exv10w1





 



Exhibit 10.1






505 Fifth Avenue

New York, New York 10017




December 11, 2009




Horsehead Corp.

300 Frankfort Road

Monaca, PA 15061

Attn: Chief Financial Officer and General Counsel




RE: Payoff




Ladies and Gentlemen:




The undersigned, The CIT Group/Business Credit, Inc. (“CIT”), has been informed that
Horsehead Corp. (the “Borrower”) will pay off all of the liabilities, obligations and
indebtedness (the “Existing Indebtedness”) owing by the Borrower to CIT under or in
connection with that certain Financing Agreement, dated July 15, 2005, among CIT, as the Agent, the
Lenders party thereto from time to time, the Borrower and the Guarantors, as amended, and each of
the documents, instruments and other agreements executed in connection therewith (collectively, the
“Financing Agreement”). All capitalized terms used but not otherwise defined herein shall
have the meanings assigned to them in the Financing Agreement.



If paid by 3:00 p.m. New York time on December 11, 2009, the amount necessary to pay all of the
Existing Indebtedness is $44,028.23 (the “Payoff Amount”), as detailed on Exhibit A
hereto. Amounts set forth above assume that no additional financing is provided by CIT to the
Borrower and no repayment of Existing Indebtedness is made by the Borrower on or after the date of
this letter and prior to the Payoff Effective Time (as defined below).



This letter will confirm and evidence Borrower’s agreement that the Payoff Amount is to be paid by
wire transfer to the account identified below:



	 	 	 
	Bank Name:
	 	JPMorgan Chase Bank, N.A.
	ABA Number:
	 	021000021
	Account Name:
	 	The CIT Group/Business Credit, Inc.
	Account Number:
	 	144064425
	Reference:
	 	Horsehead Corp.














 





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Upon receipt by CIT of (1) the Payoff Amount in the manner set forth above, and (2) a fully
executed counterpart of this letter agreement signed by Borrower (the time at which the foregoing
conditions shall first be satisfied is herein referred to as the “Payoff Effective Time”),
(a) all of CIT’s commitments to extend further credit to the Borrower under the Financing Agreement
(and the Letter of Credit Guaranties) will automatically terminate, and (b) all liabilities,
obligations and indebtedness of the Borrower to CIT shall be deemed satisfied in full, and all
liens and security interests of CIT in any and all of the property (and any or all of the capital
stock) of the Borrower and its subsidiaries shall be deemed released and terminated.



Notwithstanding anything contained herein to the contrary, the Borrower understands and agrees
that, as provided in the Financing Agreement, certain indemnities and covenants survive termination
of the Financing Agreement. Further, notwithstanding anything contained herein to the contrary, in
the event that any errors or omissions have been made in the calculation of the sums due in respect
of the Payoff Amount, CIT expressly reserves all rights and entitlements to all monies lawfully due
to CIT under the terms of the Financing Agreement.



In addition to the foregoing, upon the Payoff Effective Time, Borrower will be authorized to file
any or all UCC financing statement terminations and to file and deliver to the appropriate parties
all other release and termination documents necessary to terminate the perfection of CIT’s liens
and security interests in the assets of the Borrower and its subsidiaries. CIT agrees that, at
Borrower’s expense, CIT will take such further actions and execute and deliver such other documents
and agreements as may be reasonably requested by the Borrower to further evidence the satisfaction
of the Existing Indebtedness and the release of any of CIT’s liens or security interests.



The Payoff Amount has been calculated assuming that the proceeds of all checks or similar
instruments for the payment of money (collectively, “Checks”) that have been received by
CIT and credited to the Borrower’s account with CIT are good collected funds. In consideration of
CIT’s release of the liens and security interests in and to Borrower’s property, the Borrower
agrees to reimburse CIT for all losses and liabilities which CIT may incur at any time as a result
of any nonpayment, claim, refund, or chargeback of any Check together with any expenses or other
charges incidental thereto incurred by CIT (to the extent such losses, liabilities, expenses and
charges are in excess of the General Reserve described below). The amount of any such losses or
liabilities reimbursed hereunder shall be paid to CIT promptly by the Borrower upon CIT’s demand
therefor, and the amount of such demand shall be conclusive and binding on the Borrower in the
absence of manifest error.



As collateral security for the Borrower’s obligations, indebtedness, and liabilities to CIT with
respect to (x) Checks and (y) other expenses incurred by CIT or for which CIT receives an invoice
on or after the date hereof and which are reimbursable under the Financing Agreement (the
“General Reimbursement Obligations”), Borrower hereby (i) agree to pay to CIT (in addition
to all of Borrower’s obligations outstanding as of the date hereof) the additional amount of $5,000
(the “General Reserve”) and (ii) pledge and











 





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assign to CIT, and grant to CIT a continuing security interest in and lien upon, all of Borrower’s
right, title and interest in and to the General Reserve. The General Reserve shall (x) at all
times be held by CIT or CIT’s designee, (y) at all times be under CIT’s dominion and control and
(z) be non-interest bearing. CIT may at any time and from time to time, and without notice to the
Borrower or to any other party (any such notice being hereby expressly waived) set off, charge
and/or apply all of the General Reserve against and on account of the General Reimbursement
Obligations as they come due. Any balance of said General Reserve remaining after sixty (60) days
have elapsed from the date hereof shall be returned to the Borrower.



EFFECTIVE UPON THE PAYOFF EFFECTIVE TIME, AND IN CONSIDERATION OF THE ABOVE AND FOR OTHER VALUABLE
CONSIDERATION THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE BORROWER FOR ITSELF AND ITS
SUCCESSORS, ASSIGNS, PARENTS, SUBSIDIARIES, AFFILIATES, PREDECESSORS, EMPLOYEES, AGENTS, HEIRS AND
EXECUTORS, AS APPLICABLE (COLLECTIVELY, “RELEASORS”), JOINTLY AND SEVERALLY, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY RELEASE AND FOREVER DISCHARGE CIT, AND ITS SUBSIDIARIES, AFFILIATES,
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, CONSULTANTS, ATTORNEYS, PREDECESSORS, SUCCESSORS AND
ASSIGNS, BOTH PRESENT AND FORMER (INDIVIDUALLY, A “RELEASEE” AND COLLECTIVELY, THE
“RELEASEES”) OF AND FROM ANY AND ALL MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, DEBTS,
CONTROVERSIES, TORTS, DAMAGES, JUDGMENTS, EXECUTIONS, CLAIMS AND DEMANDS WHATSOEVER, WHETHER OR NOT
PRESENTLY SUSPECTED, CONTEMPLATED OR ANTICIPATED, BASED UPON, OR IN ANY MANNER CONNECTED WITH ANY
TRANSACTION, EVENT, CIRCUMSTANCE, ACTION, OMISSION, FAILURE TO ACT OR OCCURRENCE OF ANY SORT OR
TYPE, WHETHER KNOWN OR UNKNOWN, WHICH OCCURRED, EXISTED, OR WAS TAKEN OR PERMITTED PRIOR TO THE
PAYOFF EFFECTIVE DATE WITH RESPECT TO THE OBLIGATIONS, THE FINANCING AGREEMENT OR THE
ADMINISTRATION THEREOF, INCLUDING, WITHOUT LIMITATION, ANY SO-CALLED “LENDER LIABILITY” CLAIMS OR
DEFENSES WHICH IT HAS, ASSERTED OR UNASSERTED, IN LAW OR IN EQUITY, WHICH RELEASORS EVER HAD OR NOW
HAVE AGAINST THE RELEASEES. IF THE BORROWER ASSERTS OR COMMENCES ANY CLAIM, COUNTER-CLAIM, DEMAND,
OBLIGATION, LIABILITY OR CAUSE OF ACTION IN DEROGATION OF THE FOREGOING RELEASE OR CHALLENGES THE
ENFORCEABILITY OF THE FOREGOING RELEASE (IN EACH CASE, A “VIOLATION”), THEN THE BORROWER
AGREES TO PAY IN ADDITION TO SUCH OTHER DAMAGES AS ANY RELEASEE MAY SUSTAIN AS A RESULT OF SUCH
VIOLATION, ALL ATTORNEYS’ FEES AND EXPENSES (INCLUDING IN-HOUSE AND OUTSIDE COUNSEL) INCURRED BY
SUCH RELEASEE AS A RESULT OF SUCH VIOLATION.












 





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This letter agreement shall be governed by the internal laws of the State of New York. No party
may assign its rights, duties or obligations under this letter agreement without the prior written
consent of the other parties. This letter agreement supersedes any and all of our prior
discussions and correspondence regarding the Payoff Amount. This letter agreement shall inure to
the benefit of CIT, the Lenders and the Borrower, and each of their respective successors and
assigns. In addition, this letter agreement may be executed in multiple counterparts, all of which
taken together shall constitute one and the same agreement, and any of the parties hereto may
execute this letter agreement by signing any such counterpart.



	 	 	 	 	 
	 	Very truly yours,



THE CIT GROUP/BUSINESS CREDIT, INC.

 	 
	 	By:  	/s/ Victor Alarcon
 	 
	 	 	Name:  	Victor Alarcon 	 
	 	 	Title:  	Vice President 	 
	 



Acknowledged and Agreed:




	 	 	 	 	 
	HORSEHEAD CORP.,

the Borrower

 	 	 
	/s/ Robert D. Scherich
 	 	 
	Name:  	Robert D. Scherich 	 	 
	Title:  	Vice President and Chief Financial Officer 	 	 











 





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Exhibit A




Payoff Amount Details




	 	 	 	 	 
	LOAN BALANCE	 	AMOUNT	 
	REVOLVER (0A)
	 	 	—	 
	INTEREST 12/1-12/11/09
	 	 	68.70	 
	UNUSED LINE FEE 12-1/09 to 12/10/09
	 	 	9,212.27	 
	COLLATERAL MANAGEMENT FEE
	 	 	2,083.33	 
	UNUSED LINE FEE 12-11/09 to 1/10/10
	 	 	27,663.93	 
	GENERAL RESERVE
	 	 	5,000.00	 
	 
	 	 	 
	TOTAL PAYOUT
	 	 	44,028.23