Stock Purchase Agreement between WHX CS Corp. and Steel Partners II, L.P. (Series A Preferred Stock)

 EXHIBIT 10.1 STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT, dated as of October 26, 2005, by and between WHX CS Corp., a Delaware Corporation (the "Company") and Steel Partners II, L.P., a Delaware limited partnership ("Purchaser"). NOW, THEREFORE, the parties hereto hereby agree as follows: Section 1. PURCHASE AND SALE OF PREFERRED STOCK. 1.1. ISSUANCE AND SALE OF SHARES. At the Closing, upon the terms and subject to the conditions contained in this Agreement, the Company shall issue and sell to Purchaser and Purchaser shall purchase from the Company all right, title and interest in and to 1,000 shares (the "Shares") of Series A Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock") for a purchase price of $5,100 per share for an aggregate purchase price of $5.1 million (the "Purchase Price"). 1.2. CLOSING. The closing of the sale and purchase of the Shares shall take place simultaneously with the execution and delivery of this Agreement at the offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP at Park Avenue Tower, 65 East 55th Street, New York, New York 10022, on October 25, 2005, or at such other time and place as Purchaser and the Company shall mutually agree (the "Closing"). 1.3. DELIVERIES AT THE CLOSING. At the Closing, Purchaser shall deliver the Purchase Price to the Company by wire transfer to such account as the Company shall designate to Purchaser prior to the Closing. At the Closing, the Company shall deliver the certificates evidencing the Shares in the name of the Purchaser (the "WHX CS Certificates"). Section 2. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents and warrants to the Company as follows: 2.1. AUTHORIZATION. Purchaser has all requisite corporate power and authority to execute, deliver and perform this Agreement and the transactions contemplated hereby, and the execution, delivery and performance by Purchaser of this Agreement has been duly authorized by all requisite action by Purchaser and this Agreement, when executed and delivered by Purchaser, constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). 2.2. INVESTMENT REPRESENTATIONS. Purchaser hereby represents and warrants to the Company as follows:  (a) INVESTMENT. The Shares to be acquired by Purchaser will be acquired for investment for Purchaser's own account, not as a nominee or agent, and not with a view to the resale or distribution thereof. (b) ACCREDITED INVESTOR. Purchaser is an "Accredited Investor" as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act"). Purchaser is able to bear the economic risk of the purchase of the Shares pursuant to the terms of this Agreement, including a complete loss of Purchaser's investment in the Shares. (c) RESTRICTED SHARES. Purchaser understands and agrees that, when acquired by Purchaser pursuant to this Agreement, the Shares will be restricted within the meaning of the Securities Act, and may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom. (d) NO REPRESENTATION. Purchaser confirms that neither the Company nor any agent or affiliate of the Company has made any representation or warranty to Purchaser about the Company or the Shares other than those set forth in this Agreement, and that Purchaser has not relied upon any other representation or warranty, express or implied, in purchasing the Shares. (e) FINANCIAL EXPERIENCE. The Purchaser represents that by reason of Purchaser's business or financial experience or the business or financial experience of Purchaser's professional advisors who are unaffiliated with and who are not compensated by either the Company or any affiliate or selling agent of the Company, directly or indirectly, Purchaser has the capacity to protect Purchaser's own interests in connection with the transactions contemplated by this Agreement. (f) LEGEND. Purchaser understands and agrees that the certificate evidencing the Shares shall be endorsed with the following legend: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933." (g) ACKNOWLEDGMENT. Purchaser understands that the foregoing representations and warranties are to be relied upon by the Company as a basis for exemption of the sale of the Shares under the Securities Act and under the securities laws of all applicable states and for other purposes. Purchaser warrants that the information provided to the Company is true and correct as of the date hereof, and Purchaser agrees to advise the Company, prior to the execution of this Agreement, of any material change in any such information. 2  Section 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to Purchaser with respect to itself and its Shares as follows: 3.1. ORGANIZATION, GOOD STANDING, CORPORATE POWER AND QUALIFICATION. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite power and authority to carry on its business as previously and presently conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business, assets, liabilities, financial condition, property or results of operations of the Company 3.2. CAPITALIZATION. The authorized capital of the Company on the date hereof consists of 5,000 shares divided as follows: (a) 4,000 shares of common stock, par value $0.01 per share (the "Common Stock"), 1,000 shares of which are issued and outstanding. All of the outstanding shares of Common Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws. The Company holds no treasury stock; and (b) 1,000 shares of Series A Preferred Stock, par value $0.01 per share, of which no shares are issued or outstanding prior to the Closing. There are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal or similar rights) or agreements, orally or in writing, to purchase or acquire from the Company, or to the Company's knowledge, from any third party any shares of Common Stock or Series A Preferred Stock, or any securities convertible into or exchangeable for shares of Common Stock or Series A Preferred Stock. 3.3. SUBSIDIARIES. The Company is a wholly-owned subsidiary of WHX Corporation, a Delaware Corporation and does not currently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability company, association, or other business entity. The Company is not a participant in any joint venture, partnership or similar arrangement. 3.4. AUTHORIZATION. All corporate action required to be taken by the Company's Board of Directors and stockholders in order to authorize the Company to enter into this Agreement, and to issue the Shares as contemplated hereunder has been taken. All action on the part of the officers of the Company necessary for the execution and delivery of this Agreement, the performance of all obligations of the Company hereunder, and the issuance and delivery of the Shares has been taken or will be taken prior to the Closing. This Agreement, when executed and delivered by the Company, shall constitute a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general 3  application relating to or affecting the enforcement of creditors rights generally or (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. 3.5. VALID ISSUANCE OF SHARES. The Shares, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, applicable state and federal securities laws and liens or encumbrances created by or imposed by a Purchaser. Assuming the accuracy of the representations of the Purchasers in SECTION 2 of this Agreement, the Shares will be issued in compliance with all applicable federal and state securities laws. 3.6. COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation, breach or default of any term of the Company's Certificate of Incorporation, as amended (including the Certificate of Designations for the Series A Preferred Stock) (the "Certificate") or the Company's bylaws (the "Bylaws") or in any material respect of any term or provision of any material mortgage, indenture, contract, agreement or instrument to which the Company is a party or by which it may be bound, (the "Company Contracts") or of any provision of any foreign or domestic state or federal judgment, decree, order, statute, rule or regulation applicable to or binding upon the Company. The execution, delivery and performance of and compliance with this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation, breach or default, or be in conflict with or constitute, with or without the passage of time or the giving of notice or both, either a default under the Certificate, Bylaws, or any Company Contract. Section 4. INDEMNIFICATION. (a) The Company agrees to indemnify and hold harmless Purchaser (and its officers, employees, partners, agents, affiliates and controlling parties) from and against any and all losses, liabilities, damages, claims, suits, actions, judgments or causes of action, assessments, costs and expenses, including without limitation interest, penalties, reasonable attorneys' fees, any and all reasonable expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation, asserted against, resulting to, imposed upon, or incurred or suffered by Purchaser, directly as a result of third party claims resulting or arising from any inaccuracy in or breach or nonfulfillment of or any alleged inaccuracy in or breach or nonfulfillment of any of the representations, warranties, covenants or agreements made by the Company in this Agreement, provided, however, that the indemnity agreement contained in this SUBSECTION 4(A) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld, conditioned or delayed). (b) Purchaser agrees to indemnify and hold harmless the Company (and its officers, employees, partners, agents, affiliates and controlling parties) from and against any and all losses, liabilities, damages, claims, suits, actions, judgments or causes of action, assessments, costs and expenses, including without limitation interest, penalties, reasonable attorneys' fees, 4  any and all reasonable expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation, asserted against, resulting to, imposed upon, or incurred or suffered by such the Company directly as a result of third party claims resulting or arising from any inaccuracy in or breach or nonfulfillment of or any alleged inaccuracy in or breach or nonfulfillment of any of the representations, warranties, covenants or agreements made by the Purchaser in this Agreement. Section 5. BROKERS AND FINDERS. No party hereto shall be obligated to pay any commission, brokerage fee or finder's fee based on any alleged agreement or understanding between any such party and a third person in respect of the transactions contemplated hereby. Each party hereto hereby agrees to indemnify the other against any claim by any third person for any commission, brokerage or finder's fee or other payment with respect to this Agreement or the transactions contemplated hereby based on any alleged agreement or understanding between such party and such third person, whether express or implied from the actions of such party. Section 6. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. Section 7. ENTIRE AGREEMENT. This Agreement, including any and all exhibits and schedules hereto, contains the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings among the parties with respect thereto. Section 8. NOTICES. All notices, demands and requests of any kind to be delivered to any party in connection with this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered or if sent by internationally-recognized overnight courier or by registered or certified mail, return receipt requested and postage prepaid, addressed as follows: (a) if to Purchaser, to: Warren Lichtenstein c/o Steel Partners II, L.P. 590 Madison Avenue, 32nd Floor New York, NY 10022 with a copy to: Littman Krooks LLP 655 3rd Avenue, 20th Floor 5  New York, NY 10017 Telecopier: (212) 490-2990 Attention: Mitchell C. Littman, Esq. (b) if to the Company, to: WHX CS Corporation 555 Theodore Fremd Ave Rye, New York 10580 Telecopier: (914) 925-4498 Attention: Robert Hynes with a copy to: Olshan Grundman Frome Rosenzweig & Wolosky LLP 65 East 55th Street New York, NY 10022 Telecopier: (212) 451-2222 Attention: Steven Wolosky, Esq. or to such other address as the party to whom notice is to be given may have furnished to the other parties to this Agreement in writing in accordance with the provisions of this Section. Any such notice or communication shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of nationally-recognized overnight courier, on the next business day after the date when sent and (iii) in the case of mailing, on the third business day following that on which the piece of mail containing such communication is posted. Section 9. AMENDMENTS. This Agreement may not be modified or amended, or any of the provisions of this Agreement waived, except by written agreement of all parties hereto. Section 10. GOVERNING LAW; WAIVER OF JURY TRIAL. (a) All questions concerning the construction, interpretation and validity of this Agreement shall be governed by and construed and enforced in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether in the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. In furtherance of the foregoing, the internal law of the State of New York will control the interpretation and construction of this Agreement, even if under such jurisdiction's choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily or necessarily apply. (b) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND 6  EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO. Section 11. SUBMISSION TO JURISDICTION. Any legal action or proceeding with respect to this Agreement may be brought in the courts of the State of New York and the United States of America located in the City of New York, New York and, by execution and delivery of this Agreement, the parties hereby accept for themselves and in respect of their properties, generally and unconditionally, the jurisdiction of the aforesaid courts. The parties hereby irrevocably waive, in connection with any such action or proceeding, any objection, including, without limitation, any objection to the venue or based on the grounds of forum non conveniens, which they may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions. The parties hereby irrevocably consent to the service of process of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to them at the address set forth herein. Section 12. SEVERABILITY. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the law and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, in the event that any provision of this Agreement would be held in any jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Section 13. COUNTERPARTS. This Agreement may be executed in any number of counterparts, and each such counterpart of this Agreement shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Facsimile counterpart signatures to this Agreement shall be acceptable and binding. 7  Section 14. HEADINGS. The section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Section 15. EXPENSES. Each party hereto shall pay its own expenses incurred in the preparation, negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby and thereby, including without limitation expenses for legal and accounting services. Section 16. SURVIVAL. The warranties, representations, and covenants of the Company and Purchaser contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of Purchaser or the Company. Section 17. FURTHER ASSURANCES. From and after the date of this Agreement, the Purchaser and the Company agree to execute and deliver any additional documents, instrument and other writings as may be reasonably necessary to effect the transfer of the Shares to the Purchaser, including any documents required by the Company's transfer agent or counsel. Section 18. PREPARATION OF AGREEMENT. Each party to this Agreement acknowledges that: (i) the party had the advice of, or sufficient opportunity to obtain the advice of, legal counsel separate and independent of legal counsel for any other party hereto; (ii) the terms of the transactions contemplated by this Agreement are fair and reasonable to such party; and (iii) such party has voluntarily entered into the transactions contemplated by this Agreement without duress or coercion. Each party further acknowledges that such party was not represented by the legal counsel of any other party hereto in connection with the transactions contemplated by this Agreement, nor was he or it under any belief or understanding that such legal counsel was representing his or its interests. Each party agrees that no conflict, omission or ambiguity in this Agreement, or the interpretation thereof, shall be presumed, implied or otherwise construed against any other party to this Agreement on the basis that such party was responsible for drafting this Agreement. * * * * *  IN WITNESS WHEREOF, each of the undersigned has duly executed this Stock Purchase Agreement as of the date first written above. STEEL PARTNERS II, L.P. By: Steel Partners, L.L.C. General Partner By: /s/ ----------------------------------- Name: Title: WHX CS CORP. By: /s/ ----------------------------------- Name: Title: