Document:

exh1030

      [Consent and Amendment to Credit Agreement]   DWT 28490370v9 0089131-000028   1    Consent and   Amendment to Loan Documents      This amendment ("Amendment"). (dated as of December 31, 2015 is between JPMorgan Chase Bank, N.A. (together with its   successors and assigns, the "Bank"), and Nautilus, Inc. (the "Borrower").      1. Preliminary Statements.      1.1 Credit Agreement. The Borrower and the Bank are each a party to that certain Credit Agreement dated as of   December 5, 2014 (as amended, restated, extended, supplemented or otherwise modified from time to time, the   "Credit Agreement"), pursuant to which and subject to the terms and conditions therein contained, the Bank has   approved a credit facility to the Borrower in the principal sum not to exceed Twenty Million and 00/100 Dollars   ($20,000,000.00) in the aggregate at any one time outstanding ("Facility A").      1.2 Line of Credit Note. The loans made by the Bank to the Borrower pursuant to Facility A are evidenced by that   certain Line of Credit Note made by the Borrower in favor of the Bank dated as of December 5, 2014 (as amended,   restated, extended, supplemented or otherwise modified from time to time, the "Line of Credit Note").      1.3 Acquisition of OF Holdings. The Borrower and NCP-OFI GP, LLC, and the other sellers party thereto   (collectively, the "Sellers") have entered into that certain Stock Purchase Agreement dated as of December 31, 2015   (the "Acquisition Agreement"), pursuant to which and subject to the terms and conditions therein contained, the   Borrower has agreed to purchase, and the Sellers have agreed to sell, all of the outstanding equity interests in OF   Holdings, Inc., a Delaware corporation ("OF Holdings").      1.4 Requested Amendment. In connection with the acquisition of OF Holdings, the Borrower has requested that the   Bank (1) make a term loan to the Borrower in the initial principal sum of Eighty Million and 00/100 Dollars   ($80,000,000.00) ("Facility B"), which loan shall be evidenced by that certain Term Note made by the Borrower in   favor of the Bank dated December 31, 2015 (the "Term Note"), (2) extend the term of the availability of Facility A   and (3) make certain other modifications to the Credit Agreement, which the Bank has agreed to do, subject to the   terms and conditions of this Amendment and the Term Note.      2. Definitions and Interpretations.      2.1 Definitions. All capitalized terms used in this Amendment and not otherwise defined herein have the meanings   specified in the Credit Agreement.      2.2 Interpretations. The rules of construction and interpretation specified in Section 2.1 of the Credit Agreement also   apply to this Amendment and are incorporated herein by this reference.      3. Consent.      3.1 Acquisition Agreement. Subject to the terms and conditions of this Amendment, the Bank hereby (A) consents to   the transactions contemplated under the Acquisition Agreement and (B) agrees that the consideration (including   assumed liabilities, earnout payments and any other deferred payment) paid by the Borrower for the purchase of the   outstanding equity interests in OF Holdings pursuant to the Acquisition Agreement shall not be included in   calculating the Borrower's compliance with Clause (12) of Section 5.2(J) of the Credit Agreement.      3.2 Letter of Credit. Subject to the terms and conditions of this Amendment, the Bank hereby consents to the Borrower   permitting to exist, a security interest granted by Octane Fitness, LLC, a Minnesota limited liability company   ("Octane Fitness"), in favor of Associated Bank, N.A., a national banking association ("Associated Bank"), on a   deposit account maintained by Octane Fitness with Associated Bank to secure the obligations of Octane Fitness to   Associated Bank arising in connection with the issuance by Associated Bank of a standby letter of credit for the   account of Octane Fitness in the amount of $23,420 in favor of Altus Northland, LLC, a Delaware limited liability   company; provided that (A) the amount of funds on deposit in such deposit account shall not exceed $75,000 at any   time and (B) the security interest granted to Associated Bank in such deposit account is released not later than   February 29, 2016.      4. Amendments to Loan Documents.  Subject to the terms and conditions of this Amendment, the Bank and the Borrower   agree as follows:     

 

      [Consent and Amendment to Credit Agreement]   DWT 28490370v9 0089131-000028   2      4.1 Amendment to Line of Credit Note.  The Line of Credit Note is hereby amended as follows:      A. Promise to Pay.  In the paragraph titled "Promise to Pay," the reference to the date December 5, 2017 is   deleted and a reference to the date December 31, 2020 is substituted in its stead.      B. Purpose of Loan.  In the paragraph titled "Purpose of Loan," the following sentence is added at the end of   such paragraph:      Borrower agrees not to request any loan or use, or permit any proceeds of any loan to be used, directly or   indirectly, by Borrower or any of its Subsidiaries or its or their respective directors, officers, employees and   agents: (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of   money, or anything else of value, to any Person in violation of any Anti-Corruption Laws; (b) for the   purpose of funding, financing or facilitating any activities, business or transaction of or with any   Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction   would be prohibited by Sanctions if conducted by a corporation incorporated in the United States; or (c) in   any manner that would result in the violation of any Sanctions applicable to any party hereto.      C. General Definitions.  In the paragraph titled "General Definitions," the following definitions are added and   the remaining definitions renumbered accordingly:      2. "Anti-Corruption Laws" means all laws, rules, and regulations of any jurisdiction applicable to the   Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.      7. "Legal Requirements" means any law, ordinance, decree, requirement, order, judgment, rule,   Sanction, regulation (or interpretation of any of the foregoing) of any foreign governmental authority, the   United States of America, any state thereof, any political subdivision of any of the foregoing or any agency,   department, commission, board, bureau, court or other tribunal having jurisdiction over the Bank, any   Pledgor or any Obligor or any of its Subsidiaries or their respective Properties or any agreement by which   any of them is bound.      16. "Sanctions" means economic or financial sanctions or trade embargoes imposed, administered or   enforced from time to time by the U.S. government, including those administered by the Office of Foreign   Assets Control of the U.S. Department of the Treasury or the U.S. Department of State.      17. "Sanctioned Country" means, at any time, a country or territory which is the subject or target of any   Sanctions.      18. "Sanctioned Person" means, at any time, (a) any Person listed in any Sanctions-related list of   designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the   Treasury, the U.S. Department of State, (b) any Person operating, organized or resident in a Sanctioned   Country or (c) any Person controlled by any such Person.      D. Representations by Borrower.  In the paragraph titled "Representations by Borrower," Clauses (d)   through (f) set forth below are inserted between the end of Clause (c) and the phrase "and, if the Borrower is not a   natural Person:"      (d) the Borrower has implemented and maintains in effect policies and procedures designed to ensure   compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents   with Anti-Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and their   respective officers and employees and to the knowledge of the Borrower its directors and agents, are in   compliance with Anti-Corruption Laws and applicable Sanctions in all material respects; (e) none of (i) the   Borrower, any Subsidiary or to the knowledge of the Borrower or such Subsidiary any of their respective   directors, officers or employees, or (ii) to the knowledge of the Borrower, any agent of the Borrower or any   Subsidiary that will act in any capacity in connection with or benefit from any Advance made under this   Note, is a Sanctioned Person; (f) no advance, letter of credit, use of proceeds or other transaction   contemplated by the Related Documents will violate Anti-Corruption Laws or applicable Sanctions;        

 

      [Consent and Amendment to Credit Agreement]   DWT 28490370v9 0089131-000028   3   E. Government Regulations.  In the paragraph titled "Government Regulations," Clause (b) is renumbered   Clause (d) and Clauses (b) and (c) set forth below are inserted between the end of Clause (a) and the beginning of   renumbered Clause (d):      (b) fail to maintain in effect and enforce policies and procedures designed to ensure compliance by the   Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-   Corruption Laws and applicable Sanctions, (c) fail to promptly inform the Bank in writing of all existing   and all threatened litigation, claims, investigations, administrative proceedings and similar actions or   changes in Legal Requirements affecting it which could materially affect its business, assets, affairs,   prospects or financial condition, or      4.2 Amendments to Credit Agreement.  The Credit Agreement is hereby amended as follows:      A. Section 1.3.  Section 1.3 is added as follows:      1.3 Facility B (Term Loan). The Bank has approved a term loan to the Borrower in the principal sum   of $80,000,000.00 ("Facility B"). Credit under Facility B shall be repayable as set forth in a Term   Note dated December 31, 2015, and any renewals, modifications, extensions, rearrangements,   restatements thereof and replacements or substitutions therefor.      B. Section 2.1.  In Section 2.1, the following definition is added and the succeeding definitions re-lettered   accordingly:      AA. "Restricted Payments" means (i) all cash Distributions made or paid with respect to any Equity   Interests in Borrower and (ii) all payments, including any sinking fund or similar deposit, on account of the   purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in   Borrower.      C. Section 5.2(C).  In Clause (5) of Section 5.2(C), the reference to the amount of $3,000,000.00 is deleted   and a reference to the amount of $4,000,000.00 is substituted in its stead.      D. Section 5.2(J).  Clause (12) of Section 5.2(J) is deleted and the following substituted in its stead:      (12) Permitted Acquisitions in an amount not to exceed (a) $20,000,000 in the aggregate in any Test Period   or (b) $60,000,000 in the aggregate during the period commencing on the date of this Agreement and   ending on December 31, 2020.      E. Section 5.2(L).  In Section 5.2(L), the reference to the amount of $10,000,000.00 is deleted and a reference   to the amount of $12,000,000.00 is substituted in its stead.      F. Section 5.2(M).  Section 5.2(M) is deleted and the following substituted in its stead:      M. Fixed Charge Coverage Ratio. Permit its "Fixed Charge Coverage Ratio" (hereinafter defined in   this subsection) for any "Test Period" (hereinafter defined in this subsection) to be less than 1.25   to 1.00.  As used in this subsection, the term "Fixed Charge Coverage Ratio" means its ratio of   (i) net income, plus amortization expense, plus depreciation expense, plus interest expense, plus   income tax expense, plus rent and operating lease payments made, plus non-cash stock based   compensation, plus a one-time addition of expenses paid in cash by Borrower in connection with   the acquisition of the Equity Interests of OF Holdings and the related financing, in an aggregate   amount not to exceed $1,000,000, plus other non-cash, non-recurring expenses agreed to by Bank,   minus other non-cash or non-recurring income as agreed to by Bank, minus Capital Expenditures   made which were not financed with long term debt, minus income tax expense, minus Restricted   Payments made, minus, to the extent not included in the calculation of net income, cash earnout   payments made to the sellers of Equity Interests of OF Holdings, Inc., all computed for the Test   Period, to (ii) scheduled principal payments made on long term debt, plus capitalized lease   payments made, plus interest expense, plus rent and operating lease payments made, all computed   for the Test Period.  As used in this subsection, the term "Test Period" means each period of four   consecutive fiscal quarters.  Notwithstanding anything else contained in the Credit Agreement, the     

 

      [Consent and Amendment to Credit Agreement]   DWT 28490370v9 0089131-000028   4   Fixed Charge Coverage Ratio shall be determined for Borrower and its Subsidiaries on a   consolidated basis.      G. Section 5.2(N).  Section 5.2(N) is deleted and the following substituted in its stead:      N. Funded Debt to EBITDA Ratio. Permit its "Funded Debt to EBITDA Ratio" (hereinafter defined   in this subsection) for any "Test Period" (hereinafter defined in this subsection) to be less than   (1) for each Test Period ending from December 31, 2015 through September 29, 2016, 3.00 to   1.00, (2) for each Test Period ending from September 30, 2016 through September 29, 2017, 2.50   to 1.00 and (3) for each Test Period ending from and after September 30, 2017, 2.00 to 1.00.  As   used in this subsection, the term "Funded Debt to EBITDA Ratio" means its ratio of (a) total   liabilities excluding (i) accounts arising from the purchase of goods and services in the ordinary   course of business, (ii) accrued expenses or losses, and (iii) deferred revenues or gains, all   computed as of the end of the Test Period, to (b) net income, plus amortization expense, plus   depreciation expense, plus interest expense, plus income tax expense, plus non-cash stock based   compensation, plus other non-cash, non-recurring expenses agreed to by Bank, minus other non-   cash, non-recurring income as agreed to by Bank, all computed for the Test Period.  As used in   this subsection, the term "Test Period" means each period of four consecutive fiscal quarters.    Notwithstanding anything else contained in the Credit Agreement, the Fixed Charge Coverage   Ratio shall be determined for Borrower and its Subsidiaries on a consolidated basis.      5. Conditions Precedent to Effectiveness of Amendment.  Notwithstanding anything contained herein to the contrary, this   Amendment shall become effective as of December 31, 2015; provided that each of the following conditions is fully and   simultaneously satisfied on or before December 31, 2015:      5.1 Delivery of Amendment.  The Borrower and the Bank shall have executed and delivered counterparts of this   Amendment to each other, sufficient in number for distribution to the Borrower and the Bank;      5.2 Delivery of Term Note.  The Borrower shall have executed and delivered to the Bank the Term Note;      5.3 Delivery of Guarantor Documents.      A. OF Holdings.  OF Holdings shall have executed and delivered to the Bank (1) that certain Continuing   Guaranty made by OF Holdings in favor of the Bank dated as of December 31, 2015 (the "OF Holdings   Guaranty") and (2) that certain Continuing Security Agreement made by OF Holdings in favor of the Bank dated as   of December 31, 2015 (the "OF Holdings Security Agreement" and together with the OF Holdings Guaranty,   together the "OF Holdings Documents");      B. Octane Fitness.  Octane Fitness shall have executed and delivered to the Bank (1) that certain Continuing   Guaranty made by Octane Fitness in favor of the Bank dated as of December 31, 2015 (the "Octane Fitness   Guaranty") and (2) that certain Continuing Security Agreement made by Octane Fitness in favor of the Bank dated   as of December 31, 2015 (the "Octane Fitness Security Agreement" and together with the Octane Fitness   Guaranty, together the "Octane Fitness Documents");      5.4 Acquisition.  The Bank shall have received such evidence as the Bank shall request that all of the transactions   contemplated under the Acquisition Agreement have been consummated in accordance in all material respects with   the terms of the Acquisition Agreement.      5.5 Authorization.  The Bank shall have received such evidence of corporate authority and action as the Bank shall   request demonstrating that (A) the execution, delivery and performance of this Amendment and the Term Note has   been duly authorized by the Borrower, (B) the execution, delivery and performance of the OF Holdings Documents   has been duly authorized by OF Holdings, and (C) the execution, delivery and performance of the Octane Fitness   Documents has been duly authorized by Octane Fitness;      5.6 Representations.  The representations of the Borrower and any other parties, other than the Bank, in the Related   Documents are true on and as of the effective date of this Amendment;        

 

      [Consent and Amendment to Credit Agreement]   DWT 28490370v9 0089131-000028   5   5.7 No Event of Default.  No default, event of default or event that would constitute a default or event of default but for   the giving of notice, the lapse of time or both, has occurred in any provision of the Credit Agreement, the Note or   any other Related Documents and is continuing; and      5.8 Additional Approvals, Opinions, and Documents.  The Bank shall have received any other approvals, opinions   and documents as it may reasonably request.      6. No Further Amendment.  Except as expressly modified by this Amendment, the Credit Agreement and the other Related   Documents shall remain unmodified and in full force and effect and the parties hereby ratify their respective obligations   thereunder.      7. Reservation of Rights.  The Borrower acknowledges and agrees that the execution and delivery by the Bank of this   Amendment shall not be deemed to create a course of dealing or otherwise obligate the Bank to forbear or execute similar   amendments under the same or similar circumstances in the future.      8. Miscellaneous.      8.1 Governing Law. This amendment shall be governed by and construed in accordance with the laws of the State of   Washington (without giving effect to its laws of conflicts).      8.2 Counterparts. This amendment may be executed in multiple counterparts, each of which, when so executed, shall   be deemed an original, but all such counterparts, taken together, shall constitute one and the same amendment.    Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging   means shall be effective as delivery of a manually executed counterpart of this Amendment.      8.3 Integration. This Amendment, the Credit Agreement, the other Related Documents, and that certain covenant   calculation letter between the Bank and the Borrower dated as of the date hereof embody the entire agreement and   understanding between the Borrower and the Bank and supersede all prior agreements and understandings relating to   their subject matter. If any one or more of the obligations of the Borrower under this amendment is invalid, illegal or   unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining obligations of the   Borrower shall not in any way be affected or impaired, and the invalidity, illegality or unenforceability in one   jurisdiction shall not affect the validity, legality or enforceability of the obligations of the Borrower under this   amendment in any other jurisdiction.         [Remainder of page intentionally left blank]ex101to8k06447001_02242016.htm

Exhibit 10.1

 

AMENDED AND RESTATED

 

MANAGEMENT SERVICES AGREEMENT

 

THIS AMENDED AND RESTATED MANAGEMENT SERVICES AGREEMENT (the “Agreement”), effective as of February 23, 2016, is by and between SPH Services, Inc. (“SPH Services”), a Delaware corporation, having an office at 590 Madison Avenue, 32nd Floor, New York, New York 10022, and Handy & Harman Ltd., a Delaware corporation, and Handy & Harman Group Ltd., a Delaware corporation (collectively, the “Company”), having an office at 1133 Westchester Avenue, Suite N222, White Plains, New York 10604.

 

W I T N E S S E T H:

 

WHEREAS, the Company and SP Corporate Services LLC (“SP Corporate”), a Delaware limited liability company, are parties to a Management Services Agreement dated as of January 1, 2012, as amended pursuant to Amendment No. 1 dated as of March 27, 2013, and Amendment No. 2 dated as of May 3, 2015 (the “Management Services Agreement”), whereby SP Corporate furnishes the Company and its subsidiaries with certain Services (as defined herein);

 

WHEREAS, pursuant to Section 14.04 of the Management Services Agreement, SP Corporate wishes to assign its rights and responsibilities under the Management Services Agreement to SPH Services, its parent company, and SPH Services wishes to assume such rights and responsibilities (the “Assignment”);

 

WHEREAS, pursuant to the execution of this Agreement, the Company hereby irrevocably acknowledges and consents to the Assignment;

 

WHEREAS, the parties desire to amend and restate the Management Services Agreement to have SPH Services furnish certain services to the Company, as set forth on Exhibit A attached hereto, as it may be amended from time to time pursuant to the terms hereof (the “Services”), and make certain other changes, and SPH Services has agreed to furnish the Services, pursuant to the terms and conditions hereinafter set forth; and

 

WHEREAS, the Company has obtained all necessary approvals under its corporate governance documents for its entry into this Agreement.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

 

Section 1.                      Engagement of SPH Services

 

1.01.           During the term of this Agreement, SPH Services shall provide to the Company such Services, as more fully described and defined on Exhibit A, as may be necessary or desirable or as may be reasonably requested or required, in connection with the business, operations and affairs, both ordinary and extraordinary, of the Company and its subsidiaries and affiliates.

 

In performing the Services, SPH Services shall be subject to the supervision and control of the board of directors of the Company or any authorized officers or employees, as designated by the board of directors. SPH Services may incur obligations or enter into transactions on behalf of the Company subject to any mutually agreed upon limits as established from time to time by the Company and SPH Services.

 

  

  

  

 

1.02.           While the amount of time and personnel required for performance by SPH Services hereunder will necessarily vary depending upon the nature and type of Services, SPH Services shall devote such time and effort and make available such personnel as may from time to time reasonably be required for the performance of the Services hereunder.

 

1.03.           Exhibit A may be amended from time to time to provide for additional Services, the elimination of certain Services, increases or decreases to the compensation paid hereunder, or other changes, upon the mutual agreement of the parties hereto.

 

Section 2.                      Term

 

2.01.           This Agreement shall commence effective as of February 23, 2016, and shall continue through December 31, 2016, and shall automatically renew for successive one (1) year periods unless and until terminated by any party, on any anniversary date, upon not less than thirty (30) days prior written notice to the other. If an involuntary or voluntary case or proceeding is commenced against or by the Company under the United States Bankruptcy Code, as amended, or any similar federal or state statute, any party hereto may terminate this Agreement upon thirty (30) days prior written notice to the others.

 

2.02.           In the event the Company terminates this Agreement pursuant to Section 2.01, the Company shall establish a reserve fund, in an amount to be determined in good faith by the board of directors of SPH Services and the Company for the payment of any and all expenses incurred or due by SPH Services following the termination of the Agreement on behalf of or attributable to the Services provided to the Company in accordance with Section 3.02 hereof. Any unused portion of the reserve fund will be promptly returned to the Company at such time or times as SPH Services determines that no further payments are due and no further potential liability attributable to the Services remains.

 

Section 3.                      Payments to SPH Services

 

3.01.           In consideration of the Services furnished by SPH Services hereunder, the Company shall pay to SPH Services a fixed monthly fee as set forth in Section 3.02 in advance on the first day of each month, subject to equitable adjustment for any increased costs between fee periods, and which shall otherwise be adjusted upon agreement by the parties upon the amendment of Exhibit A pursuant to Section 1.03.

 

3.02.           In addition to the fixed monthly fee set forth in Section 3.01 hereof, the Company shall promptly reimburse SPH Services and its representatives for (a) all expenses, regardless of when incurred, whether during the term hereof or in the future, including any extraordinary or nonrecurring expenses, paid or incurred by SPH Services on behalf of or attributable to the Services provided to the Company, including, but not limited to, any expenses related to severance payments or lease liabilities; and (b) the Company’s pro rata share of all other expenses, regardless of when incurred, whether during the term hereof or in the future, including any extraordinary or nonrecurring expenses, if not exclusively attributable to another client of SPH Services, which were paid or incurred by SPH Services, including, but not limited to, any expenses related to severance payments or lease liabilities. The expenses described in the immediately preceding clause (b) above shall be allocated among all of SPH Services’ clients based on the annual fees of such clients as of the date of this Agreement.

 

  

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3.03.           SPH Services shall earn a reasonable success fee to be mutually agreed to by the parties for any acquisition completed by the Company during the term of this Agreement.

 

Section 4.                      Limitation on Liability

 

To the fullest extent permitted by law and as consistent with the Company’s By-laws and Certificate of Incorporation, as each may be amended from time to time (the “Company's Charter Documents”), SPH Services and its officers, directors, employees and agents shall not be liable to the Company, any affiliate thereof or any third party for any losses, claims, damages, liabilities, penalties, obligations or expenses, including reasonable legal fees and expenses, of any kind or nature whatsoever due to any act or omission in connection with the rendering of the Services hereunder, unless that act or omission constitutes gross negligence, willful misconduct or fraud.  Further, SPH Services shall reasonably rely on information provided to it about the Company, if any, that is provided by the Company or the Company’s affiliates, employees or agents.  In no event shall SPH Services be liable for any error or inaccuracy of any report, computation or other information or document produced in accordance with this Agreement, for whose accuracy the Company assumes all responsibility, unless resulting from the gross negligence or willful misconduct of SPH Services or SPH Services’ officers, directors, employees or agents.

 

Section 5.                      Indemnity and D&O Insurance

 

To the fullest extent permitted by law and as consistent with the Company's Charter Documents, the Company shall defend, indemnify, save and hold harmless SPH Services and its officers, directors, employees, agents, successors or assigns (the “Indemnitees”) against any claims, liabilities, damages, losses, costs or expenses, including amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim of any nature whatsoever resulting from the Indemnitees’ activities or services under this Agreement, including any activities or services rendered prior to the date hereof for the Company by the Indemnitees or any predecessor thereto (a “Claim”), except to the extent occasioned by the gross negligence or willful misconduct of the Indemnitees.  At the written request of SPH Services and/or its representatives, the Company will advance to them the legal or other costs and reasonable expenses of investigating or defending against any Claim in advance of the final disposition of such Claim.  To the fullest extent permitted by law and as consistent with the Company’s Charter Documents, the Company’s obligation to indemnify SPH Services hereunder shall extend to and inure to the benefit of the Indemnitees.  The Company shall cause each Indemnitee to be covered by the Company’s D&O insurance policy applicable to other officers and directors and shall provide a letter of indemnity to any of the Indemnitees upon their request.  If SPH Services or any Indemnitee should reasonably determine its interests are or may be adverse to the interests of the Company, SPH Services or such Indemnitee may retain its own counsel in connection with such claim or alleged claim or action, in which case the Company shall be liable, to the extent permitted under this Section 5, to SPH Services or such Indemnitee for any reasonable and documented legal, accounting or other directly related fees and expenses incurred by SPH Services or such Indemnitee in connection with its investigating or defending such claim or alleged claim or action.  In addition, neither SPH Services nor any of its officers, directors, members, employees, affiliates or consultants shall be liable to the Company or any third party for any special, consequential or exemplary damages (including lost or anticipated revenues or profits relating to the same) arising from any claim relating to this Agreement or any of the services provided hereunder, whether such claim is based on warranty, contract, tort (including negligence or strict liability) or otherwise, even if an authorized representative of SPH Services is advised of the possibility or likelihood of the same.

 

  

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Section 6.                      Confidential Information

 

SPH Services shall not at any time during or following the termination or expiration for any reason of this Agreement, directly or indirectly, disclose, publish or divulge to any person (except where necessary in connection with the furnishing of the Services under this Agreement), appropriate or use, or cause or permit any other person to appropriate or use, any of the Company’s inventions, discoveries, improvements, trade secrets, copyrights or other proprietary, secret or confidential information not then publicly available.

 

Section 7.                      Non-Exclusive Arrangement; Conflicts of Interest

 

7.01.           The Company acknowledges that SPH Services and its Affiliated Companies (as defined below) has in the past and may from time to time in the future enter into agreements similar to this Agreement with other companies pursuant to which SPH Services may agree to provide services similar in nature to the Services being provided hereunder.  The Company understands that the person or persons providing the Services hereunder may also provide similar or additional services to other companies, including as officers and directors of such companies.  In addition, to the extent business opportunities arise, the Company acknowledges that SPH Services will be under no obligation to present such opportunity to the Company, and SPH Services may, in its sole discretion, present any such opportunity to whatever company it so chooses, or to none at all; provided, however, nothing contained herein shall affect or otherwise limit the fiduciary obligations of the officers and directors of the Company.

 

7.02.           The Company, SPH Services and their respective Affiliated Companies (as defined below) recognize and acknowledge that as a result of SPH Services providing the Services pursuant to this Agreement the potential for conflicts of interest exist between and/or among SPH Services, the Company, Affiliated Companies of SPH Services and the Company and the respective officers and directors of SPH Services and the Company, including but not limited to (i) that an Affiliated Company of SPH Services may be a majority or significant stockholder of the Company, (ii) that directors, officers, members and/or employees of SPH Services or of Affiliated Companies of SPH Services may serve as directors and/or officers of the Company, (iii) that SPH Services and Affiliated Companies thereof may engage and are expected to continue to engage in the same, similar or related lines of business as those in which the Company, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Company, directly or indirectly, may engage, (iv) that SPH Services and Affiliated Companies thereof may have an interest in the same areas of corporate opportunity as the Company and Affiliated Companies thereof, and (v) that SPH Services and Affiliated Companies thereof may engage in material business transactions with the Company and Affiliated Companies thereof, including (without limitation) providing the Services to or being a significant supplier of the Company and Affiliated Companies thereof.  The Company further recognizes, acknowledges and agrees that any such conflicts of interest shall be resolved by SPH Services in its sole discretion.

 

  

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7.03.           For purposes of this Agreement, “Affiliated Companies” shall mean in respect of SPH Services any entity which is controlled by SPH Services, controls SPH Services or is under common control with SPH Services (other than the Company and any entity that is controlled by the Company) and in respect of the Company shall mean any entity which is controlled by the Company, controls the Company or is under common control with the Company (other than SPH Services and any entity that is controlled by SPH Services).

 

7.04.           The Company represents and warrants that all requisite approvals under the Company’s corporate governance documents necessary for the approval of this Agreement have been obtained.

 

Section 8.                      General

 

8.01.           This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior representations and agreements, whether oral or written, and cannot be modified, changed, waived or terminated except by a writing signed by both of the parties hereto.  No course of conduct or trade custom or usage shall in any way be used to explain, modify, amend or otherwise construe this Agreement.

 

8.02.           All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered, sent by nationally recognized overnight carrier, one day after being sent, or mailed by first class registered or certified mail, return receipt requested, five days after being sent.

 

8.03.           This Agreement shall be construed under the laws of the State of New York and the parties hereby submit to the personal jurisdiction of any federal or state court located therein, and agree that jurisdiction shall rest exclusively therein, without giving effect to the principles of conflict of laws.

 

8.04.           This Agreement may not be assigned by any party without the prior written consent of the other parties to this Agreement; provided, however, SPH Services may assign this Agreement to an affiliate.

 

8.05.           This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

 

8.06.           Sections 3.02, 4, 5 and 6 shall survive any expiration or termination of this Agreement.

 

  

5

  

 

8.07.           Except as specifically provided herein, none of the parties shall act or represent or hold itself out as having authority to act as an agent or partner of any other party, or in any way bind or commit any other party to any obligations.  Nothing contained in this Agreement shall be construed as creating a partnership, joint venture, agency, trust or other association of any kind, each party being individually responsible for its obligations set forth in this Agreement.  Except as otherwise provided herein, neither party shall be responsible for the compensation, the withholding of taxes, workers compensation, or any other employer liability for the employees and agents of the other party.  Without limiting the generality of the foregoing, the parties acknowledge and agree that SPH Services is an independent contractor and that neither SPH Services nor its employees are employees of the Company.  SPH Services or an Affiliated Company of SPH Services shall timely withhold and pay all taxes and file all reports required by applicable law to be withheld, paid and filed for their respective employees, including the persons providing services pursuant to Exhibit A.

 

The parties have duly executed this Agreement as of the date first above written.

 

	  	
SPH SERVICES, INC.

	  	  
	  	
By:

	

/s/ James F. McCabe Jr.

	  	  	
Name:

	
James F. McCabe Jr.

	  	  	
Title:

	
President

	  	  
	  	
HANDY & HARMAN LTD.

	  	  
	  	
By:

	

/s/ James F. McCabe Jr.

	  	  	
Name:

	
James F. McCabe Jr.

	  	  	
Title:

	
Chief Financial Officer

	  	  	  	  
	  	
HANDY & HARMAN GROUP LTD.

	  	  
	  	
By:

	

/s/ James F. McCabe Jr.

	  	  	
Name:

	
James F. McCabe Jr.

	  	  	
Title:

	
Senior Vice President

	  	  	  	  

 

  

6

  

 

EXHIBIT A

 

The “Services” shall include providing the non-exclusive services of a person or people to serve in the following position or functions, and perform duties normally associated with that specific or substantially equivalent position or function for the Company:

 

	
  

	
·

	
Accounting

 

	
  

	
·

	
Assistant Controller

 

	
  

	
·

	
Administration

 

	
  

	
·

	
Benefits

 

	
  

	
·

	
Business Development

 

	
  

	
·

	
Chief Accounting Officer

 

	
  

	
·

	
Chief Executive Officer

 

	
  

	
·

	
Chief Financial Officer

 

	
  

	
·

	
Chief Legal Officer

 

	
  

	
·

	
Compliance

 

	
  

	
·

	
Controller

 

	
  

	
·

	
Corporate Secretary

 

	
  

	
·

	
Environmental, Health and Safety

 

	
  

	
·

	
Finance

 

	
  

	
·

	
General Counsel

 

	
  

	
·

	
Human Resources

 

	
  

	
·

	
Internal Audit

 

	
  

	
·

	
Internal Auditor Director

 

	
  

	
·

	
Information Technology

 

	
  

	
·

	
Investment Management

 

	
  

	
·

	
Investor Relations

 

  

7

  

 

	
  

	
·

	
Legal

 

	
  

	
·

	
Marketing

 

	
  

	
·

	
Operating Group Management

 

	
  

	
·

	
Operational Excellence

 

	
  

	
·

	
Payroll

 

	
  

	
·

	
Pension Administration

 

	
  

	
·

	
Principal Executive Officer

 

	
  

	
·

	
Procurement

 

	
  

	
·

	
Public Relations

 

	
  

	
·

	
Risk

 

	
  

	
·

	
Tax

 

	
  

	
·

	
Treasurer

 

	
  

	
·

	
Treasury

 

The monthly fee for providing the Services shall be $879,244.50, paid in advance on the first day of the month.

 

  

8

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