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Item 1.01.
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Entry into a Material Definitive Agreement.
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On December 29, 2021, SPH
Group Holdings LLC, Steel Excel Inc. and IGo, Inc. (collectively, the “Borrowers”), each an indirect wholly-owned subsidiary
of Steel Partners Holdings L.P. (the “Company”), amended and restated its Prior Credit Agreement (as defined below) with an
amended and restated credit agreement (the “New Credit Agreement”), with PNC Bank, National Association, in its capacity as
administrative agent, the Lenders party thereto, and certain of the Borrowers’ affiliates in their capacities as guarantors (the
“Guarantors” and, together with the Borrowers, the “Loan Parties”). Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the New Credit Agreement.
The New Credit Agreement provides
for a senior secured revolving credit facility in an aggregate principal amount not to exceed $600,000,000 (the “Revolving Credit
Loans”), which includes a $50,000,000 subfacility for swing line loans, a $50,000,000 subfacility for standby letters of credit
and a currency sublimit (available in euros and pounds sterling) equal to the lesser of $75,000,000 and the total amount of the Revolving
Credit Commitment.
The proceeds of the Revolving
Credit Loans under the New Credit Agreement shall be used (i) to refinance existing indebtedness, (ii) for the payment of fees and expenses
in connection with the refinancing transaction, and (iii) for general corporate purposes, certain permitted investments, working capital,
letters of credit, capital expenditures and permitted acquisitions. The New Credit Agreement also permits the Borrowers, under certain
circumstances, to increase the aggregate principal amount of revolving credit commitments under the New Credit Agreement by $300,000,000 plus additional amounts so long as the Leverage Ratio would not exceed 3.50:1.
The New Credit Agreement has
a five-year term. Borrowings under the New Credit Agreement are collateralized by substantially all the assets of the Borrowers and the
Guarantors and a pledge of all of the issued and outstanding shares of capital stock of each Loan Party’s subsidiaries, and are
fully guaranteed by the Guarantors. Borrowings bear interest, at the Borrowers’ option, at annual rates of either the
SOFR Rate or the Term RFR, plus an applicable margin, as set forth in the New Credit Agreement.
The New Credit Agreement also
contains financial covenants, including (i) a Leverage Ratio not to exceed 4.25 to 1.00 for quarterly periods as of the end of each fiscal
quarter; provided, however, that notwithstanding the foregoing, following a Material Acquisition, Borrowers shall not permit the Leverage
Ratio, calculated as of the end of each of the four (4) fiscal quarters immediately following such Material Acquisition (which, for the
avoidance of doubt, shall commence with the fiscal quarter in which such Material Acquisition is consummated), to exceed 4.50 to 1.00
and (ii) an Interest Coverage Ratio, calculated as of the end of each fiscal quarter, not less than 3.00 to 1.00. The New Credit
Agreement also contains standard representations, warranties and covenants for a transaction of this nature, including, among other things,
covenants relating to (i) financial reporting and notification, (ii) payment of obligations, (iii) compliance with law,
(iv) maintenance of insurance and (v) maintenance of properties.
The above description of the
New Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the New Credit
Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
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Item 1.02.
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Termination of a Material Definitive Agreement.
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The New Credit Agreement
amends and restates in its entirety that certain Credit Agreement, dated as of November 14, 2017,
among Handy, SPH Group Holdings LLC, Steel Excel Inc., API Americas Inc. and Cedar 2015 Limited as borrowers (the “Prior Borrowers”),
PNC Bank, National Association, in its capacity as administrative agent, the lenders party thereto, and certain of the Prior Borrowers’
affiliates in their capacities as guarantors.
The Prior Credit Agreement provided for a
revolving credit facility in an aggregate principal amount not to exceed $500,000,000 and a $200,000,000 Term Loan which amortized
5% per year. The revolving credit facility included a $55,000,000 subfacility for swing line loans and a $50,000,000 subfacility for
standby letters of credit. The Prior Credit Agreement also contained standard representations, warranties and covenants for a
transaction of such nature, including, among other things, covenants relating to (i) financial reporting and notification, (ii)
payment of obligations, (iii) compliance with law, (iv) maintenance of insurance and (v) maintenance of properties.