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Exhibit 4.5
THIS SUBORDINATED PROMISSORY NOTE IS SUBORDINATE TO THE INDEBTEDNESS OF THE
CORPORATION (AND ANY OF ITS AFFILIATES AND SUCCESSORS) ARISING UNDER (I) THE
CREDIT AGREEMENT (THE "CREDIT AGREEMENT"), DATED AS OF OCTOBER 5, 2000, BETWEEN
THE CORPORATION AND BANK OF AMERICA N.A., AS AGENT (THE "AGENT"), AS HEREAFTER
AMENDED, RESTATED OR OTHERWISE MODIFIED, AS SET FORTH IN THE SUBORDINATION
AGREEMENT, DATED AS OF OCTOBER 4, 2000, BY SELLER AND THE CORPORATION IN FAVOR
OF THE AGENT AND THE LENDERS (AS THEREIN DEFINED), (II) THE INDENTURE (THE
"INDENTURE"), DATED AS OF OCTOBER 15, 1996, BETWEEN THE CORPORATION AND CHASE
MANHATTAN BANK, AS TRUSTEE (THE "TRUSTEE"), AS HEREAFTER AMENDED, RESTATED OR
OTHERWISE MODIFIED, AS SET FORTH IN THE SUBORDINATION AGREEMENT, DATED AS OF
OCTOBER 4, 2000, BY SELLER AND THE CORPORATION IN FAVOR OF THE TRUSTEE, (III)
ANY OTHER INDEBTEDNESS OF THE CORPORATION UP TO AN AGGREGATE OF $5.0 MILLION,
(IV) ANY ADDITIONAL INDEBTEDNESS OF THE CORPORATION INCURRED IN CONNECTION WITH
THE CERAMIC FIBER BUSINESS OR ANY RELATED OR SUBSTANTIALLY SIMILAR LINES OF
BUSINESS, AND (V) ANY OTHER INDEBTEDNESS OF THE CORPORATION INCURRED FROM TIME
TO TIME HEREAFTER TO REPAY, REFINANCE OR OTHERWISE REPLACE THE INDEBTEDNESS
IDENTIFIED IN CLAUSES (I) THROUGH (IV) ABOVE (THE INDEBTEDNESS SET FORTH IN
CLAUSES (I) THROUGH (V) ABOVE IS HEREINAFTER REFERRED TO AS "SENIOR
INDEBTEDNESS") AND THE SUBORDINATION AGREEMENTS SET FORTH IN CLAUSES (I) AND
(II) ABOVE ARE HEREINAFTER REFERRED TO AS THE SUBORDINATION AGREEMENTS".
SUBORDINATED PROMISSORY NOTE
$1,500,000 October 4, 2000
FOR VALUE RECEIVED, the undersigned, Unifrax Corporation, a Delaware
corporation (the "CORPORATION"), hereby promises to pay to Societe Europeenne de
Produits Refractaires, as agent for Unifrax Ltd. (the "PAYEE"), at "Les Miroirs"
18, Avenue d'Alsace, 92096 LA DEFENSE CEDEX, FRANCE, or at such other place as
the Payee may from time to time designate in writing, in lawful money of the
United States of America an aggregate amount equal to ONE MILLION FIVE HUNDRED
THOUSAND U.S. DOLLARS ($1,500,000) on the terms set forth below (this "NOTE").
1. INTEREST RATE. This Note will bear, subject to Section 2(b) below,
simple interest on the outstanding principal at an annual rate of (a) 7% from
the date of this Note until December 5, 2000, and (b) 10.5% from December 6,
2000 until December 31, 2001, (c) 12.75% from January 1, 2002 until December 31,
2002, and (d) 15% from January 1, 2003 until June 30, 2004.
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2. PAYMENT.
(a) Subject to Section 2(b) and Section 4 of this Note or
acceleration as provided herein, interest is due and payable on
January 31, 2001, January 31, 2002, January 31, 2003 and June 30,
2004 (each an "INTEREST PAYMENT DATE") based on an actual/365 day
year and the actual days the principal amount hereof is
outstanding. Interest on the principal amount of the Note will
accrue beginning on the date of issuance and will continue to
accrue for so long as any principal amount of the Note is
outstanding.
(b) In the event that the Corporation does not make an interest
payment on any Interest Payment Date as a consequence of any
provision of any agreements or instruments representing or
evidencing any Senior Indebtedness, the Corporation will not be
required on any Interest Payment Date to make a cash interest
payment hereunder, such non-payment will not constitute an Event
of Default (defined below) hereunder and all of such installment
(or the unpaid portion thereof) shall be added to the principal
under this Note.
(c) The entire unpaid principal amount of this Note and any
accrued and unpaid interest due hereon shall become due and
payable on the earlier of (i) June 30, 2004, or (ii) the second
Business Day after the lenders party to the Credit Agreement make
available to Unifrax Ltd., a subsidiary of the Corporation
("UNIFRAX LTD."), a loan pursuant to the Credit Agreement (the
"U.K. LOAN") utilizing as collateral that certain real estate
located in Rainford, England (the "U.K. PROPERTY") owned by
Unifrax Ltd.; provided, however, that (a) in the case of this
clause (ii), the amount so due and payable shall be limited to the
dollar equivalent of the amount of such loan proceeds actually
received by Unifrax Ltd. pursuant to such U.K. Loan; and (b) in no
event shall the amount so due and payable exceed an amount in
excess of the then unpaid principal amount of this Note and any
accrued and unpaid interest due hereon.
(d) Whenever any payment to be made under this Note is stated to
be due on Saturday, Sunday or a legal holiday or the equivalent
for banks generally under the laws of the State of New York (any
other day being a "BUSINESS DAY"), such payment may be made on the
next succeeding Business Day.
3. PREPAYMENT. This Note may be prepaid by the Corporation in whole or
in part at any time without premium or penalty. Any such prepayment shall be
first applied to the payment of accrued but unpaid interest on the principal
amount to be prepaid and then to principal.
4. SET-OFF. The Corporation has the right to offset against any payment
of interest or principal due and payable (whether by scheduled amortization or
prepayment) from the Corporation to the Payee under this Note any amounts owing
from the Payee or any Affiliate (as hereinafter defined) to Holdings or the
Corporation under any of the Transaction Documents (as defined in that certain
Stock and Asset Purchase Agreement ("SAPA") by and among Payee, the Corporation
and certain other parties thereto, dated as of July 27, 2000) and any such
offset shall not constitute an Event of Default. In the event of any such
offset, the amount of such offset shall be allocated pro rata among (a) this
Note; (b) that certain Subordinated Promissory Note,
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dated October 4, 2000, issued by the Corporation in favor of Payee in the
initial principal amount of $8,000,000 (the "CORPORATION NOTE"); (c) that
certain Limited Recourse Promissory Note, dated October 4, 2000, issued by
Unifrax Holding Co. ("HOLDINGS") in favor of Payee in the initial principal
amount of $20,200,000; (d) that certain Limited Recourse Promissory Note, dated
October 4, 2000, issued by Holdings in favor of Carborundum do Brasil in the
initial principal amount of $300,000; and (e) any Guaranty Agreement or Guaranty
Agreements (each as defined in the Corporation Note) in effect at that time.
5. DEFAULT; ACCELERATION. In the case an Event of Default occurs and is
continuing, the entire unpaid principal of this Note, together with all accrued
but unpaid interest, will become immediately due and payable at the Payee's
option. An "EVENT OF DEFAULT" means (a) the failure of the Corporation to make
any payment of interest or principal within fifteen days of the date such
payment is due, other than (i) as provided in Section 2(b) hereof and (ii) in
accordance with the Corporation's right to offset against this Note as further
described in Section 4 above, or (b) the Corporation's filing a petition or
otherwise voluntarily commencing a case or proceeding or filing an answer or
other pleading in any proceeding seeking relief under any federal or state
bankruptcy, insolvency or debtors' reorganization law, being the voluntary or
involuntary subject of an order for relief by any court under any such law, or
being adjudicated "bankrupt," "debtor" or "insolvent" under any such law, or
there being appointed under any such law, a "trustee," "receiver" or "custodian"
to manage the Corporation's business or properties, or there being commenced
under any such law a case or proceeding proposing such an order for relief,
adjudication or appointment with respect to the Corporation or the Corporation's
business, which proceeding is consented to by the Corporation or that is not
dismissed within 90 days after being commenced. In addition, the entire unpaid
principal of this Note, together with all accrued but unpaid interest, shall
become immediately due and payable on the third Business Day following a
Change-in-Control (as defined below).
6. U.K. PROPERTY. Payee and the Corporation hereby agree to comply with
the provisions of Section 2.5.2 of the Amendment to the SAPA dated the date
hereof.
7. NO RECOURSE. No director, stockholder, officer, employee or
incorporator as such, past, present or future of the Corporation or any
successor person has any liability for any obligation of the Corporation under
this Note or for any claim based on, in respect of or by reason of, any such
obligation or its creation. The Payee by accepting this Note waives and releases
all such liability. This waiver and release are part of the consideration for
the issue of this Note.
8. COSTS. In the event that any principal or interest due hereunder is
not paid in accordance with this Note, the Corporation shall pay any and all
reasonable costs incurred by Payee to collect the sums due hereunder, including,
but not limited to, reasonable attorneys' fees and disbursements.
9. LATE PENALTY. Except as otherwise provided in Section 2(b) and
Section 4 of this Note, any payment of interest that is required to be made
hereunder that is not made within fifteen days of the date specified for payment
or otherwise in accordance with this Note shall bear a late fee equal to five
percent (5%) of the amount of the payment then due.
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10. NO WITHHOLDING. Any payments or prepayments to be made in respect
of interest on this Note shall be made without deduction or withholding, or with
such additional amounts as may be necessary in order that Payee, after such
deduction or withholding, receives the full amount of interest then due and
payable or intended to be prepaid.
11. WAIVER OF DEFENSES. Subject to Section 4 of this Note, the
Corporation hereby waives presentment for payment, protest and demand,
suretyship defenses and all other defenses in the nature thereof and notice of
non-payment, changes in terms and conditions and all other indulgences granted
by Payee.
12. NO IMPLIED WAIVER. Payee shall not, by any act, delay, omission or
otherwise, be deemed to waive any of its rights or remedies hereunder, unless
such waiver be in writing and signed by Payee and the Corporation, and then only
to the extent expressly set forth therein. A waiver on any such occasion shall
not be construed as a bar to, or waiver of, any such right or remedy on any
future occasion.
13. SUBORDINATION. This Note is subordinate to the indebtedness of the
Corporation (or any of its affiliates and successors) arising under any
agreements or instruments representing or evidencing any Senior Indebtedness.
With respect to the indebtedness identified in clauses (III)-(V) of the legend
set forth above, Payee shall, upon the request of the Corporation, enter into
subordination agreements in form and substance substantially similar to the
Subordination Agreements.
14. GOVERNING LAW; INTERPRETATION. This Note is to be governed and
controlled as to interpretation, enforcement, validity, construction, and in all
other respects by the laws, statutes and decisions of the State of New York.
15. INVALIDITY. If any one or more of the provisions contained in this
Note are invalid, illegal or unenforceable in any respect, the validity,
legality or enforceability of all the remaining provisions will not in any way
be affected or impaired.
16. ASSIGNMENT. The Payee shall not assign, negotiate or otherwise
transfer this Note or any or all of its rights under this Note to any Person
without the prior written consent of the Corporation, except to an Affiliate of
Payee. This Note may not be assigned, transferred or pledged, in whole or in
part, by the Corporation without the prior written consent of Payee.
17. CERTAIN DEFINITIONS. As used in this Note, (a) "AFFILIATE" of any
Person means any Person directly or indirectly controlling, controlled by, or
under common control with, any such Person and any officer, director or
controlling Person of such Person, (b) "PERSON" means any individual,
corporation, partnership, limited liability company, joint venture, trust,
governmental authority, unincorporated association or any other entity or
organization, and (c) "CHANGE-IN-CONTROL" means the acquisition by a Person
(other than Kirtland Capital Partners II LP or any Affiliate thereof) of (i) the
ownership or control (directly or indirectly) of more than 50% of the voting
share capital of Holdings or the Corporation or (ii) the right to appoint or
remove directors having a majority of the voting rights exercisable at meetings
of the boards of directors of Holdings or the Corporation.
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IN WITNESS WHEREOF, The Corporation has caused this Note to be duly
executed as of the date first above written.
UNIFRAX CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: President and CEO
ACKNOWLEDGED AND AGREED
to this ____ day of October, 2000
SOCIETE EUROPEENNE DE PRODUITS REFRACTAIRES
By: /s/ X. Xxxxxx
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Name: X. Xxxxxx
Title: Senior Vice President Finance
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