in lawful currency of the United States of America to the
account designated by the Administrative Agent in same day funds.

      This Revolving Loan Note represents a renewal of, and is issued in
substitution and exchange for, and not in satisfaction of, that certain
Revolving Loan Note of the Borrower, dated September 28, 1994, payable to the
order of the Lender (or its assignor). The Indebtedness originally evidenced by
such promissory note is a continuing Indebtedness, and nothing herein contained
shall be construed to deem such promissory note paid.
<PAGE>   28

      This Revolving Loan Note is one of the Revolving Loan Notes referred to
in, and evidences indebtedness incurred in respect of the Revolving Loans under,
the Credit Agreement, to which reference is made for a statement of the terms
and conditions on which the Borrower is permitted and required to make
prepayments of principal of the indebtedness evidenced by this Revolving Loan
Note and on which such indebtedness may be declared to be or may become
immediately due and payable.

      THIS REVOLVING LOAN NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK, AND
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK.

                                            HANDY & HARMAN


                                            By_________________________
                                              Title:


                                       -2-
<PAGE>   29

                                      GRID

<TABLE>
<CAPTION>
======================================================================================================================
                                                            Last Day of     Amount of     Outstanding
                              Alternate Base                 Applicable     Principal      Principal   Notation Made
     Date      Amount of Loan     Rate         LIBO Rate   Interest Period   Payment        Balance          By
----------------------------------------------------------------------------------------------------------------------
<S>            <C>            <C>              <C>         <C>              <C>           <C>          <C>


----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------


======================================================================================================================
</TABLE>


                                       -3-
<PAGE>   30

                                                                       EXHIBIT B
                                                             TO SECOND AMENDMENT

                                                                     EXHIBIT A-2

                            Competitive Bid Loan Note

$50,000,000                                                   September 28, 1994

      FOR VALUE RECEIVED, the undersigned, HANDY & HARMAN, a New York
corporation (the "Borrower"), promises to pay to the order of
_______________________ (the "Lender") on the earlier of (i) each Competitive
Bid Loan Maturity Date (as such term is defined in that certain Short Term
Revolving Credit Agreement, dated as of the date hereof (as such Short Term
Revolving Credit Agreement may be amended, supplemented, amended and restated or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, The Bank of Nova Scotia, The Chase Manhattan Bank (formerly known as
Chemical Bank) and The Bank of New York, as Co-Agents, The Bank of Nova Scotia,
as Administrative Agent and certain financial institutions (including the
Lender) as are, or may from time to time become parties thereto), and (ii) the
Loan Commitment Termination Date (as defined in the Credit Agreement), the
principal sum of FIFTY MILLION DOLLARS ($50,000,000) or, if less, the unpaid
principal amount of all Competitive Bid Loans made by the Lender to the Borrower
from time to time pursuant to Section 2.4. of the Credit Agreement. A notation
indicating all Competitive Bid Loans made by the Lender pursuant to the Credit
Agreement and all payments on account of principal of such Competitive Bid Loans
may, from time to time, be made by the holder hereof on the grid attached to
this Competitive Bid Loan Note.

      The unpaid principal amount of this Competitive Bid Loan Note from time to
time outstanding shall bear interest as provided in Section 3.2.1 of the Credit
Agreement. All payments of principal of and interest on this Competitive Bid
Loan Note shall be payable in lawful currency of the United States of America to
the account designated by the Administrative Agent in same day funds.

      This Competitive Bid Loan Note represents a renewal of, and is issued in
substitution and exchange for, and not in satisfaction of, that certain
Competitive Bid Loan Note of the Borrower, dated September 28, 1994, payable to
the order of the Lender (or its assignor). The indebtedness originally evidenced
by such promissory note is a continuing indebtedness, and nothing herein
contained shall be construed to deem such promissory note paid.
<PAGE>   31

      This Competitive Bid Loan Note is one of the Competitive Bid Loan Notes
referred to in, and evidences indebtedness incurred in respect of Competitive
Bid Loans under, the Credit Agreement, to which reference is made for a
statement of the terms and conditions on which the Borrower is permitted and
required to make prepayments of principal of the indebtedness evidenced by this
Competitive Bid Loan Note and on which such indebtedness may be or may become
declared to be immediately due and payable. Unless otherwise defined herein or
the context otherwise requires, terms used herein have the meanings provided in
the Credit Agreement.

      THIS COMPETITIVE BID LOAN NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK
AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK.

                                          HANDY & HARMAN


                                          By________________________
                                            Title:


                                      - 2 -
<PAGE>   32

                                      GRID

<TABLE>
<CAPTION>
====================================================================================================================================
                             Competitive Bid                                        Amount of
               Amount of      Loan Maturity                        Amount of        Principal     Outstanding
    Date          Loan            Date        Interest Period   Interest Payment     Payment    Principal Balance   Notation Made By
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>           <C>              <C>               <C>                 <C>         <C>

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

====================================================================================================================================
</TABLE>


                                       -3-
<PAGE>   33

                                                                       EXHIBIT C
                                                             TO SECOND AMENDMENT

                                                                       EXHIBIT E

                         Form of Compliance Certificate

To:   Each of the Lenders
        (as defined below)

            -and-

      The Bank of Nova Scotia,
        as Administrative Agent
      One Liberty Plaza
      New York, New York  10006

      Attention: ______________

                                 Handy & Harman

Gentlemen:

      This Compliance Certificate is being delivered pursuant to clause (c) of
Section 7.1.1 of the Short Term Revolving Credit Agreement, dated as of
September 28, 1994 (as amended, supplemented, amended and restated or otherwise
modified, the "Credit Agreement"), among Handy & Harman, a New York corporation
(the "Borrower"), certain financial institutions now or hereafter parties
thereto (the "Lenders"), The Bank of Nova Scotia, The Chase Manhattan Bank
(formerly known as Chemical Bank) and The Bank of New York, as Co-Agents for the
Lenders and The Bank of Nova Scotia, as Administrative Agent. Terms used herein
without definition shall have the meanings assigned to such terms in Section 1.1
of the Credit Agreement.

      The Borrower hereby certifies, represents and warrants that as of
_________ __, 19__ (the "Computation Date"):

      (a) The Adjusted Consolidated Tangible Net Worth was $__________, as
computed on Attachment 1 hereto and such amount [complies] [does not comply]
with the provisions of clause (a) of Section 7.2.4 of the Credit Agreement;

      (b) The Leverage Ratio was __:1.00, as computed on Attachment 2 hereto and
such ratio [complies] [does not comply] with the provisions of clause (b) of
Section 7.2.4 of the Credit Agreement;
<PAGE>   34

      (c) The Interest Coverage Ratio was __:1.00, as computed on Attachment 3
hereto and such ratio [complies] [does not comply] with the provisions of clause
(c) of Section 7.2.4 of the Credit Agreement;

      (d) The Net Debt to EBITDA Ratio was __:1.00 and the EBITDA to Interest
Ratio was __:1.00, as computed on Attachment 4 hereto;

      (e) The aggregate amount of Designated Debt of the Borrower and its
Subsidiaries was $_________ as computed on Attachment 5 hereto and such amount
[complies] [does not comply] with clause (a) of Section 7.2.2 of the Credit
Agreement;

      (f) The aggregate amount of Debt of all Subsidiaries was $_________, and
such amount [complies] [does not comply] with clause (b) of Section 7.2.2 of the
Credit Agreement;

      (g) The aggregate face amount of Indebtedness in respect of letters of
credit (other than Letters of Credit) was $________, and such amount [complies]
[does not comply] with clause (a)(ii)(B) of Section 7.2.2 of the Credit
Agreement;

      (h) The aggregate amount of Investments (other than the Investments
permitted by clauses (a) through (f) of Section 7.2.5 of the Credit Agreement)
made, incurred, assumed or otherwise existing by the Borrower and its
Subsidiaries was $_________ and such amount [complies] [does not comply] with
clause (g) of Section 7.2.5 of the Credit Agreement;

      (i) The aggregate amount of rental obligations entered into by the
Borrower and its Subsidiaries of the type set forth in Section 7.2.8 of the
Credit Agreement was $_________ and such amount [complies] [does not comply]
with Section 7.2.8 of the Credit Agreement;

      (j) The aggregate book value or market value, if higher (determined as to
particular assets as of the respective date of disposition thereof) (other than
in accordance with clauses (a), (b) and (c) of Section 7.2.11 of the Credit
Agreement) of all assets sold, transferred, leased, contributed or otherwise
conveyed by the Borrower and its Subsidiaries (i) since the Effective Date was
$__________ and such amount [complies] [does not comply] with clause (d)(i) of
Section 7.2.11 of the Credit Agreement, and (ii) constitutes assets which
contributed __% of operating profit contribution during the three most recently
completed Fiscal Years of the Borrower, and such amount [complies][does not
comply] with clause (d)(ii) of Section 7.2.11 of the Credit Agreement;


                                       -2-
<PAGE>   35

      (k) No Default has occurred and is continuing [other than as follows:];

      (l) The total market value of precious metal held on consignment by the
Borrower and its Subsidiaries was $_________;

      (m) The total number of ounces of precious metal held on consignment at
each Plant (as defined in the Consignment Facilities) under the terms of the
Consignment Facilities was ____________; and

      (n) The total number of ounces of U.S. Bullion (as defined in the
Consignment Facilities) located at each Plant was __________.

      (o) Based on paragraph (d) above, the Applicable LIBO Rate Margin is ___%
and the Applicable Commitment Fee Margin is ___%.

      IN WITNESS WHEREOF, the Borrower has caused this Compliance Certificate to
be executed and delivered by its duly Authorized Officer on this ____ day of
_________, 19__.


                                       HANDY & HARMAN


                                       By_________________________
                                         Title:


                                       -3-
<PAGE>   36

                                                                    ATTACHMENT 1
                                                         (to __/__/__ Compliance
                                                                    Certificate)

                    ADJUSTED CONSOLIDATED TANGIBLE NET WORTH
                               (________ __, 19__)

1.    Adjusted Consolidated
      Tangible Net Worth:

      A.    The par value (or value stated on
            the books of the Borrower) of the
            capital stock of all classes of the
            Borrower................................................$_________

      B.    The amount of the consolidated
            surplus, whether capital or earned,
            of the Borrower and its
            and its Subsidiaries................................... $_________

      C.    The sum (or difference, in the
            case of a surplus deficit in
            Item 1.B) of Items 1.A and 1.B......................... $_________

      D.    The aggregate amount of treasury
            stock, subscribed but unissued
            stock, unamortized debt discount
            and expense, good will,
            trademarks, trade names, patents
            and other intangible assets (but
            not deferred charges) of the
            Borrower and its Subsidiaries ......................... $_________

      E.    The aggregate amount of all write-
            ups in the book value of any assets
            owned by the Borrower or its
            Subsidiaries subsequent to March
            16, 1992, other than write-ups of
            assets (and assets of Subsidiaries)
            acquired by the Borrower and/or its
            Subsidiaries (exclusive of
            goodwill) that are made in
            connection with
            the acquisition thereof.................................$_________

      F.    Sum of Items 1.D through 1.E                            $_________
<PAGE>   37

      G.    Consolidated Tangible Net Worth:
            The excess of Item 1.C over Item 1.F................... $_________

      H.    40% of the excess of the Market
            Value of the Borrower's and its
            Subsidiaries' owned precious metal
            holdings over the LIFO cost of such
            holdings as set forth in the
            Borrower's most recent consolidated
            financial statements delivered
            pursuant to clause (a) or clause
            (b) of Section 7.1.1 of the
            Credit Agreement....................................... $_________

      I.    ADJUSTED CONSOLIDATED TANGIBLE NET WORTH:
            The sum of Items 1.G and 1.H............................$_________


                                       -2-
<PAGE>   38

                                                                    ATTACHMENT 2
                                                         (to __/__/__ Compliance
                                                                    Certificate)

                                 LEVERAGE RATIO
                            (on ___________ __, 19__)

2. (1)Leverage Ratio:

      A.   The aggregate outstanding principal
           and stated amount of the
           consolidated Indebtedness of the
           Borrower and its Subsidiaries for
           borrowed money and all other
           obligations evidenced by bonds,
           debentures, notes or other
           similar instruments..................................... $_________

      B.   The aggregate outstanding principal
           and stated amount of the
           consolidated Indebtedness of the
           Borrower and its Subsidiaries
           (without duplication of the
           obligations set forth in Item 2.A of
           this Attachment 2), whether
           contingent or otherwise, relative to
           banker's acceptances issued for the
           account of the Borrower and its
           Subsidiaries ............................................$_________

      C.   The aggregate outstanding principal
           and stated amount of the
           consolidated Indebtedness of the
           Borrower and its Subsidiaries as
           lessee under leases which have been
           or should be, in accordance with
           GAAP, recorded as
           Capitalized Lease Liabilities........................... $_________

      D.   Without duplication, Contingent
           Liabilities of the Borrower and its
           Subsidiaries in respect of any types
           of Indebtedness described in
           Items 2.A through 2.C .................................. $_________

----------
(1)   Computed in accordance with the final sentence contained in the definition
      of "Indebtedness".
<PAGE>   39

      E.   Debt:  The Sum of Items 2.A through 2.D................. $_________

      F.   Adjusted Consolidated Tangible
           Net Worth (from Attachment 1,
           Item 1.I)............................................... $_________

      G.   LEVERAGE RATIO:  The ratio
           of Item 2.E to Item 2.F.................................. ____:1.00


                                       -2-
<PAGE>   40

                                                                    ATTACHMENT 3
                                                         (to __/__/__ Compliance
                                                                    Certificate)

                             INTEREST COVERAGE RATIO
                                 (on __/__/19__)

3.    Interest Coverage Ratio:


      *A.  The consolidated net income of
           the Borrower and its Subsidiaries
           (excluding any extraordinary gains
           and losses)........................................   $__________

      *B.  The aggregate amount of interest
           expense of the Borrower and its
           Subsidiaries, including the portion
           of any rent paid on Capital Lease
           Liabilities which is allocable to
           interest expense in accordance with
           GAAP and including fees or rents
           arising from or relating to
           consignment or leasing of precious
           metals other than up-front fees paid
           on the Effective Date to the Lenders
           (provided, that any such interest
           expense which is subject to a
           Hedging Obligation will be
           calculated on the net effect of any
           payments made by the other party to
           such Hedging Obligation)...........................   $__________

      *C.  To the extent deducted in
           determining Net Income,
           provisions for income taxes........................   $__________

      D.   EBIT:  The sum of Items 3.A
           through 3.C........................................   $__________

      E.   Interest Expense: The amount set forth in Item 3.B above minus the
           effects of the non-recurring, pre-tax charges in an aggregate amount
           not to exceed $9,500,000 relating to the Borrower's discontinuance
           of its karat gold fabricating product

----------
*     The amount which, in accordance with GAAP, would be included on the
      consolidated financial statements of the Borrower and its Subsidiaries.
<PAGE>   41

           line in East Providence, Rhode Island and additional
           costs primarily related to that division's ongoing
           operation in Fairfield, Connecticut.....................$__________

      F.   INTEREST COVERAGE RATIO:  The ratio
           of Item 3.D to Item 3.E............................      _____:1.00


                                       -2-
<PAGE>   42

                                                                    ATTACHMENT 4
                                                         (to __/__/__ Compliance
                                                                    Certificate)

                            NET DEBT TO EBITDA RATIO
                    EBITDA TO INTEREST RATIO (on __/__/19__)

4.    I.   Net Debt to EBITDA Ratio:

      A.   Debt: Item 2.E from Attachment 2...................   $__________

      B.   The aggregate amount of cash and
           Cash Equivalent Investments (not
           subject to any Lien or other
           encumbrance) owned by the Borrower
           and its Subsidiaries on the last day
           of the applicable Fiscal Quarter...................   $__________

      C.   Net Debt:  Item 4.A minus Item 4.B.................   $__________

     *D.   EBIT: Item 3.D from Attachment 3...................   $__________

     *E.   To the extent deducted in
           determining Net Income,
           provisions for depreciation of assets..............   $__________

     *F.   To the extent deducted in
           determining Net Income,
           provisions for amortization........................   $__________

      G.   EBITDA:  The sum of Items 4.D
           through 4.F........................................   $__________

      H.   NET DEBT TO EBITDA RATIO:  The ratio
           of Item 4.C to Item 4.G............................     ____:1.00

    II.    EBITDA to Interest Ratio:

      I.   EBITDA:  Item 4.G above............................   $__________

      J.   Interest Expense:  Item 3.E........................   $__________

      K.   EBITDA TO INTEREST RATIO:  The ratio of
           Item 4.I to Item 4.J...............................     ____:1.00

----------
*     The amount which, in accordance with GAAP, would be included on the
      consolidated financial statements of the Borrower and its Subsidiaries.
<PAGE>   43

                                                                    ATTACHMENT 5
                                                         (to __/__/__ Compliance
                                                                    Certificate)

                                 DESIGNATED DEBT
                           (as of _________ __, 19__)

5.    Designated Debt:

      A.   Current Debt: The aggregate amount
           of current maturities of the
           consolidated Debt of the Borrower
           and its Subsidiaries, determined in
           accordance with GAAP...............................   $_________

      B.   The sum of the aggregate outstanding
           principal amount of all Loans plus
           Letter of Credit Outstandings (as
           such terms are defined in the Long
           Term Credit Agreement).............................   $_________

      C.   The sum of Item 5.A and Item 5.B...................   $_________

      D.   90% of the Market Value of the gold,
           silver and platinum group metals and
           the gold, silver and platinum group
           metals' content of alloys then owned
           by the Borrower and its Subsidiaries
           in inventory and not held in
           consignment........................................   $_________

      E.   75% of the Eligible Receivables of
           the Borrower and its Subsidiaries as
           computed on Attachment 6 hereto....................   $_________

      F.   The aggregate amount of cash and
           Cash Equivalent Investments of the
           Borrower and its Subsidiaries, but
           only to the extent that such cash
           and Cash Equivalent Investments are
           not subject to any Lien and (if held
           or owned by a Subsidiary) are
           transferable to the Borrower without
           the consent or approval of any
           other Person.......................................   $_________
<PAGE>   44

      G.   The sum of Items 5.D through 5.F...................   $_________

      H.   The excess of Item 5.C over Item 5.G...............   $__________


                                       -2-
<PAGE>   45

                                                                    ATTACHMENT 6
                                                         (to __/__/__ Compliance
                                                                    Certificate)

                              ELIGIBLE RECEIVABLES
                           (as of _________ __, 19__)

6.    Eligible Receivables:

      A.   Without duplication, the aggregate
           amount of Receivables of the
           Borrower and its Subsidiaries......................   $_________

      B.   The amount of such Receivables
           lawfully owned by the Borrower or
           such Subsidiary which is not free
           and clear of Liens (other than Liens
           permitted under Section 7.2.3 of the
           Credit Agreement)..................................   $_________

      C.   The amount of such Receivables which
           is not valid, binding and legally
           enforceable obligations of the
           obligor under such Receivable......................   $_________

      D.   The amount of such Receivables which
           is subject to any dispute, setoff,
           counterclaim or other claim or
           defense on the part of the obligor
           thereunder, or which is subject to
           any obligor denying liability under
           such Receivable in whole or in part................   $_________

      E.   The amount of such Receivables which
           is not a bona fide Receivable
           arising from the sale (on an
           absolute, and not a consignment,
           approval, or sale-and-return-
           basis (subject to the terms of
           the parenthetical in clause (d) of
           the definition of "Eligible Receivable"
           contained in the Credit Agreement))................   $_________

      F.   The amount of such Receivables which
           is payable more than 90 days after
           the shipping of goods giving rise to
           such Receivable, or is more than
           60 days past due...................................   $_________
<PAGE>   46

      G.   The amount of such Receivables
           which have been written off or
           reserved against...................................   $_________

      H.   The amount of such Receivables which
           is the obligation of an obligor that
           is either an Affiliate of the
           Borrower, or the subject of any
           reorganization, bankruptcy,
           receivership, custodianship,
           insolvency or like proceeding or any
           event of the nature set forth in
           clauses (a) through (d) of Section
           8.1.9 of the Credit Agreement......................   $_________

      I.   The sum of Items 6.B through 6.H...................   $_________

      J.   Item 6.A minus Item 6.I............................   $_________

      K.   75% of the amount of the GO/DAN
           Receivable   ......................................   $_________

      L.   ELIGIBLE RECEIVABLES: Item 6.J plus
           Item 6.K     ......................................   $_________


                                       -2-