EX-10.10



 





Exhibit 10.10




     FIRST AMENDMENT dated as of October 21, 2005 (“Amendment”), to the FINANCING AGREEMENT, dated
as of July 15, 2005 (as the same may be amended, modified or supplemented from time to time, the
“Financing Agreement”), among HORSEHEAD CORP. (f/k/a Horsehead Acquisition Corp.), a Delaware
corporation (the “Company”), HORSEHEAD INTERMEDIARY CORP., a Delaware corporation (“Horsehead
Intermediary”), CHESTNUT RIDGE RAILROAD CORP., a Delaware corporation (together with the Company
and Horsehead Intermediary, the “Credit Parties”), THE CIT GROUP/BUSINESS CREDIT, INC. (“CIT”) and
the other entities from time to time parties thereto as lenders (the “Lenders”) and CIT, as agent
for the Lenders (the “Agent”). Terms which are capitalized in this Amendment and not otherwise
defined shall have the meanings ascribed to such terms in the Financing Agreement.



     WHEREAS, in connection with the Agent’s syndication of the Revolving Line of Credit, as
contemplated by the parties to the Financing Agreement on the Closing Date, the Agent and the
Lenders have asked the Credit Parties to agree to modify certain terms of the Financing Agreement,
and the Credit Parties have agreed to the foregoing request, on the terms contained in this
Amendment;



     NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in
order to induce new Lenders to enter into the Financing Agreement, the parties hereby agree as
follows:



     Section One.
Amendments.  Effective as of the date hereof, the Financing
Agreement is hereby amended as follows:



     (a) Clause (b) of the definition of “Required Lenders” set forth in Section 1.1 of the
Financing Agreement is deleted in its entirety and the following substituted in lieu thereof:




“(b) at all times while there are three (3) or more Lenders
hereunder, those Lenders holding more than fifty percent (50%) of
the total Commitments under the Revolving Line of Credit (or more
than fifty percent (50%) of the outstanding principal amount of all
loans outstanding hereunder, as reflected by CIT’s System, in the
event that the Commitments of the Lenders hereunder have terminated)
except that, for purposes of this clause (b), with respect to voting
on amendments to the definitions of “Net Availability”,
“Availability Reserve”, “Borrowing Base”, “Dilution Percentage”,
“Eligible Accounts Receivable”, “Eligible Finished Goods”, “Eligible
Inventory”, “Eligible Raw Materials”, “Eligible Work-In-Process” or
“PP&E Component”, Required Lenders shall mean those Lenders holding
more than sixty-six and two-thirds percent (66 2/3%) of the total
Commitments under the Revolving Line of Credit (or more than
sixty-six and two-thirds percent (66 2/3%) of



 









 







the outstanding
principal amount of all loans outstanding
hereunder, as reflected by CIT’s System, in the event that the
Commitments of the Lenders hereunder have terminated).”



     (b) The following proviso is added at the end of the last sentence of Section 3.1(d)(ii) of
the Financing Agreement:




“;provided, however, that no Lender shall be
obligated to advance its Pro Rata Percentage of a Revolving Loan or
settle with the Agent pursuant hereto with respect to a Revolving
Loan, if, at the time such Revolving Loan is made:
(A) a Default or Event of Default shall have occurred and be
continuing; and (B) the Agent shall have received written notice
from such Lender that such Lender will not make the amount which
would constitute its Pro Rata Percentage of such Revolving Loan
available to the Agent.”



     (c) The following proviso is added at the end of the last sentence of Section 5.1 of the
Financing Agreement:




“;provided, however, that no Lender shall be
obligated to participate in a Letter of Credit, or settle with the
Agent with respect to any charge to the Revolving Loan Account for
an unreimbursed draw under a Letter of Credit, if, at the time of
issuance of such Letter of Credit: (a) a Default or Event of Default
shall have occurred and be continuing; and (b) the Agent shall have
received written notice from such Lender that such Lender will not
participate in such Letter of Credit.”



     (d) The first sentence of Section 10.2 of the Financing Agreement is deleted in its entirety
and the following substituted in lieu thereof:




“Upon the occurrence and during the continuance of a Default or an
Event of Default, all loans, advances and extensions of credit
provided for in Sections 3 and 5 of this Financing
Agreement thereafter shall be made in the Agent’s and each Lender’s
discretion, and the obligation of the Agent and each Lender to make
Revolving Loans, and to assist the Company in opening Letters of
Credit, shall cease unless such Default is cured to the satisfaction
of the Required Lenders or such Event of Default is waived in
accordance herewith.”



     (e) Clause (b) of Section 14.10 of the Financing Agreement is deleted in its entirety and the
following substituted in lieu thereof:



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“(b) alter or amend this Section 14.10, Section
12.2 of this Financing Agreement or the definition of “Required
Lenders”;



     (f) Section 14.10 of the Financing Agreement is further amended by adding the following new
paragraph thereto, immediately before the last paragraph thereof:




“Notwithstanding anything contained in this Financing Agreement
to the contrary, the Agent will not agree to subordinate the
Obligations owing to any Lender without the prior written consent of
such Lender.”



     (g) The final paragraph of Section 14.10 of the Financing Agreement is hereby amended by
deleting the words “its sole discretion” from the second sentence thereof and inserting in place
thereof the words “the exercise of its reasonable business judgment as it deems to be advisable and
in the best interest of the Lenders.”



     Section Two.  Representations and Warranties. Each of the Credit Parties
warrants and represents to the Agent and each Lender as follows:



     (a) the execution, delivery and performance of this Amendment by such Credit Party is within
its corporate powers, has been duly authorized by all necessary corporate action, and such Credit
Party has received all necessary consents and approvals (if any shall be required) for the
execution and delivery of this Amendment;



     (b) upon the execution of this Amendment, this Amendment shall constitute the legal, valid and
binding obligation of such Credit Party, enforceable against such Credit Party in accordance with
its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) general principles of equity; and



     (c) no Default or Event of Default has occurred and is continuing.



     Section Three.  General Provisions.



     (a) Except as herein expressly amended, the Financing Agreement and all other agreements,
documents, instruments and certificates executed in connection therewith, are ratified and
confirmed in all respects and shall remain in full force and effect in accordance with their
respective terms.



     (b) All references to the Financing Agreement in the Financing Agreement and each other Loan
Document shall mean the Financing Agreement as amended hereby and as hereafter amended,
supplemented and modified from time to time.



     (c) This Amendment embodies the entire agreement between the parties hereto with respect to
the subject matter hereof and supercedes all prior agreements, commitments,



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arrangements,
negotiations or understandings, whether written or oral, of the parties with respect thereto.




     (d) This Amendment shall be governed by and construed in accordance with the internal laws of
the State of New York, without regard to the conflicts of law principles thereof.



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     IN WITNESS WHEREOF, the parties to this Amendment have signed below to indicate their
agreement with the foregoing and their intent to be bound thereby.



	 	 	 	 	 	 	 
	 	 	HORSEHEAD CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Robert D. Scherich	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert D. Scherich	 	 
	 	 	Title: CFO	 	 
	 
	 	 	 	 	 	 
	 	 	HORSEHEAD INTERMEDIARY CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Robert D. Scherich	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert D. Scherich	 	 
	 	 	Title: CFO	 	 
	 
	 	 	 	 	 	 
	 	 	CHESTNUT RIDGE RAILROAD CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Robert D. Scherich	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert D. Scherich	 	 
	 	 	Title: CFO	 	 
	 
	 	 	 	 	 	 
	 	 	THE CIT GROUP/BUSINESS CREDIT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Anthony Lavinio	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Anthony Lavinio	 	 
	 	 	Title: Vice President