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Exhibit 4.11
SUBORDINATION AGREEMENT
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THIS SUBORDINATION AGREEMENT is made this 5th day of October, 2000, by
SOCIETE EUROPEENNE DE PRODUITS REFRACTAIRES, as Trustee for those Persons
identified on Schedule I (the "Subordinated Creditor"), and UNIFRAX CORPORATION,
a Delaware corporation (the "Borrower"), in favor of CHASE MANHATTAN TRUST
COMPANY, NATIONAL ASSOCIATION (as successor to PNC Bank, National Association),
as Trustee, its successors and assigns (the "Trustee"), and the "Noteholders"
(as that term is defined in the Indenture which is defined below) .
RECITALS
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A. The Borrower, the Trustee and the Noteholders have entered into the
Indenture (as that terms is defined below).
B. Under the terms of that certain Stock and Asset Purchase Agreement
dated July 27, 2000 (as amended, the "Purchase Agreement"), by and among the
Subordinated Creditor and others as sellers, and the Borrower and others as
buyers, the execution and delivery of this Agreement is a condition precedent to
the Borrower's obligation to close the purchase described in the Purchase
Agreement.
AGREEMENTS
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NOW, THEREFORE, in consideration of the foregoing, the Subordinated
Creditor and the Borrower jointly and severally represent and agree with the
Trustee and the Noteholders as follows:
ARTICLE I
DEFINITIONS
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Section 1.1 SPECIFIC DEFINITIONS.
As used in this Agreement, the terms defined in the preamble and
Recitals hereto shall have the respective meanings specified therein, and the
following terms shall have the following meanings:
"Bankruptcy Code" means The Bankruptcy Code of 1978, as amended from
time to time (11 U.S.C. Sections 101 et seq.), and any replacement or successor
act that has a substantially similar purpose.
"Borrower" has the meaning set forth in the initial paragraph to this
Agreement.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State are authorized or required to close.
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"Collateral" means any and all property, real, personal property or
otherwise, that is subject to Liens that secure the Senior Note Indebtedness;
provided, however, the same shall be subject to the provisions of Section 2.2.4
(Senior Credit Agreement).
"Credit Agreement" means that certain Credit Agreement dated of even
date herewith, as amended, modified, restated, substituted, extended and renewed
at any time and from time to time, by and among the Borrower, other parties who
may be identified from time to time therein as "Borrowers," Bank of America,
N.A., a national banking association, its successors and assigns as the "Agent"
thereunder, and the parties who may be identified from time to time therein as
"Lenders," and each of their respective successors and assigns.
"Default Notice" means (a) a notice from the Trustee to the
Subordinated Creditor stating that an Event of Default exists under the Senior
Note Indebtedness and whether that Event of Default is a payment default or
another default, or (b) a notice from the Subordinated Creditor to the Trustee
stating that a payment default exists under the Subordinated Indebtedness.
"Indenture" means that certain Indenture dated as of October 15, 1996,
between the Trustee and the Borrower.
"Insolvency Proceeding" means any receivership, conservatorship,
general meeting of creditors, insolvency or bankruptcy proceeding, assignment
for the benefit of creditors, or any proceeding or action by or against the
Borrower for any relief under any bankruptcy or insolvency law or other laws
relating to the relief of debtors, readjustment of indebtedness,
reorganizations, dissolution, liquidation, compositions or extensions, or the
appointment of any receiver, intervenor or conservator of, or trustee, or
similar officer for, the Borrower or any substantial part of its properties or
assets, including, without limitation, proceedings under the Bankruptcy Code, or
under other federal, state or local statute, laws, rules and regulations, all
whether now or hereafter in effect.
"Lien" means any mortgage, deed of trust, deed to secure debt, grant,
pledge, security interest, assignment, encumbrance, judgment, financing
statement, lien or charge of any kind, whether perfected or unperfected,
avoidable or unavoidable, consensual or non-consensual including, without
limitation, any conditional sale or other title retention agreement, any lease
in the nature thereof, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction.
"Person" means an individual, a corporation, a partnership, a joint
venture, a trust, an unincorporated association, a government or political
subdivision or agency thereof or any other entity.
"Security" means any security agreement, pledge, pledge agreement,
guaranty agreement, mortgage, deed of trust, deed to secure debt, trust deed,
land trust, indenture, indemnity deed of trust, indemnification agreement,
proceeding IN REM, reimbursement agreement, financing statement, purchase
agreement, conditional sales contract, installment sales contract, collateral
agreement, financing lease, letter of credit, bond, loan agreement,
hypothecation agreement, deposit, financing statement or assignment, and also
means any agreement, document, security device or arrangement, document,
statutory lien, lien arising by operation of law, judgment or
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other lien, right of setoff, encumbrance, proceeding or other document or right,
in whatever form or however arising, whether similar or dissimilar to the
foregoing which directly or indirectly secures or enforces payment or
performance of any Person against, or otherwise encumbers or gives notice of an
encumbrance upon, the real property, personal property, rights or assets of any
Person.
"Senior Credit Agreement" shall mean the Credit Agreement, and any
successor to or replacement of the Credit Agreement (including, without
limitation, any agreement pursuant to which the Borrower issues debt securities
senior to the "Subordinated Indebtedness" (as that term is defined in the Credit
Agreement)) and all or part of the credit facilities provided thereunder, as
each such successor, replacement or agreement may from time to time be entered
into, amended, renewed, supplemented, succeeded, replaced, or otherwise modified
in accordance with the terms of this definition.
"Senior Credit Subordination Agreement" means that certain
Subordination Agreement dated the same date as this Agreement and as amended,
modified, restated, substituted, extended and renewed from time to time, from
the Subordinated Creditor and the Borrower in favor of the Bank of America,
N.A., a national banking association, its successors and assigns as the "Agent"
thereunder, and the parties who may be identified from time to time therein as
"Lender," and each of their respective successors and assigns.
"Senior Indenture" shall mean the Indenture, and any successor to or
replacement of the Indenture (including, without limitation, any agreement
pursuant to which the Borrower issues debt securities senior to the Subordinated
Indebtedness) and all or part of the credit facilities provided thereunder, as
each such successor, replacement or agreement may from time to time be entered
into, amended, renewed, supplemented, succeeded, replaced, or otherwise modified
in accordance with the terms of this definition.
"Senior Note Documents" means the collective reference to each and
every note, instrument, security agreement, pledge agreement, guaranty
agreement, mortgage, deed of trust, indemnity deed of trust, loan agreement,
hypothecation agreement, indemnity agreement, letter of credit application,
assignment, or any other document (whether similar or dissimilar to any of the
foregoing) previously, simultaneously or hereafter executed and delivered by the
Borrower or any other Person, singly or jointly with another Person or Persons,
in connection with any of the Senior Note Indebtedness, including, without
limitation, the "Loan Documents" as defined in the Indenture, all as amended,
modified, restated, substituted, extended and renewed at any time and from time
to time.
"Senior Note Indebtedness" means all indebtedness, liabilities and
obligations of the Borrower under the Senior Indenture of every kind and nature
whatsoever, whether now existing or hereafter arising or created at any time
including, without limitation, such indebtedness, liabilities and obligations of
the Borrower under the Senior Indenture (a) which are direct, indirect,
contingent, primary, secondary, alone, jointly with others, acquired directly or
by assignment, due, to become due, unsecured, secured, future advances, incurred
or assumed, (b) which are evidenced by the Senior Notes, (c) which are claims of
subrogation, indemnification, reimbursement or contribution of the Trustee
and/or the Noteholders against the Borrower or any other Person relating in any
manner to obligations of the Borrower or the Security in respect of the
indebtedness,
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liabilities and obligations included in this definition, (d) which are claims of
whatever nature and whenever arising on account of the avoidance of payments or
other transfers to or for the benefit of the Trustee and/or the Noteholders in
Insolvency Proceedings or otherwise, or (e) which are claims (including, without
limitation, claims arising or accruing after the commencement of Insolvency
Proceedings by or against the Borrower or any assets of the Borrower, whether or
not such claims are allowed) for principal, interest, expense payments,
liquidation costs, and attorneys' fees and expenses, all of the foregoing
whether arising under contract, by tort, at law, in equity or otherwise.
"Senior Notes" means the 10 1/2% Senior Notes due 2003 issued by the
Borrower in the original aggregate principal amount of $100,000,000 pursuant to
the Indenture.
"Standstill Period" shall mean any period during which the Borrower is
subject to any Insolvency Proceeding and also any period commencing from the
date of a Default Notice from the Trustee and continuing until:
(a) the Senior Note Indebtedness is paid and satisfied in full (or
until the default is sooner cured within any applicable grace period or cured
with the unconditional permission of the Trustee and the Noteholders), if a
default under the Trustee's Default Notice is a payment default under the Senior
Note Indebtedness or is a default arising on account of the Subordinated
Creditor's receipt of a payment, distribution or other consideration in
violation of this Agreement or the Senior Note Documents; or
(b) in the case of any other default under a Default Notice from the
Trustee, 180 days after the Default Notice or the earliest of (i) 180 days after
the Default Notice MINUS the number of days in all other Standstill Periods
during the 360 day interval preceding the Default Notice, or (ii) the date on
which the Subordinated Creditor receives a notice from the Trustee that the
Standstill Period is terminated or (iii) the date on which all such defaults
have been cured or waived with the Trustee's unconditional permission; provided
however, that (x) no Standstill Period shall be imposed under this clause (b)
with respect to the same default for a period of ninety (90) days after the last
day of any Standstill Period.
"State" means the State of Illinois.
"Subordinated Creditor" shall have the meaning set forth in the initial
paragraph to this Agreement.
"Subordinated Indebtedness" means any and all existing and future
indebtedness, liabilities and obligations of the Borrower to the Subordinated
Creditor of every kind and nature whatsoever, including, without limitation,
such indebtedness, liabilities, and obligations of the Borrower to the
Subordinated Creditor (a) which are direct, indirect, contingent, primary,
secondary, alone, jointly with others, due, to become due, acquired directly or
by assignment, unsecured, secured, future advances, incurred or assumed, and all
guaranties, indemnifications and other undertakings of Persons other than the
Borrower with respect to the foregoing, (b) which relate to or arise from
guaranties, indemnifications or other similar agreements in favor of third
parties made by the Subordinated Creditor at the request or for the benefit of
the Borrower, including, without limitation, the "Unifrax Guarantees" (as that
term is defined in the Indenture), (c) which are claims of indemnification,
reimbursement or contribution of the Subordinated
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Creditor against the Borrower or any other Person relating in any manner to
obligations of the Borrower or the Security, (d) which are claims of whatever
nature and whenever arising on account of the avoidance of payments or other
transfers to or for the benefit of the Subordinated Creditor in Insolvency
Proceedings or otherwise, or (e) which are claims (including, without
limitation, claims arising or accruing after the commencement of Insolvency
Proceedings by or against the Borrower or any of the assets of the Borrower,
whether or not such claims are allowed) for interest, expense payments,
liquidation costs, and attorneys' fees and expenses, all of the foregoing
whether arising under contract, by tort, at law, in equity or otherwise.
"Subordinated Promissory Note" has the meaning set forth in EXHIBIT A
to this Agreement. The indebtedness evidenced by the Subordinated Promissory
Note is part of the Subordinated Indebtedness.
Section 1.2 OTHER DEFINITIONAL PROVISIONS.
Unless otherwise defined herein, all terms used herein which are
defined by the Illinois Uniform Commercial Code shall have the same meanings as
assigned to them by the Illinois Uniform Commercial Code unless and to the
extent varied by this Agreement. The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section, subsection, schedule and exhibit references are references to sections
or subsections of, or schedules or exhibits to, as the case may be, this
Agreement unless otherwise specified. As used herein, the singular number shall
include the plural, the plural the singular and the use of the masculine,
feminine or neuter gender shall include all genders, as the context may require.
Reference to any one or more of the Senior Note Documents and any of the Senior
Note Documents shall mean the same as the foregoing may from time to time be
amended, restated, substituted, extended, renewed, supplemented or otherwise
modified.
ARTICLE II
SUBORDINATION
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Section 2.1 SUBORDINATED INDEBTEDNESS.
2.1.1 SUBORDINATION.
Subject to the terms and conditions of this Agreement, the
Subordinated Creditor hereby subordinates and postpones the payment and the time
of payment of all of the Subordinated Indebtedness to and in favor of the
indefeasible and full payment in cash and the time of payment of the Senior Note
Indebtedness. The Subordinated Creditor and the Borrower represent and warrant
to the Trustee and the Noteholders that all existing Subordinated Indebtedness
is described in EXHIBIT A attached hereto and made a part hereof.
2.1.2 PAYMENTS.
Until all of the Senior Note Indebtedness has been fully and
indefeasibly paid in cash, the Subordinated Creditor shall not, without the
prior written consent of the Trustee, ask, demand, accelerate, declare a default
under, xxx for, set off, accept or receive any payment of all or any part of the
Subordinated Indebtedness; PROVIDED, HOWEVER, that unless a Standstill Period
exists, the Subordinated Creditor may receive and may enforce its right to
receive any payments
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described in EXHIBIT B attached hereto and made a part hereof. The Subordinated
Creditor agrees that if, during (with the Trustee's express written permission)
or within five (5) Business Days following any Standstill Period, the Borrower
pays amounts due or coming due during the Standstill Period or performs any
obligation to the Subordinated Creditor which has given rise to a default under
the Subordinated Indebtedness, the Borrower, by making such payment or
performing such obligation, shall be deemed to have cured and the Subordinated
Creditor to have waived any default under the Subordinated Indebtedness which
may have arisen on account of the failure to make that payment or perform that
obligation earlier.
2.1.3 LEGEND ON SUBORDINATED INDEBTEDNESS.
The Subordinated Creditor and the Borrower agree and warrant
that any instrument, agreement, security or other writing now or hereafter
evidencing all or any portion of the Subordinated Indebtedness shall bear on its
face a clear and conspicuous legend that it is subject to the terms of this
Agreement. Until all Senior Note Indebtedness has been indefeasibly paid in full
in cash, the Borrower shall not issue any instrument, security or other writing
(other than those, if any, described in EXHIBIT A) evidencing any part of the
Subordinated Indebtedness or amend or modify in any respect any such instrument,
security or other writing except at the request of and in that manner requested
by the Trustee.
Section 2.2 SECURITY.
2.2.1 SECURITY FOR SUBORDINATED INDEBTEDNESS.
The Subordinated Creditor and the Borrower agree, represent
and warrant that the Subordinated Indebtedness is not, and shall not be secured
in any way directly or indirectly by any Security.
2.2.2 NO ACTION BY SUBORDINATED CREDITOR.
Until the Senior Note Indebtedness has been fully and
indefeasibly paid in cash, the Subordinated Creditor shall not, without the
prior written consent of the Trustee, ask, demand, assign, declare a default
under, accelerate, xxx for, liquidate, sell, foreclose, set off, collect, accept
a surrender, receive any proceeds, petition, commence or otherwise initiate any
Insolvency Proceedings (or join any other Person in so doing) against the
Borrower or its assets, commence any action or proceeding to contest the
provisions of this Agreement or the priority of the Lien, if any, or other
interest, if any, of the Trustee and/or the Noteholders in the Security, or
otherwise realize or seek to realize upon all or any part of the Security;
PROVIDED, HOWEVER, that, except during a Standstill Period, the Subordinated
Creditor may receive and may enforce its right to receive any payments described
in EXHIBIT B attached hereto and made a part hereof.
2.2.3 PROVISIONS WITH RESPECT TO LIENS.
The following shall govern any Lien in favor of the
Subordinated Creditor or any Security for the Subordinated Obligations,
provided, however, that nothing in this Section 2.2.3 shall be deemed to consent
to any such Lien or Security:
(a) The Subordinated Creditor hereby subordinates the
lien and priority of the Subordinated Creditor's existing and future Liens and
other interests, if any, in
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and to the Collateral to the existing and future interest, if any, of the
Trustee and/or the Noteholders in the Collateral notwithstanding the time of
attachment of the interests of the Trustee and/or the Noteholders or the
Subordinated Creditor or the time the Senior Note Indebtedness or the
Subordinated Indebtedness is incurred. The lien priorities provided in this
Section shall not be altered or otherwise affected by any amendment,
modification, supplement, extension, renewal, restatement or refinancing of
either the Senior Note Indebtedness or the Subordinated Indebtedness, nor by any
action or inaction which the Trustee and/or the Noteholders or the Subordinated
Creditor may take or fail to take in respect of the Collateral, except as
otherwise provided above in this subsection.
(b) In the event the Trustee and/or the Noteholders
may from time to time execute releases, partial releases, terminations,
reconveyances, subordinations or other documents releasing or otherwise limiting
the interests of the Trustee and/or the Noteholders in the Collateral, the
Subordinated Creditor agrees to execute and deliver at the same time such
further documents as the Trustee may require to effect a corresponding change to
the Subordinated Creditor's position in the same Collateral.
2.2.4 SENIOR CREDIT AGREEMENT.
The Subordinated Creditor and the Borrower hereby notify the
Trustee and the Noteholders that the Senior Credit Agreement prohibits the
Borrower from granting or from suffering a Lien or any Security to secure the
Senior Note Indebtedness and nothing in this Agreement shall be construed as
granting or consenting (by the Borrower or by the Agent or the Lender under the
Senior Credit Agreement, or otherwise) to a Lien or any Security to secure the
Senior Note Indebtedness. The Senior Note Indebtedness is not secured by any
Liens or any Security.
Section 2.3 FURTHER REPRESENTATIONS AND WARRANTIES.
The Subordinated Creditor represents and warrants to the Trustee and
the Noteholders that:
(a) the Subordinated Creditor is the exclusive legal
and beneficial owner of the Subordinated Indebtedness and no part thereof has
been assigned to or subordinated or subjected to any other security interest in
favor of anyone other than the Trustee and/or the Noteholders;
(b) true, correct and complete copies of all
documents relating to the Subordinated Indebtedness in effect as of the date
hereof have been furnished to the Trustee;
(c) the execution, delivery and performance of this
Agreement is within the corporate powers of the Subordinated Creditor, has been
duly authorized by all necessary corporate action of the Subordinated Creditor,
and does not contravene any law, any provision of the certificate of
incorporation or the by-laws of the Subordinated Creditor or any agreement to,
or any law, rule, order or regulation, which the Subordinated Creditor is a
party or by which it or its properties are bound; and
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(d) this Agreement has been properly executed and
delivered and constitutes the valid and legally binding obligations of the
Subordinated Creditor and is fully enforceable against the Subordinated Creditor
in accordance with its terms.
Section 2.4 FURTHER DOCUMENTS.
The Subordinated Creditor and the Borrower agree they shall promptly
execute such further documents and acknowledgements as the Trustee may
reasonably require to confirm or evidence their respective obligations and the
Trustee's rights under this Agreement.
ARTICLE III
DISTRIBUTIONS AND RECEIPTS
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Section 3.1 DISTRIBUTIONS, ETC.
3.1.1 APPLICATION OF PROCEEDS.
In the event of any distribution, division or application,
partial or complete, voluntary or involuntary, by operation of law or otherwise,
of all or any part of the assets of the Borrower or the proceeds thereof to
creditors of the Borrower or to any indebtedness, liabilities and obligations of
the Borrower, by reason of the liquidation, dissolution or other winding up of
the Borrower or Borrower's business, or in the event of any sale or Insolvency
Proceedings with respect to the Borrower or its assets, then in any such event,
any payment, distribution or benefit of any kind whatsoever or character, either
in cash, securities or other property which shall be payable, deliverable or
receivable upon or with respect to all or any part of the Subordinated
Indebtedness shall be paid or delivered directly to the Trustee for application
to the Senior Note Indebtedness (whether due or not due and in such order and
manner as the Trustee may elect; and including, without limitation any interest
accruing subsequent to the commencement of any such event or Insolvency
Proceedings) until the Senior Note Indebtedness shall have been fully and
indefeasibly paid in cash and satisfied.
3.1.2 INSOLVENCY PROCEEDINGS.
In connection with any Insolvency Proceedings, the
Subordinated Creditor hereby irrevocably authorizes and empowers the Trustee,
and irrevocably appoints the Trustee the Subordinated Creditor's
attorney-in-fact to take any of the following actions if the Subordinated
Creditor has failed to take such actions within 10 days prior to any deadline
therefor (a) demand, xxx for, collect and receive every such payment or
distribution and give acquittance therefor, (b) enforce claims comprising
Subordinated Indebtedness in the name of the Trustee, or the name of the
Subordinated Creditor, by proof of debt, proof of claim, suit or otherwise; (c)
collect any assets of the Borrower distributed, dividend or applied by way of
dividend or payment, or any such securities issued, on account of Subordinated
Indebtedness and apply the same, or the proceeds of any realization upon the
same, to Senior Note Indebtedness (whether due or not due in such order and
manner as the Trustee may elect) until all Senior Note Indebtedness, shall have
been indefeasibly paid in full in cash; (d) vote claims compromising
Subordinated Indebtedness to accept or reject any plan of partial or complete
liquidation, reorganization, arrangement, composition or extension; (e) take
generally any action which the Subordinated Creditor might otherwise take; and
(f) take such other actions in the Trustee's own
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name or in the name of the Subordinated Creditor or otherwise, as the Trustee
may reasonably deem necessary or advisable to carry out the provisions of this
Agreement.
3.1.3 EXECUTION OF ADDITIONAL DOCUMENTS.
The Subordinated Creditor hereby agrees to execute and deliver
to the Trustee such powers of attorney, notices, assignments, endorsements,
releases, other documents or other instruments as may be reasonably requested by
the Trustee in order to enable the Trustee to enforce any and all claims upon or
with respect to the Subordinated Indebtedness and/or the Security, and to
collect and receive any and all payments or distributions which may be payable
or deliverable at any time upon or with respect to the Subordinated Indebtedness
and/or the Security.
Section 3.2 RECEIPTS BY SUBORDINATED CREDITOR.
Should any payment or distribution not permitted by the provisions of
this Agreement or property or proceeds thereof be received by the Subordinated
Creditor upon or with respect to all or any part of the Subordinated
Indebtedness and/or the Security prior to the full payment and satisfaction of
the Senior Note Indebtedness, the Subordinated Creditor will immediately deliver
the same as required under the Senior Credit Subordination Agreement and this
Agreement in precisely the form received (except for the endorsement or
assignment of the Subordinated Creditor when the Trustee reasonably deems
appropriate), for application to the Senior Note Indebtedness (whether or not
any amount is then due and in such order and manner as the Senior Indenture may
require or, absent such a requirement, as the Trustee may elect), and, until so
delivered, the same shall be held in trust by the Subordinated Creditor as
property of the Trustee on behalf of the Trustee and the Noteholders. In the
event of the failure of the Subordinated Creditor to make any such endorsement
or assignment, the Trustee, or any of its officers or employees on behalf of the
Trustee, is hereby irrevocably authorized in its own name or in the name of the
Subordinated Creditor to make the same, and is hereby appointed the Subordinated
Creditor's attorney-in-fact for those purposes, that appointment being coupled
with an interest and irrevocable.
ARTICLE IV
ADDITIONAL AGREEMENTS
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Section 4.1 CONSENTS, WAIVERS, ETC.
The Subordinated Creditor hereby consents that at any time and from
time to time and with or without consideration, the Trustee and/or the
Noteholders may, without further consent of or notice to the Subordinated
Creditor and without in any manner affecting, impairing, lessening or releasing
any of the provisions of this Agreement, renew, extend, change the manner, time,
place and terms of payment of, sell, exchange, release, substitute, surrender,
realize upon, modify, waive, grant indulgences with respect to and otherwise
deal with in any manner: (a) all or any part of the Senior Note Indebtedness;
(b) all or any of the Senior Note Documents; (c) all or any part of any property
at any time included within the Collateral; and (d) any Person at any time
primarily or secondarily liable for all or any part of the Senior Note
Indebtedness and/or any collateral and security therefor, all as if this
Subordination Agreement and any interest which the Subordinated Creditor has in
the Collateral did not exist; provided,
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however, that nothing in this Section 4.1 shall be deemed to consent to any
expansion of the scope of the Senior Note Indebtedness.
Section 4.2 CONTINUING AGREEMENT.
This is a continuing Subordination Agreement until all of the Senior
Note Indebtedness has been fully and indefeasibly paid in cash, until all of the
Senior Note Indebtedness and all of the Subordinated Creditor's obligations to
the Trustee and the Noteholders have been performed and satisfied, until the
Trustee and the Noteholders have no obligation or agreement to allow further
Senior Note Indebtedness. Without implying any limitation on the foregoing, if
at any time any payment or assets distributed or paid over, or portion thereof,
made by, or for the account of, the Borrower, by the Subordinated Creditor or
otherwise on account of any of the Senior Note Indebtedness is set aside by any
court or trustee having jurisdiction as a voidable preference or fraudulent
conveyance or must otherwise be restored or returned by the Trustee and/or the
Noteholders to the Borrower or any other Person under any Insolvency Proceedings
or otherwise, the Subordinated Creditor and the Borrower hereby agree that this
Agreement shall continue and remain in full force and effect or be reinstated,
as the case may be, all as though any such payment had not been made and this
Agreement had at all times remained in effect.
Section 4.3 NO THIRD PARTY BENEFICIARIES.
The provisions of this Agreement are solely for the benefit of the
Trustee and the Noteholders, other holders or obligees under the Senior Note
Indebtedness, and their respective successors and assigns under the Senior
Indenture, and, subject to the provisions of Section 2.2.4 (Senior Credit
Agreement), there are no other parties or Persons whatsoever (including, without
limitation, the Borrower and its successors and assigns) who are intended to be
benefited in any manner whatsoever by this Agreement.
Section 4.4 TRANSFERS BY SUBORDINATED CREDITOR.
The Subordinated Creditor agrees not to subordinate, assign or transfer
all or any part of the Subordinated Indebtedness or the Security to any Person
other than the Trustee and the Noteholders without the prior written consent of
the Trustee.
Section 4.5 TRANSFER OR ASSIGNMENT OF SENIOR NOTE INDEBTEDNESS.
If any of the Senior Note Indebtedness should be transferred or
assigned by the Trustee and/or the Noteholders, this Agreement will inure to the
benefit of the transferee or assignee of the Trustee and/or the Noteholders to
the extent of such transfer or assignment, provided that the Trustee and/or the
Noteholders shall continue to have the unimpaired right to enforce this
Agreement as to any of the Senior Note Indebtedness not so transferred or
assigned.
Section 4.6 ACTIONS UPON BREACH.
4.6.1 BORROWER'S DEFENSE.
If the Subordinated Creditor, in violation of this Agreement,
commences or participates in any action or proceeding against the Borrower or
the Security, the Borrower may interpose as a defense or dilatory plea the
making of this Agreement, and the Trustee may intervene and interpose such
defense or plea in the name of the Trustee and/or the Noteholders or in the name
of the Borrower. Should the Subordinated Creditor, in violation of this
Agreement,
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in any way attempt to enforce payment of the Subordinated Indebtedness or any
part thereof or to realize upon the Collateral or any part thereof, either the
Trustee (in the name of the Trustee and/or the Noteholders or in the name of the
Borrower), the Borrower itself, or the Trustee and the Borrower, may restrain
the Subordinated Creditor from so doing, it being understood and agreed by the
Subordinated Creditor that (a) the damages of the Trustee and/or the Noteholders
and/or the Borrower from the Subordinated Creditor's actions may at that time be
difficult to ascertain and may be irreparable, and (b) the Subordinated Creditor
waives any defense that the Borrower and/or that the Trustee and/or the
Noteholders cannot demonstrate damage and/or can be made whole by the awarding
of damages. The Subordinated Creditor hereby irrevocably authorizes and empowers
the Lender, and irrevocably appoints the Trustee the Subordinated Creditor's
attorney-in-fact for the purpose of executing and delivering such assignments,
endorsements, releases, other instruments and other documents which the
Subordinated Creditor is or may be required to execute and deliver under the
terms of this Agreement.
4.6.2 EQUITABLE RELIEF FOR TRUSTEE AND THE NOTEHOLDERS.
If any one or more of the Subordinated Creditor or the
Borrower contrary to this Agreement, makes, attempts to or threatens to make or
receive any payment, take any action with respect to the Security or take any
action contrary to this Agreement, or fails to take any action required by this
Agreement, the Trustee and/or the Noteholders may obtain relief by injunction,
specific performance and/or other appropriate equitable relief, it being
understood and agreed by the Subordinated Creditor and the Borrower that (a) the
damages of the Trustee and/or the Noteholders from the actions of the
Subordinated Creditor may at that time be difficult to ascertain and may be
irreparable and (b) the Subordinated Creditor and the Borrower waive any defense
or claim that the Borrower and/or the Trustee and/or the Noteholders cannot
demonstrate damage and/or can be made whole by the awarding of damages.
4.6.3 COSTS AND EXPENSES.
The Subordinated Creditor and the Borrower agree to indemnify
the Trustee and the Noteholders and to hold the Trustee and the Noteholders
harmless for any and all reasonable costs and expenses (including, without
limitation, reasonable attorney's fees) as they arise, relating to actions of
the Subordinated Creditor or the Borrower taken contrary to this Agreement.
Section 4.7 STATEMENT OF DEBT.
The Subordinated Creditor and the Borrower will, at any time or times
upon the reasonable request of the Trustee, promptly furnish to the Trustee a
true, correct and complete statement of the outstanding Subordinated
Indebtedness.
Section 4.8 SUBROGATION; MARSHALLING.
The Subordinated Creditor shall not be subrogated to, or be entitled to
any assignment of any Senior Note Indebtedness or evidence of the Senior Note
Indebtedness or any Security until all Senior Note Indebtedness is indefeasibly
paid and satisfied in full. The Subordinated Creditor hereby waives any and all
rights to have any Security or any part thereof granted to the Trustee and/or
the Noteholders marshaled in any Insolvency Proceedings or upon any foreclosure
or other disposition of such Collateral by the Trustee and/or the Noteholders or
otherwise.
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Section 4.9 BANKRUPTCY FINANCING.
If the Borrower shall become subject to a proceeding under the
Bankruptcy Code and if the Trustee desires to permit the use of cash collateral
and/or to provide financing to such the Borrower under either Section 363 or
Section 364 of the Bankruptcy Code, the Subordinated Creditor agrees as follows:
(a) adequate notice to the Subordinated Creditor shall be deemed to have been
given to Subordinated Creditor if the Subordinated Creditor receives notice
three (3) business days prior to the entry of the order approving such
financing, and (b) no objection will be raised by the Subordinated Creditor to
any such financing on the ground of a failure to provide "adequate protection"
for the Subordinated Creditor's junior lien on the Collateral or any other
grounds, provided the Subordinated Creditor retains a lien on and security
interest in the post-petition Collateral to the extent and with the same
priority as existed prior to the commencement of the proceeding under the
Bankruptcy Code. For purposes of this Section, notice of a proposed financing or
use of cash collateral shall be deemed given when given, in the manner
prescribed by this Agreement, to the Subordinated Creditor or its counsel.
ARTICLE V
MISCELLANEOUS
-------------
Section 5.1 NOTICES.
All notices, requests and demands to or upon the parties to this
Agreement shall be in writing and shall be deemed to have been given or made
when delivered by hand on a Business Day, or two (2) days after the date when
deposited in the mail, postage prepaid by registered or certified mail, return
receipt requested, or when sent by overnight courier, on the Business Day next
following the day on which the notice is delivered to such overnight courier,
addressed as follows:
Borrower: Unifrax Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxx
with copies to:
Xxxxxxx X. Xxxxxx, Xx., Esquire
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
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Trustee
and Noteholders: Chase Manhattan Trust Company, N.A.
One Oxford Centre
000 Xxxxx Xx., Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telecopy No.: (000) 000-0000
Subordinated SEPR
Creditor: Les Miroirs, 00 Xxxxxxxxx X'Xxxxxx
00000, Xx Defense
Attention: Xxxxx-Xxxxxxx Xxxxxx
Telecopy: No. 00.0.0000.0000
By written notice, each party to this Agreement may change the address
to which notice is given to that party, provided that such changed notice shall
include a street address to which notices may be delivered by overnight courier
in the ordinary course on any Business Day.
Section 5.2 ADDITIONAL SENIOR NOTE INDEBTEDNESS.
Nothing herein contained shall obligate the Trustee and/or the
Noteholders to grant credit to, or continue financing arrangements with, the
Borrower.
Section 5.3 DELAY IN ENFORCEMENT, ETC.
No delay or failure on the part of the Trustee and/or the Noteholders
to exercise any of its rights or remedies hereunder or now or hereafter existing
at law or in equity or by statute or otherwise, or any partial or single
exercise thereof, shall constitute a waiver thereof. All such rights and
remedies are cumulative and may be exercised singly or concurrently and the
exercise of any one or more of them will not be a waiver of any other. No
modification to or waiver of any of the rights and remedies of the Trustee
and/or the Noteholders under this Agreement or otherwise, and no modification or
amendment of this Agreement, shall be deemed to be made by the Trustee and/or
the Noteholders unless the same shall be in writing, duly signed on behalf of
the Trustee and/or the Noteholders, and each such waiver, if any, shall apply
only with respect to the specific instance involved and shall in no way impair
the rights and remedies of the Trustee and/or the Noteholders hereunder in any
other respect at any other time. Without limiting the generality of the
foregoing, the Trustee may proceed against the Borrower with or without
proceeding against any guarantor, surety, indemnitor or any other Person who may
be liable for all or any part of the Obligations, may proceed against all or any
part of the Security, or may refrain taking all or any such action without
affecting the agreements and obligations of the parties to this Agreement.
Section 5.4 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the Subordinated Creditor and the
Borrower and the Subordinated Creditor's and the Borrower's successors and
assigns and shall inure to the
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benefit of the Trustee and the Noteholders and their respective successors and
assigns, and other holders of or obligees under the Senior Note Indebtedness.
Section 5.5 HEADINGS.
The paragraph headings of this Agreement are for convenience only, and
shall not limit or otherwise affect any of the terms hereof.
Section 5.6 APPLICABLE LAW; JURISDICTION.
5.6.1 APPLICABLE LAW.
The parties to this Agreement acknowledge and agree that this
Agreement shall be governed by the laws of the State, as if this Agreement had
been executed, delivered, administered and performed solely within the State
even though for the convenience and at the request of the Subordinated Creditor
or the Borrower, this Agreement may be executed elsewhere.
5.6.2 SUBMISSION TO JURISDICTION.
The parties to this Agreement irrevocably submit to the
jurisdiction of any state or federal court sitting in the State over any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Senior Note Documents. The parties to this Agreement irrevocably waive, to
the fullest extent permitted by law, any objection that either of them may now
or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
Final judgment in any such suit, action or proceeding brought in any such court
shall be conclusive and binding and may be enforced in any court in which the
applicable party is subject to jurisdiction, by a suit upon such judgment,
provided that service of process is effected upon the applicable party in one of
the manners specified in this Section or as otherwise permitted by applicable
laws.
5.6.3 APPOINTMENT OF TRUSTEE FOR SERVICE OF PROCESS.
The Subordinated Creditor and the Borrower hereby,
individually, irrevocably designate and appoint The Corporation Trust
Incorporated, Baltimore, Maryland, as its authorized Trustee to receive on its
behalf service of any and all process that may be served in any suit, action or
proceeding of the nature referred to in this Section in any state or federal
court sitting in the State. If such Trustee shall cease so to act, the
Subordinated Creditor or the Borrower, as the case may be, shall irrevocably
designate and appoint without delay another such Trustee in the State
satisfactory to the Trustee and shall promptly deliver to the Trustee evidence
in writing of such other Trustee's acceptance of such appointment and its
agreement that such appointment shall be irrevocable.
5.6.4 SERVICE OF PROCESS.
The parties to this Agreement hereby consent to process being
served in any suit, action or proceeding of the nature referred to in this
Section by (a) the mailing of a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, at the address designated in or
pursuant to Section 5.1 (Notices), and (b) serving a copy thereof upon the
Trustee, if any, designated and appointed as Trustee for service of process by
or pursuant to this
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Section. The parties to this Agreement irrevocably agree that such service (y)
shall be deemed in every respect effective service of process in any such suit,
action or proceeding, and (z) shall, to the fullest extent permitted by law, be
taken and held to be valid personal service. Nothing in this Section shall
affect the right of the Trustee to serve process in any manner otherwise
permitted by law or limit the right of the Trustee otherwise to bring
proceedings against the Subordinate Creditor or the Borrower, as the case may
be, in the courts of any jurisdiction or jurisdictions.
IN WITNESS THEREOF, the signatures and seals of the Subordinated
Creditor and of the Borrower are subscribed to this Agreement as of the date
first written above.
WITNESS/ATTEST: SOCIETE EUROPEENNE DE PRODUITS
REFRACTAIRES, Trustee
(Subordinated Creditor)
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxx (SEAL)
------------------------- -------------------------
Xxxxx Xxxxxxx Xxxxxx Xxxxxx
Attorney-in-Fact
WITNESS/ATTEST: UNIFRAX CORPORATION
(Borrower)
/s/ Xxxx Xxxx By: /s/ Xxxx X. Xxxx (SEAL)
------------------------- -------------------------
Xxxx Xxxx Xxxx X. Xxxx
Vice President
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EXHIBIT A
SUBORDINATED INDEBTEDNESS
-------------------------
AMOUNT EVIDENCE OF INDEBTEDNESS
------ ------------------------
Subordinated Promissory Note dated October 4, 2000 in the original principal
amount of One Million Five Hundred Thousand Dollars ($1,500,000) from the
Borrower to the Subordinated Creditor.
Subordinated Promissory Note dated October 4, 2000, from the Borrower to the
Subordinated Creditor in the original principal amount of Eight Million Dollars
($8,000,000) and as may be increased on each anniversary of the date of that
Subordinated Promissory Note commencing on the first anniversary thereof, by an
amount up to Four Million Dollars ($4,000,000) as long as the Borrower would be
permitted to issue to the Subordinated Creditor at such time a guaranty in such
amount of the Holdings Note under the terms of the Senior Indenture; provided
that notwithstanding the foregoing, the aggregate principal amount of the
Subordinated Note - Subordinated Creditor will (a) cease to so increase at such
time as the Holdings Note shall have been paid in full and (b) not, together
with the aggregate principal amount of the Holdings Note and the face amount of
the Unifrax Guarantees, be increased to an amount in excess of $28,500,000.
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EXHIBIT B
PERMITTED PAYMENTS
------------------
The Subordinated Creditor may receive payment of that portion of the
Subordinated Indebtedness consisting of timely payments of accrued and unpaid
interest commencing January 31, 2001.
The Subordinated Creditor may receive payment of that portion of the
Subordinated Indebtedness consisting of payment of principal and interest at
maturity (without giving effect to any acceleration of the maturity date
currently provided in the instruments and documents described in EXHIBIT A;
provided, however that payments under Section 2(c)(ii) of the Subordinated
Promissory Note dated October 4, 2000 in the original principal amount of One
Million Five Hundred Thousand Dollars ($1,500,000) from the Borrower to the
Subordinated Creditor will not be deemed prepayments).
In no event shall the Subordinated Creditor receive any prepayments of
the Subordinated Indebtedness.
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