DEBT SUBORDINATION AGREEMENT
This Agreement is entered into as of December 29, 1999, by Societe
Industrielle de Materiaux Avances, a societe anonyme organized under the laws of
the Republic of France (the "Subordinated Lender") and Special Metals
Corporation, a Delaware corporation (the "Company"), for the benefit of (i)
Credit Lyonnais New York Branch ("Credit Lyonnais"), (ii) the Lenders from time
to time party to the Credit Lyonnais Credit Agreement described below and each
party (other than the Company) to each other Senior Credit Facility described
below (collectively, including Credit Lyonnais and such Lenders, the "Senior
Lenders") and (iii) each other present and future holder of Senior Claims (as
defined herein) from time to time outstanding.
Recitals
A. The Company and the Subordinated Lender have entered into a
Subordinated Loan Agreement, dated as of December 17, 1999 (as in effect on the
date hereof and from time to time amended with the prior written consent of the
Required Senior Lenders, the "Subordinated Credit Agreement"), relating to
subordinated unsecured revolving and term credit facilities of up to
$50,000,000.
B. The Company, the Lenders party thereto and Credit Lyonnais, as Agent,
are parties to a Senior Secured Credit Agreement, dated as of October 28, 1998,
as amended by First Amendment to Credit Agreement and Limited Waiver, dated as
of March 31, 1999, Second Amendment to Credit Agreement, dated as of June 8,
1999, and Third Amendment to Credit Agreement and Limited Waiver, dated as of
December 29, 1999 (together with the Loan Documents (as defined therein)
thereunder and all other instruments and agreements at any time entered into
between the Company or any Subsidiary pursuant thereto or in connection
therewith, as the same may be modified, supplemented, extended, renewed,
replaced or otherwise changed from time to time by agreement of the signatory
parties thereto, the "Credit Lyonnais Credit Agreement").
C. To induce the Senior Lenders to consent to the Borrower's entering
into the Subordinated Credit Agreement, the Company and the Subordinated Lender
have agreed to enter into this Agreement.
Now Therefore, in consideration of the premises and in consideration of
the execution and delivery of the Third Amendment to Credit Agreement and
Limited Waiver, dated as of December 29, 1999, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Subordinated Lender, for themselves and for each other present
and future holder of any Subordinated Claim, hereby agree
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for the direct and legally enforceable benefit of Credit Lyonnais, each other
Senior Lender and each other present and future holder of any Senior Claim as
follows:
Section 1. Definitions. As used herein, the following terms (whether in
singular or plural usage) shall have the following meanings:
"Bankruptcy Code" means Title 11 of the United States Code.
"Bankruptcy, Insolvency or Liquidation Proceeding" means (a) any case
commenced by or against the Company or any Subsidiary under any chapter of the
Bankruptcy Code, any other proceeding for the reorganization, recapitalization
or adjustment or marshalling of the assets or liabilities of the Company or any
Subsidiary, any receivership or assignment for the benefit of creditors relating
to the Company or any Subsidiary or any similar case or proceeding relative to
the Company or any Subsidiary or the creditors of any of them, as such, in each
case whether or not voluntary, (b) any liquidation, dissolution, marshalling of
assets or liabilities or other winding up of or relating to the Company or any
Subsidiary, in each case whether or not voluntary and whether or not involving
bankruptcy or insolvency, or (c) any other proceeding of any type or nature in
which Claims against the Company or any Subsidiary are determined, proven or
paid.
"Claim" is used as defined in the Bankruptcy Code, whether or not, in
the context in which it appears, a case under the Bankruptcy Code is pending.
"Company" is defined in the preamble to this Agreement.
"Credit Lyonnais" is defined in the preamble to this Agreement.
"Credit Lyonnais Credit Agreement" is defined in paragraph B of the
Recitals.
"Discharge of the Credit Lyonnais Financing" means that all commitments
for any extension of credit or incurrence of indebtedness under the Credit
Lyonnais Credit Agreement have been terminated, all letters of credit at any
time issued, guaranteed or provided under the Credit Lyonnais Credit Agreement
have expired or been discharged and all reimbursement obligations in respect
thereof and all loans and advances made and other credit extended and
indebtedness incurred under the Credit Lyonnais Credit Agreement have been paid
in full in cash and all other indebtedness and obligations for principal,
interest, prepayment premium, fees, taxes, expense reimbursements, indemnities
and other amounts outstanding under the Credit Lyonnais Credit Agreement and all
other Senior Claims at any time outstanding under or in respect of the Credit
Lyonnais Credit Agreement (except indemnification obligations which are then
contingent and as to which no payment is then due and no claim or demand has
then been made) have been paid in full and in cash.
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"holder" includes, in respect of any Claim, each person or entity which owns, is
entitled to enforce, is entitled to the benefit of or otherwise holds or owns
such Claim and includes all persons and entities at any time receiving any
transfer of any interest in any Claim or otherwise succeeding to any interest in
any Claim.
"including" is used illustratively, and not exhaustively or by way of
limitation, and means "including but not limited to."
"Post-Petition Interest/Expense Claims" means any Claim for interest on
any Senior Claim accrued or computed for or as to any period of time at any time
after the commencement of any Bankruptcy, Insolvency or Liquidation Proceeding
at the rate (including any applicable post-default rate) set forth in or
applicable under any instrument or agreement evidencing or governing any Senior
Claim or for fees, expense reimbursements, indemnification or other similar
obligations accrued or determined for or as to any such period of time in
accordance with the provisions of such instrument or agreement, whether or not
such Claim is allowed, allowable or enforceable in such Bankruptcy, Insolvency
or Liquidation Proceeding and even if such Claim is not allowed or enforced
therein.
"Required Senior Lenders" means, at any time as to any act relating to
any Senior Credit Facility then in effect, such number of the holders of Senior
Claims for loans and other extensions of credit or indebtedness outstanding or
committed under such Senior Credit Facility as may, under the terms of the
agreement governing such Senior Credit Facility, have the power to bind all such
holders in respect of such act.
"Senior Agent" means Credit Lyonnais or any successor to Credit Lyonnais
as Agent under the Credit Lyonnais Credit Agreement, until Discharge of the
Credit Lyonnais Financing, and thereafter means any Senior Lender acting as
Agent under any Senior Credit Facility or, if there is no Agent so acting, the
Required Senior Lenders under such Senior Credit Facility.
"Senior Claim Collateral" means any and all of the property of every
type and description, whether real, personal or mixed, whether tangible or
intangible, and whether now owned or hereafter acquired by the Company or any
Subsidiary, upon which any security interest or lien is granted as security for
any Senior Claim.
"Senior Claims" means (a) all present and future Claims against the
Company or any Subsidiary on account or in respect of the principal of and
interest and prepayment premium (if any) on any and all loans and letter of
credit liabilities and other extensions of credit or indebtedness at any time
incurred under any Senior Credit Facility, including any guaranty thereof, (b)
all present and future Claims at any time arising or secured, or purported to be
secured, under
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any instrument, conveyance or agreement delivered by the Company or any
Subsidiary governing, securing or relating in any respect to any Senior Credit
Facility, and (c) all present and future Claims in any manner based thereon,
arising therefrom or related thereto, in each case whether now outstanding or at
any time hereafter arising, and specifically includes (without limitation) all
Claims for fees, taxes, expense reimbursements, indemnities and other amounts
payable by the Company or any Subsidiary under the Credit Lyonnais Credit
Agreement or any other such instrument, conveyance or agreement and all
Post-Petition Interest/Expense Claims in any Bankruptcy, Insolvency or
Liquidation Proceeding.
"Senior Credit Facility" means (a) all loans, letter of credit
liabilities and other extensions of credit and indebtedness from time to time
outstanding or committed to be made available under the Credit Lyonnais Credit
Agreement, whether or not in any respect subordinated to any other loans,
extensions of credit or indebtedness, and (b) after Discharge of the Credit
Lyonnais Financing, in each case if and to the extent the Company agrees in
writing that the same shall be a Senior Credit Facility for the purposes of this
Agreement, (i) all loans, letter of credit liabilities or other extensions of
credit or indebtedness at any time incurred by or committed to be made available
to the Company or any Subsidiary for the purpose of repaying, retiring,
refinancing or replacing the Credit Lyonnais Credit Agreement and (ii) all other
indebtedness at any time incurred by or committed to the Company or any
Subsidiary for money borrower or credit extended or under any note or other debt
security.
"Senior Credit Facility Default" means (a) the failure to pay when due
any payment on any Senior Claim or (b) any event that does or, with the giving
of any notice or the lapse of any period of time (or both), would constitute a
Default or an Event of Default under (and as defined in) any Senior Credit
Facility.
"Senior Lenders" is defined in the preamble to this Agreement.
"SIMA Letter of Credit" means one or more standby letter(s) of credit
issued in the aggregate face amount of $30,000,000 and delivered to the Senior
Agent on or prior to the date hereof, in form and substance satisfactory to the
Senior Agent and the Required Senior Lenders under the Credit Lyonnais Credit
Agreement.
"Subordinated Claims" means (a) all present and future Claims against
the Company or any Subsidiary on account or in respect of the principal of and
interest and prepayment premium (if any) on the Subordinated Loans and any and
all other extensions of credit or indebtedness at any time incurred or arising
under the Subordinated Credit Agreement, (b) any and all Claims arising under
any of the Subordinated Loan Documents, and (c) any and all Claims in any manner
based thereon, arising therefrom or related thereto, in each case whether now
outstanding or at any time hereafter arising and whether based on contract or
quasi-contract or founded in tort or arising by law or otherwise, and
specifically includes (without limitation) all
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Claims against the Company or any Subsidiary for fees, taxes, expense
reimbursements, indemnities and other amounts, obligations or liabilities under
the Subordinated Loan Documents.
"Subordinated Credit Agreement" is defined in paragraph A of the
Recitals.
"Subordinated Lender" is defined in the preamble to this Agreement.
"Subordinated Loan Documents" means the Subordinated Credit Agreement,
the Subordinated Notes and all other instruments and agreements of every type
and description at any time delivered by the Company or any Subsidiary
evidencing, governing, securing, assuring, or otherwise relating to the
Subordinated Credit Agreement or any other Subordinated Claim.
"Subordinated Loan Maturity Date" means July 28, 2006.
"Subordinated Loans" means the Subordinated Revolving Loan and the
Subordinated Term Loan.
"Subordinated Notes" means each and all of the promissory notes
evidencing the loans made pursuant to the Subordinated Credit Agreement.
"Subordinated Revolving Loan" means each and all of the Revolving Loans
(as defined in the Subordinated Credit Agreement) funded under the Subordinated
Credit Agreement, except any such Subordinated Revolving Loans converted into
Subordinated Term Loans in accordance with the Credit Lyonnais Credit Agreement.
"Subordinated Term Loan" means each and all of the Term Loans (as
defined in the Subordinated Credit Agreement) funded under the Subordinated
Credit Agreement, together with (i) all Subordinated Revolving Loans converted
into Subordinated Term Loans in accordance with the Credit Lyonnais Credit
Agreement, (ii) all additional advances added to the Term Loans and (iii) all
interest at any time accrued on the Subordinated Loans.
"subsidiary" means, with respect to any person or entity at any time,
any corporation, limited liability company, partnership, association or other
entity of which equity securities or other ownership interests representing more
than 50% of the equity or profit interests or more than 50% of the ordinary
voting power or, in the case of a partnership, more than 50% of the general
partnership interests are, as of such date, owned, controlled or held by, or
that is otherwise controlled by, the parent or one or more subsidiaries of the
parent or by the parent and one or more of its subsidiaries.
"Subsidiary" means any subsidiary of the Company.
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References in this Agreement to a "Section," when not further identified
by reference to any document, are references to the Sections of this Agreement.
Section 2. Subordination. The Company and the Subordinated Lender, on
behalf of all present and future holders of Subordinated Claims, hereby covenant
and agree that the Subordinated Claims are and shall be postponed, subordinated
and junior in right of payment to the prior payment in full in cash of all
Senior Claims, on the terms and conditions herein set forth.
Section 3. Payment of Subordinated Claims. For as long as any holder of
Senior Claims may be obligated to extend credit to the Company or any Subsidiary
under any Senior Credit Facility, and thereafter until all Senior Claims have
been paid in full in cash and discharged, the Company will not make or permit
any Subsidiary to make, and no Subordinated Lender or other holder of
Subordinated Claims will demand, accept, receive or retain, any payment or
distribution of any kind or character, whether in cash, property, securities or
otherwise, on account or in respect of any Subordinated Claim, except that:
(a) Principal of the Subordinated Term Loan may be paid if (and
only if) at the time of such payment no commitments to extend credit
under any Senior Credit Facility are outstanding and all Senior Claims
have been paid in full in cash;
(b) Principal of the Subordinated Revolving Loan may be paid if
(and only if) at the time of such payment and after giving effect
thereto (i) no Senior Credit Facility Default has occurred and is
continuing or would result therefrom and (ii) the aggregate amount of
revolving credit loans and letters of credit obligations outstanding
under the Credit Lyonnais Credit Agreement is not greater than
$76,000,000; provided, nevertheless, that:
(1) if prior to the time of such payment any advance
under the Subordinated Revolving Loan was funded by a payment
demand under the SIMA Letter of Credit, the SIMA Letter of
Credit must have been amended (by an amendment acceptable to the
Senior Agent) to increase the amount available for payment under
the SIMA Letter of Credit by an amount of such advances funded
under the SIMA Letter of Credit;
(2) no such payment may be made at any time during the
period commencing on March 31, 2001 and ending on August 31,
2001 unless the Consolidated EBITDA (as defined in the Credit
Lyonnais Credit Agreement) of the Company and its consolidated
Subsidiaries for the 12-month period ending on March 31, 2001
was $55,000,000 or more; and
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(3) no such payment may be made at any time when any
Bankruptcy, Insolvency or Liquidation Proceeding is pending.
(c) Interest on the Subordinated Loans may be added to the
principal of the Subordinated Term Loan pursuant to the terms and
conditions of the Credit Lyonnais Credit Agreement and the Subordinated
Credit Agreement. Interest on the Subordinated Loans may be paid only if
at the time of such payment the Company is permitted to pay the
principal of the Subordinated Term Loan pursuant to Section 3(a).
Section 4. Bankruptcy, Insolvency or Liquidation Proceedings. In any
Bankruptcy, Insolvency or Liquidation Proceeding:
(a) All Senior Claims (including all Post-Petition
Interest/Expense Claims) shall be paid in full in cash before any
Subordinated Lender or any other holder of any Subordinated Claim shall
be entitled to receive any payment or distribution of any kind or
character, whether in cash, property, securities or otherwise, on
account or in respect of any Subordinated Claim in such Bankruptcy,
Insolvency or Liquidation Proceeding.
(b) The holders of Senior Claims arising under or in respect of
the Credit Lyonnais Credit Agreement and, after Discharge of the Credit
Lyonnais Financing, each other holder of Senior Claims shall be entitled
to receive each payment and distribution of any kind or character,
whether in cash, property, securities or otherwise (including any such
payment or distribution which may become payable or deliverable by
reason of any other Claim being subordinated to any Subordinated Claim),
that may become payable or deliverable on account or in respect of any
Subordinated Claim, for application to the payment of Senior Claims of
such holders (including all Post-Petition Interest/Expense Claims),
until all holders of Senior Claims have received payment in full in cash
of all Senior Claims (including all Post-Petition Interest/Expense
Claims). All such payments and distributions shall be delivered by the
debtor, trustee, receiver, disbursing agent or other person making such
payment or distribution in such Bankruptcy, Insolvency or Liquidation
Proceeding directly to the Senior Agent for the benefit of such holders
of Senior Claims.
(c) Except as otherwise agreed in writing by the Required Senior
Lenders, no payment or distribution consisting of any property or
securities other than cash shall be deemed applied to the payment of
Senior Claims at any adjudicated or imputed value. No discharge of the
liability of the debtor in such Bankruptcy, Insolvency or Liquidation
Proceeding shall, as against the holders of Subordinated Claims,
constitute payment of the Senior Claims or shall in any respect affect
or impair the right of the holders of Senior Claims to receive each
payment or distribution on account or in respect of Subordinated Claims
and to apply such payment or distribution to pay the Senior Claims
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(including all Post-Petition Interest/Expense Claims accrued or incurred
through the date on which cash proceeds have been received by the
holders of Senior Claims in an amount sufficient to pay all Senior
Claims in full), until cash proceeds have been received and applied to
the payment of Senior Claims in an amount sufficient to pay, in full and
in cash, all Senior Claims (including all Post-Petition Interest/Expense
Claims accrued or incurred through the date on which cash proceeds in
such amount are received).
(d) No holder of Subordinated Claims shall, in such Bankruptcy,
Insolvency or Liquidation Proceeding, (i) assert, or request relief
predicated on the assertion that, or join with any creditor or the
debtor or any trustee or representative in asserting or requesting
relief predicated on the assertion that, any of the Senior Claims is not
enforceable, should be equitably subordinated, is subject to avoidance
on any ground or is not secured by lawfully granted, continuously
perfected and nonavoidable security interests in the Senior Claim
Collateral, (ii) oppose or otherwise contest, or join with any creditor
or the debtor or any trustee or representative in opposing or otherwise
contesting any request by any Senior Lender for relief from any
automatic stay or from any other form of order or restraint for the
purpose of permitting such Senior Lender or its agent to foreclose upon
or otherwise enforce any or all of its security interests and liens upon
any Senior Claim Collateral or (iii) seek, or join with any creditor or
the debtor or any trustee or representative in seeking, substantive
consolidation of the estate of the debtor with the assets, liabilities
or estate of its parent company or any of its subsidiaries or any other
person or entity.
(e) Each holder of Subordinated Claims shall file, in
appropriate form, all claims and proofs of claim in respect of such
holder's Subordinated Claims whenever the filing of claims is required
or permitted by law upon any of the Subordinated Claims. If any holder
of Subordinated Claims does not file any such claim or proof of claim
promptly upon the request of any Senior Lender, then the Senior Agent or
the Required Senior Lenders under each Senior Credit Facility, and each
of their respective agents, is hereby irrevocably authorized and
empowered (but shall not be obligated), as attorney-in-fact for such
holder of Subordinated Claims with full power of substitution, either to
file such claim or proof thereof in the name of such holder or, at the
option of such Senior Agent or the Required Senior Lenders, to assign
such claim to the Senior Agent, for the benefit of the holders of Senior
Claims as their interest may appear in accordance with the provisions of
this Agreement, or to their nominee, and cause such claim or proof
thereof to be filed.
Section 5. Turnover. If and in each instance that, notwithstanding the
provisions of Section 3 and Section 4, any holder of any Subordinated Claim
receives any payment or distribution of any kind or character, whether in cash,
property, securities or otherwise (including any such payment or distribution
which may become payable or deliverable by reason of any other Claim being
subordinated to any Subordinated Claim but excluding any
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payment of principal that is made on any day when payment is expressly permitted
to be made as set forth in Section 3), on account or in respect of any
Subordinated Claim at any time when any Senior Claim or any commitment for any
extension of credit or incurrence of indebtedness under a Senior Credit Facility
is outstanding, then and in each such event:
(a) Such holder shall forthwith pay over, transfer and deliver
such payment or distribution to the Senior Agent, for the benefit of the
holders of Senior Claims arising under or in respect of the Credit
Lyonnais Credit Agreement and, after Discharge of the Credit Lyonnais
Financing, for the benefit of each other holder of Senior Claims, for
application to the payment of Senior Claims, until all Senior Claims
arising under or in respect of the Credit Lyonnais Credit Agreement and,
after Discharge of the Credit Lyonnais Financing, all other Senior
Claims (including, in each case, all Post-Petition Interest/Expense
Claims) have been paid in full in cash; and
(b) Each holder of a Subordinated Claim shall, and hereby agrees
to, hold in trust for the Senior Agent, for the benefit of the holders
of such Senior Claims, in the identical form received (except for any
necessary endorsement to the Senior Agent) and as trustee of an express
trust, all payments and distributions required to be paid over,
transferred and delivered pursuant to this Section 5.
Section 6. Subrogation. In any Bankruptcy, Insolvency or Liquidation
Proceeding, subject to the prior payment in full and in cash of any and all
Senior Claims (including all Post-Petition Interest/Expense Claims), the holders
of Subordinated Claims shall have and may enforce any and all rights of
subrogation accorded by law in respect of any payment or distribution on account
of any Subordinated Claim that is applied to the payment of any Senior Claim
pursuant to the provisions of this Agreement. For such purposes:
(a) No right of subrogation shall be available to or may be
enforced by any holder of any Subordinated Claim, unless and until all
Senior Claims (including all Post-Petition Interest/Expense Claims) have
been paid in full in cash.
(b) No holder of any Senior Claim makes any representation or
warranty, or shall otherwise have any responsibility, as to whether any
such right of subrogation is accorded or available to any holder of any
Subordinated Claim or is enforceable by any holder of any Subordinated
Claim in any particular circumstance.
(c) No holder of any Senior Claim shall have any duty to any
holder of any Subordinated Claim to ensure, perfect, protect, enforce or
maintain any right of subrogation that might otherwise be accorded or
available to or enforceable by any holder of any Subordinated Claim. The
subordination provided herein and the rights of the holders of Senior
Claims hereunder shall remain fully enforceable on the terms set forth
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herein, regardless of any act, omission or circumstance (whether or not
attributable to any holder of any Senior Claim and whether or not
wrongful) which does or might in any manner or in any respect destroy,
limit, reduce, affect or impair any right of subrogation otherwise
accorded or available to or enforceable by any holder of any
Subordinated Claim. Each holder of any Senior Claim shall remain utterly
free to take or fail to take any and all actions in respect of any
Senior Claim or any person or entity liable therefor or any collateral
security therefor (including each and all of the acts, omissions and
matters described in Section 11), without exonerating any holder of a
Subordinated Claim, even if any right of subrogation is destroyed,
limited, reduced, affected or impaired thereby.
(d) The subordination provided herein and the rights of the
holders of Senior Claims hereunder shall be fully enforceable as to all
Senior Claims which are not allowed, allowable or enforceable in such
Bankruptcy, Insolvency or Liquidation Proceeding (including
Post-Petition Interest/Expense Claims), even if and even though no right
of subrogation is available in respect of such Senior Claims.
(e) For purposes of enforcing any right of subrogation on the
terms set forth in this Section 6, no payment or distribution on account
of any Subordinated Claim applied to the payment of a Senior Claim
shall, as between the Company and the holder of such Subordinated Claim
and to the extent of the payment or distribution so applied, discharge
the liability of the Company for the payment of such Senior Claim and,
to this end, the Company shall remain obligated to pay such Senior Claim
in full despite any such application.
Section 7. Restrictions as to Security for Subordinated Claims.
(a) The Company will not grant or permit to exist, and no holder
of Subordinated Claims will demand, accept, take, seize or retain, any
security interest or lien upon any property now owned or hereafter
acquired by the Company or any Subsidiary as security for any
Subordinated Claim.
(b) The Company will not cause, permit or suffer any Subsidiary
to guarantee or otherwise become or remain liable for the payment of any
Subordinated Claim or to become or remain bound by any covenant or
agreement or any other form of assurance in any respect relating
thereto, and no holder of Subordinated Claims will demand, accept or
retain any such guarantee, liability, covenant, agreement or assurance.
Section 8. Restrictions Relating to Senior Documents. No holder of any
Subordinated Claim will accept or retain the benefit of any agreement in any
respect restricting the right of the Company or any Subsidiary (i) to incur or
repay or secure any Senior Claims in any amount, (ii) to enter into, amend,
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supplement, change, terminate, replace or refinance the Credit Lyonnais Credit
Agreement or any other agreement governing or relating to any Senior Credit
Facility, or (iii) to sell, transfer or otherwise dispose of any or all of the
capital stock of, or partnership or limited liability company interests in, or
other equity interests in, any Subsidiary or to sell, transfer or otherwise
dispose of any or all of the property or assets of the Company or any
Subsidiary, including dispositions by merger or consolidation, except only the
sale, transfer or other disposition of all or substantially all of the assets of
the Company and its Subsidiaries, taken as a whole. To the extent any of the
foregoing is prohibited or restricted in any manner under any provision of the
Subordinated Loan Documents, such provision is hereby forever waived by each
holder of Subordinated Claims.
Section 9. Amendment of Subordinated Loan Documents. No holder of
Subordinated Claims will enter into or accept any agreement to amend,
supplement, terminate or otherwise change any of the Subordinated Loan
Documents, except upon the prior written consent of the Required Senior Lenders.
Section 10. Acceleration and Enforcement of Subordinated Claims. Until
all commitments for any extension of credit under each outstanding Senior Credit
Facility have been discharged and all outstanding Senior Claims have been paid
in full in cash, no holder of Subordinated Claims will (a) demand, accelerate,
bring suit to collect or otherwise exercise or enforce any right or remedy in
respect of any Subordinated Claim or commence or prosecute any action or
proceeding thereon, (b) commence any Bankruptcy, Insolvency or Liquidation
Proceeding or join with any creditor in commencing any Bankruptcy, Insolvency or
Liquidation Proceeding, or appear in any Bankruptcy, Insolvency or Liquidation
Proceeding commenced by any other creditor in support of the commencement or
continuation thereof, or (c) otherwise exercise or enforce any right or remedy
in respect of any Subordinated Claim, including any right or remedy that
otherwise might be available to it in any Bankruptcy, Insolvency or Liquidation
Proceeding, unless:
(a) the Senior Agent has received written notice thereof,
stating the action to be taken and the grounds therefor, and
(b) at least 360 days have elapsed since the date such written
notice was received by the Senior Agent.
Notwithstanding the foregoing, nothing in this Section 10 shall limit
the rights of the Subordinated Lender to (i) refuse to make additional loans or
advances upon commencement of a Bankruptcy, Insolvency or Liquidation Proceeding
or (ii) prove and establish its Subordinated Claims in any such Bankruptcy,
Insolvency or Liquidation Proceeding.
Section 11. Subordination not Prejudiced, Affected or Impaired. No right
of any present or future holder of any Senior Claim to enforce subordination as
provided in this
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Agreement shall at any time in any way be prejudiced, affected or impaired by
any act or failure to act on the part of the Company or any Subsidiary or by any
act or failure to act on the part of any holder of Senior Claims or by any
breach or default by the Company or any Subsidiary in the performance or
observance of any promise, covenant or obligation enforceable by any holder of
Subordinated Claims, regardless of any knowledge thereof that any holder of
Senior Claims may have or otherwise be charged with.
(a) Without in any way limiting the generality of the foregoing,
each holder of any Senior Claim may at any time and from time to time,
without the consent of or notice to any holder of Subordinated Claims,
without incurring any responsibility or liability to any holder of
Subordinated Claims and without in any manner prejudicing, affecting or
impairing the subordination provided herein or the obligations of the
holders of Subordinated Claims under this Agreement:
(1) Make loans and advances to the Company or any
Subsidiary or issue, guaranty or obtain letters of credit for
account of the Company or any Subsidiary or otherwise extend
credit to the Company or any Subsidiary, in any amount and on
any terms, whether pursuant to a commitment or as a
discretionary advance and whether or not any default or event of
default or failure of condition is then continuing;
(2) Change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, compromise,
accelerate, extend or refinance, any Senior Claim or any
agreement, guaranty, lien or obligation of the Company or any
Subsidiary or any other person or entity in any manner related
thereto, or otherwise amend, supplement or change in any manner
any Senior Claim or any such agreement, guaranty, lien or
obligation;
(3) Increase or reduce the amount of any Senior Claim or
the interest, premium, fees or other amounts payable in respect
thereof;
(4) Release or discharge any Senior Claim or any
guaranty thereof or any agreement or obligation of the Company
or any Subsidiary or any other person or entity with respect
thereto;
(5) Take or fail to take any collateral security for any
Senior Claim or take or fail to take any action which may be
necessary or appropriate to ensure that any security interest or
lien upon any property securing any Senior Claim is duly
enforceable or perfected or entitled to priority as against any
other lien or to ensure that any proceeds of any property
subject to any security interest or lien are applied to the
payment of any Senior Claim;
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(6) Release, discharge or permit the lapse of any or all
security interests or liens upon any property at any time
securing any Senior Claim;
(7) Exercise or enforce, in any manner, order or
sequence, or fail to exercise or enforce, any right or remedy
against the Company or any Subsidiary or any collateral security
or any other person, entity or property in respect of any Senior
Claim or any security interest or lien securing any Senior Claim
or any right under this Agreement, and apply any payment or
proceeds of collateral in any order of application; or
(8) Sell, exchange, release, foreclose upon or otherwise
deal with any property that may at any time be subject to any
security interest or lien securing any Senior Claim.
(b) No exercise, delay in exercising or failure to exercise any
right arising under this Agreement, no act or omission of any holder of
Senior Claims in respect of the Company or any Subsidiary or any other
person or entity or any collateral security for any Senior Claim or any
right arising under this Agreement, no change, impairment, or suspension
of any right or remedy of any holder of any Senior Claim, and no other
act, failure to act, circumstance, occurrence or event which, but for
this provision, would or could act as a release or exoneration of the
obligations of the holders of Subordinated Claims hereunder shall in any
way affect, decrease, diminish or impair any of the obligations of any
holder of Subordinated Claims under this Agreement or give any holder of
Subordinated Claims or any other person or entity any recourse or
defense against any holder of Senior Claims in respect of any right
arising under this Agreement.
Section 12. Reinstatement. If any payment or other transfer at any time
applied to the payment or satisfaction of any Senior Claim is thereafter
rescinded, recovered, set aside, avoided or required to be returned, then such
Senior Claim and all rights of the holder of such Senior Claim to enforce
subordination as set forth herein shall be automatically and unconditionally
reinstated, as fully as if such payment or transfer had never been made.
Section 13. Transferees to be Bound.
(a) The Company and each holder of Subordinated Claims
represents, warrants and agrees that the following legend is and shall
at all times remain placed conspicuously upon the face and signatures
pages of each Subordinated Note and each other instrument evidencing any
Subordinated Claim held by such holder:
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The indebtedness and all obligations evidenced or represented
hereby, and certain other Subordinated Claims, are postponed,
subordinated and junior in right of payment to Senior Claims, as
defined in and on the terms set forth in a Debt Subordination
Agreement dated December 29, 1999, executed and delivered for
the benefit of the holders of such Senior Claims by the maker
hereof, and certain Subordinated Lender signatory thereto. The
provisions of said Debt Subordination Agreement are hereby
incorporated herein, as if set forth at length herein.
The Company agrees to issue any promissory note in substitution,
replacement or exchange for any Subordinated Note or any such other
instrument only on the terms set forth in the form of Subordinated Note
attached as Exhibits A and B to the Subordinated Credit Agreement, with
such legend likewise placed thereon.
(b) Prior to making or agreeing to make any transfer of any
Subordinated Note or any other instrument evidencing any Subordinated
Claim or any transfer of any interest in any Subordinated Claim, the
then holder thereof will (i) deliver a copy of this Agreement to the
transferee, (ii) cause the transferee duly to execute and deliver its
agreement to be bound by the provisions hereof, by execution of a
counterpart of the signature page hereto, stating the interest
transferred, and (iii) deliver such counterpart, so executed, to the
Senior Agent, accompanied by, if requested by the Senior Agent, an
opinion of reputable counsel stating that the execution and delivery of
such counterpart is within the power of such transferee and that such
counterpart was duly authorized, executed and delivered by such
transferee and is enforceable against such transferee in accordance with
its terms, subject to laws generally affecting the enforcement of the
rights of creditors and the applicability of general equitable
principles.
Section 14. Specific Enforcement. The Company and the Subordinated
Lender acknowledge and agree that an action for money damages is not an adequate
remedy for enforcement of this Agreement and, accordingly, agree that each and
all of the obligations arising hereunder may, at the option of the Senior Agent
or the Required Senior Lenders, be enforced by an action for specific
performance or other lawful specific or injunctive relief.
Section 15. Powers and Authorities Irrevocable; No Duty. All rights,
powers and authorities herein granted to any Senior Agent or Senior Lender, or
to the Required Senior Lenders, are coupled with an interest and are irrevocable
until Discharge of the Credit Lyonnais Financing and thereafter until all
commitments for any extension of credit or incurrence of indebtedness under each
outstanding Senior Credit Facility have been discharged and all outstanding
Senior Claims have been paid in full in cash. Such rights, powers and
authorities may
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be freely exercised by each Senior Agent or Senior Lender, or by the Required
Senior Lenders, or not exercised by any of them, in each instance as each of
them may see fit given its own individual interest as a holder of Senior Claims,
without any duty of care, duty of loyalty or other duty whatsoever to any holder
of Subordinated Claims.
Section 16. Enforceability. This Agreement (a) shall be binding upon and
enforceable against the Company and its successors and transferees and the
Subordinated Lender and each and all of its successors and transferees, (b) may
be jointly or separately enforced in any lawful manner against any one or more
or all of the persons and entities bound hereby, without any requirement that
other Claims or persons or entities bound hereby be joined (and no single or
partial exercise or enforcement of any right hereunder shall preclude any other
or further exercise or enforcement thereof), and (c) shall inure to the benefit
of and be enforceable by Credit Lyonnais, each Senior Lender and each other
present and future holder of any Senior Claim.
Section 17. Subordinated Lender's Representations and Warranties. The
Subordinated Lender hereby represents and warrants to each present and future
holder of any Senior Claim that (a) the Recital set forth in paragraph A above
is true and correct as of the date hereof, (b) it owns and is the sole holder of
the indebtedness outstanding under the Subordinated Credit Agreement, (c) it has
duly executed and delivered this Agreement, in compliance with all laws and
regulations applicable to it and all agreements binding upon it, with full power
and authority to bind itself and all holders of Subordinated Claims based upon
or arising in respect of such indebtedness, (d) this Agreement is binding upon
and legally enforceable against it and each such holder of Subordinated Claims,
and (e) its execution and delivery of this Agreement, and the performance of its
obligations hereunder and the obligations hereunder of each such holder of
Subordinated Claims, does not violate or conflict with, or constitute a default
under, any law, regulation, agreement or other contractual obligation binding
upon or enforceable against such party.
Section 18. Complete Agreement; Inconsistency; Modification; Waiver.
This Agreement sets forth definitively and exhaustively the complete agreement
of the parties with respect to the subject matter hereof. To the extent any
provision hereof is inconsistent with any provision in any of the Subordinated
Loan Documents, the provisions of this Agreement shall govern. No provision
hereof and no right arising hereunder may be modified or waived by any oral
agreement or shall be deemed to have been modified or waived by any act or
failure to act or shall otherwise be affected or changed, except as and to the
extent expressly set forth in a writing signed by the party to be bound thereby.
Section 19. Notices. Each notice required or permitted under this
Agreement to be given to any holder of Subordinated Claims shall be deemed
sufficiently given if delivered by mail, telecopy, overnight courier, personal
delivery or otherwise in any reasonable manner to the Subordinated Lender at
Societe Industrielle de Materiaux Avances, 00 Xxx xx Xxxxxxxx, 000000
00
Xxxxxxx Xxx Xxxxx, Xxxxx, Xxxxxx, Attention: Xxxxxxxx Xxxxxxxx, telecopy number
011-33-1-40882180.
Section 20. Headings. The paragraph headings herein are inserted solely
for convenience of reference and shall not be used to construe, interpret,
define or limit the provisions hereof.
Section 21. Governing Law; Consent to Jurisdiction. This Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York. Each of the Company and the Subordinated Lender and all other holders of
Subordinated Claims hereby (a) irrevocably consents to the exclusive
jurisdiction of the courts of the County of New York in the State of New York or
the courts of the United States for the Southern District of New York in respect
of any action or proceeding arising out of or in connection with this Agreement
or for the enforcement of any right hereunder, (b) waives any objection which it
may have at any time to the laying of venue of any such action or proceeding in
any such court, waives any claim that such action or proceeding has been brought
in an inconvenient forum, and further waives the right to object that such court
does not have jurisdiction over such party, and (c) agrees that process in any
such action or proceeding may be served upon it, and shall be sufficiently
served upon it, by mail to its address set out on the signature pages hereof,
without limiting the right of any person or entity to serve process in any other
manner permitted by law.
Section 22. Waiver of Right to Trial by Jury. Each party hereto hereby
waives, absolutely, unconditionally, irrevocably and forever, any right to trial
by jury in any action or proceeding arising out of or in connection with this
Agreement or for the enforcement of any right hereunder.
Section 23. Continuing and Irrevocable Agreement; Acceptance. This
Agreement is a continuing and irrevocable agreement enforceable against each
signatory party hereto by Credit Lyonnais, each Senior Lender and each other
present and future holder of any Senior Claim. Notice of acceptance hereof by
Credit Lyonnais, any Senior Lender or any such holder is hereby waived, and
reliance hereon by each of them is hereby unconditionally and conclusively
acknowledged.
Section 24. Counterparts. This Agreement may be executed in any number
of counterparts and by the parties on one or more counterparts, all of which
taken together shall constitute a single agreement. Delivery of an executed
signature page to this Agreement by facsimile shall be effective as delivery of
a manually signed counterpart.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
as of the day and year first above stated.
SPECIAL METALS CORPORATION
By:________________________________
Name:___________________________
Title:__________________________
CREDIT LYONNAIS NEW YORK BRANCH
By:________________________________
Name:___________________________
Title:__________________________
Societe Industrielle de Materiaux
Avances
By:________________________________
Name:___________________________
Title:__________________________
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