EXHIBIT 10.8
SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT dated as of October 18, 1996, among SPECIAL
METALS CORPORATION, a Delaware corporation (the "Debtor"), SOCIETE INDUSTRIELLE
DE MATERIAUX AVANCES, a societe anonyme organized under the laws of the Republic
of France (the "Subordinated Lender"), and CREDIT LYONNAIS NEW YORK BRANCH, a
New York-licensed branch of Credit Lyonnais, S.A., a banking corporation
organized and existing under the laws of the Republic of France, in its capacity
as agent (in said capacity, together with any successor thereto in said
capacity, herein called the "Agent") for the Lenders (the "Senior Lenders") and
Issuing Bank (the "Issuing Bank") party to the Credit Agreement referred to
below (the Agent, the Senior Lenders and the Issuing Bank herein collectively
called the "Senior Creditors" and each a "Senior Creditor").
RECITALS:
A. Concurrently herewith the Debtor and the Senior Creditors are
entering into a Credit Agreement dated as of the date hereof (as it may be
amended , supplemented or otherwise modified from time to time, herein called
the "Credit Agreement") providing for the making of loans by the Senior Lenders
to the Debtor (the "Senior Loans"), and the issuance of letters of credit by the
Issuing Bank for account of the Debtor (the "Senior Letters of Credit"), in the
amounts, and subject to the terms and conditions, specified in the Credit
Agreement.
B. The execution and delivery of this Subordination Agreement and
the subordination of the Subordinated Debt pursuant hereto constitute conditions
precedent to the obligation of the Senior Lenders to make Senior Loans and the
obligation of the Issuing Bank to issue Senior Letters of Credit pursuant to the
terms of the Credit Agreement.
C. The Subordinated Lender owns 48% of the outstanding shares of
voting stock of the Debtor's sole shareholder and will derive substantial
benefits from the credit being extended to the Debtor pursuant to the Credit
Agreement.
ACCORDINGLY, in consideration of the premises, and in order to
induce the Senior Creditors to execute and deliver the Credit Agreement, the
Senior Lenders to make and maintain the Senior Loans, and the Issuing Bank to
issue and maintain the Senior Letters of Credit, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Subordinated Lender and the Debtor hereby agree with the Senior Creditors as
follows:
1. Certain Definitions.
(a) Capitalized terms that are not defined herein have the
respective meanings ascribed to them in the Credit Agreement and, in addition,
the following terms have the following meanings:
"Cash Flow Support Agreement" means the Cash Flow Support Agreement
dated as of the date hereof, by the Debtor and the Subordinated Lender in favor
of the Senior Creditors.
"Cash Flow Support Note" means the Promissory Note dated the date
hereof made by the Debtor to the order of the Subordinated Lender in the
original principal amount of $6,000,000, for the purpose of evidencing loans
under the Cash Flow Support Agreement.
"Credit Agreement" has the meaning specified in Recital A.
"Creditor" means any Senior Creditor or the Subordinated Lender; and
"Creditors" means the Senior Creditors and the Subordinated Lender,
collectively.
"Creditor Proceeding" means, with respect to the Debtor, any
distribution of the assets, dissolution or winding-up, or total or partial
liquidation or reorganization, of the Debtor, whether voluntary or involuntary
or in bankruptcy, insolvency, arrangement, reorganization, rearrangement of
debts, receivership or similar proceedings or upon a general assignment for the
benefit of creditors or otherwise.
"Discretionary SIMA Loans" means (a) the outstanding principal
balance of any and all loans or other extensions of credit made by SIMA to
Special Metals prior to the date hereof, including without limitation the loans
evidenced by the Existing SIMA Note and the loans made under the Subordinated
Loan Agreement and Note dated as of December 15, 1994 and (b) the principal
balance of any and all loans made by SIMA to Special Metals from time to time
hereafter, other than the Mandatory SIMA Loans.
"Existing SIMA Note" means the Subordinated Note dated as of the
date hereof, made by the Debtor to the order of SIMA in the original principal
amount of US$6,500,000.
"Mandatory SIMA Loans" means the principal balance of any and all
loans made by SIMA to Special Metals from time to time under or pursuant to the
Cash Flow Support Agreement.
"Post-Petition Interest" means any interest accrued on the Senior
Debt after the commencement of a Creditor Proceeding with respect to the Debtor.
"Senior Credit Documents" means, collectively, the Credit Agreement,
the Senior Notes, the other Loan Documents referred to in the Credit Agreement,
and all other agreements, instruments and documents governing or relating to the
Senior Debt or any portion thereof.
"Senior Debt" means all indebtedness and other liabilities and
obligations of the Borrower under the Credit Agreement, any Senior Note or any
other Loan Document including, without limitation, (i) the obligation to repay
the Senior Loans in full when due, (ii) the obligation to pay interest on the
Senior Loans (including, without limitation, Post-Petition
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Interest) at the rates and on the dates specified in the Credit Agreement, (iii)
the obligation to pay the fees specified in the Credit Agreement in full when
due at the rates and on the dates specified therein or in the Fee Letter, (iv)
the obligation to reimburse the Issuing Bank in full for any payment made by it
under a Senior Letter of Credit as provided in the Credit Agreement, (v) the
obligation to Cash Collateralize the Senior Letters of Credit as provided in the
Credit Agreement, (vi) the obligation to indemnify the Senior Creditors as
provided in the Credit Agreement or any other Loan Document, (vii) the
obligation to pay costs and expenses as provided in the Credit Agreement or any
other Loan Document, (viii) the obligation to pay all other amounts specified in
the Credit Agreement or any other Loan Document and (ix) all extensions,
modifications, deferrals or renewals of any amount specified in clause (i)
through (viii) above.
"Senior Letters of Credit" has the meaning specified in Recital A.
"Senior Loans" has the meaning specified in Recital A.
"Senior Notes" means all promissory notes issued by the Debtor
pursuant to the Credit Agreement, as they may be amended, supplemented or
otherwise modified from time to time, and any notes or other evidences of
indebtedness issued in renewal of, or in exchange or substitution for, such
promissory notes.
"Subordinated Credit Documents" means, collectively, (i) the
Existing SIMA Note, (ii) the Cash Flow Support Agreement, (iii) the Cash Flow
Support Note, and (iv) all other agreements, instruments and documents governing
or relating to the Subordinated Debt or any portion thereof, in each case, as
said documents may be amended, supplemented or otherwise modified from time to
time, and including, in the case of any promissory notes, any notes or other
evidences of indebtedness issued in renewal of, or in exchange or substitution
for, such promissory notes.
"Subordinated Debt" means all indebtedness for borrowed money,
whether now existing or hereafter incurred, owing by the Debtor to the
Subordinated Lender including, without limitation, the indebtedness, liabilities
and obligations of the Debtor to the Subordinated Lender under the Subordinated
Credit Documents (including the obligation to repay any and all Discretionary
SIMA Loans and Mandatory SIMA Loans and to pay interest thereon), and all other
amounts from time to time payable by the Debtor under the Subordinated Credit
Documents, whether now existing or hereafter incurred, to the Subordinated
Lender, and all extensions, deferrals or renewals thereof.
(b) Unless otherwise expressly specified herein, defined terms
denoting the singular number shall, when in the plural form, denote the plural
number of the matter or item to which such defined terms refer, and vice-versa.
(c) Words of the neuter gender mean and include correlative words of
the masculine and feminine gender.
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(d) Section and Schedule headings used in this Agreement are for
convenience only and shall not affect the construction or meaning of any
provisions of this Agreement.
(e) Unless otherwise specified, the words "hereof", "herein",
"hereunder" and other similar words refer to this Agreement as a whole and not
just to the Section, subsection or clause in which they are used; and the words
"this Agreement" refer to this Subordination Agreement, as amended, modified or
supplemented from time to time.
(f) Unless otherwise specified, references to Sections, Recitals or
Schedules are references to Sections of, and Recitals and Schedules to, this
Agreement.
2. Subordination of Subordinated Debt.
(a) The Subordinated Debt shall be subordinate and subject in right
of payment, in all respects, to all Senior Debt. Except as provided in paragraph
2(b) hereof, until the indefeasible payment in full of the outstanding amount of
all Senior Debt, including, without limitation, the outstanding principal of,
and all accrued interest on, the Senior Loans and the LC Disbursements, and the
expiration or termination of the Commitments and all Senior Letters of Credit
(i) the Debtor shall make no payment in respect of, and the Subordinated Lender
shall not accept any payment from the Debtor on account of, the Subordinated
Debt or any portion thereof, (ii) the Debtor shall not purchase or otherwise
acquire, and the Subordinated Lender shall not sell to the Debtor, the
Subordinated Debt or any portion thereof, and (iii) the Debtor shall not permit
any of its assets to be applied to the satisfaction or acquisition of, and the
Subordinated Lender shall not resort to or have any recourse against any assets
of the Debtor to satisfy, the Subordinated Debt or any portion thereof.
(b) Anything in this Agreement to the contrary notwithstanding, so
long as immediately prior to and after giving effect thereto there shall exist
no Default or Event of Default under the Credit Agreement and the Debtor shall
be in compliance with the financial covenants set forth in the Credit Agreement,
the Debtor may (i) make payments or prepayments of principal in respect of any
Discretionary SIMA Loans (but not in respect of any Mandatory SIMA Loans) and
(b) pay interest on all Discretionary SIMA Loans and Mandatory SIMA Loans at a
rate per annum not exceeding the rate specified in the Subordinated Credit
Documents relating thereto. Nothing herein contained shall be deemed to permit
any payments by the Debtor or out of its assets in respect of the principal
amount of any Mandatory SIMA Loans prior to the indefeasible payment in full of
the Senior Debt and the expiration or termination of the Senior Letters of
Credit and the Commitments.
(c) Upon any payment or distribution of assets of the Debtor of any
kind or character, whether in cash, property or securities, to creditors of the
Debtor upon any Creditor Proceeding with respect to the Debtor (i) all
principal, interest and other amounts due or to become due upon all Senior Debt
shall first be indefeasibly paid in full before any payment is made by the
Debtor or out of its property on account of the Subordinated Debt and (ii) any
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payment or distribution of assets of the Debtor of any kind or character,
whether in cash, property or securities, to which the Subordinated Lender would
be entitled except for the provisions of this paragraph 2 shall be paid by the
Debtor or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other person making such payment or distribution, or by the relevant
Subordinated Lender if received by it, directly to the Agent (for distribution
to the Senior Creditors), to the extent necessary to pay all Senior Debt in full
after giving effect to any concurrent payment or distribution on the Senior
Debt, before any payment or distribution out of the property of the Debtor is
made on the Subordinated Debt. The Subordinated Lender agrees that in any
Creditor Proceeding with respect to the Debtor, the Agent, as long as any amount
of Senior Debt remains unpaid, shall have the right to vote in accordance with
the instructions of the Majority Lenders any claim representing any Subordinated
Debt on any matter on which creditors of the Debtor are entitled to vote
(including, without limitation, on the selection or appointment of a trustee or
receiver for the Debtor and on any plan of reorganization for the Debtor). The
Subordinated Lender further agrees that if it fails to file a claim for the
Subordinated Debt or any portion thereof in any such bankruptcy, reorganization,
receivership, arrangement or similar proceeding of the Debtor, the Agent, so
long as any amount of Senior Debt remains unpaid, shall have the right to do so
in the name of the Subordinated Lender upon 3 days' prior written notice to the
Subordinated Lender.
(d) If any payment or distribution of assets of the Debtor of any
kind or character, whether in cash, property or securities, shall be received by
the Subordinated Lender on account of the Subordinated Debt before all Senior
Debt is indefeasibly paid in full, which payment or distribution is inconsistent
with the provisions of this paragraph 2, such payment or distribution shall be
held in trust by the Subordinated Lender for the benefit of the Senior
Creditors, and shall be paid over or delivered to the Agent (for distribution to
the Senior Creditors) to the extent necessary to pay all Senior Debt in full,
after giving effect to any concurrent payment or distribution on the Senior
Debt.
(e) The Subordinated Lender and any receiver, trustee in bankruptcy,
liquidating trustee or other person making payments to creditors of the Debtor
pursuant to Section 2(b) or 2(d), may rely conclusively on any certification by
the Agent as to the outstanding amount of the Senior Debt, and the Agent may
relay conclusively on any certification of a holder of Senior Debt as to the
amount of Senior Debt owing to such holder.
3. Agent Appointed Attorney-in-Fact.
The Subordinated Lender hereby appoints the Agent as the
Subordinated Lender's attorney-in-fact, with full power of substitution, for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that any Senior Creditor may deem necessary or
advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Agent shall have the right and power, in the name of the Subordinated
Lender, to make, execute and acknowledge, publish, file, record and swear to the
execution, acknowledgment, filing and/or recordation, as applicable, of such
documents as the Senior Creditors, in their sole
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discretion, shall deem necessary, appropriate and/or advisable with respect
to the enforcement and administration of the Senior Debt and the furtherance of
the collection thereof.
4. Consent; Subordination Absolute.
(a) The Subordinated Lender hereby consents to the execution,
delivery and performance by the Debtor of the Senior Credit Documents to which
it is a party and the consummation of the transactions contemplated thereby, and
hereby acknowledges and confirms that such execution, delivery, performance and
consummation do not violate or constitute a default under any term, covenant or
condition of any Subordinated Credit Document or any other agreement, instrument
or document to which the Subordinated Lender is a party or which inures to its
benefit.
(b) No extension, renewal, amendment, modification, forbearance or
waiver of the Senior Debt or any portion thereof or of any terms of the Credit
Agreement or any other Senior Credit Document, no release, modification or
substitution of any collateral therefor, and no exercise of or failure to
exercise any right, power or remedy under or in respect of the Senior Debt or
any Senior Credit Document, shall affect, modify or impair the subordination
provided for herein or the rights of the Senior Creditors hereunder.
5. Representations and Warranties of the Subordinated Lender.
The Subordinated Lender hereby represents and warrants to the Agent
and the Senior Creditors that:
(a) The Subordinated Lender is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. The Subordinated Lender has full power and authority to execute
and deliver this Agreement, to subordinate the Subordinated Debt pursuant
hereto, and to incur and perform the obligations provided for herein.
(b) The execution, delivery and performance of this Agreement by the
Subordinated Lender, the subordination of the Subordinated Debt owing to the
Subordinated Lender pursuant hereto and the incurrence and performance of the
obligations provided for herein (i) have been duly authorized by all requisite
action of the Subordinated Lender, (ii) do not require the approval of the
stockholders of the Subordinated Lender, and (iii) will not (1) violate any law
or regulation or the certificate of incorporation or by-laws of the Subordinated
Lender, (2) violate or constitute (with due notice or lapse of time or both) a
default under any provision of any indenture, agreement, license or other
instrument to which the Subordinated Lender is a party or by which it or any of
its properties may be bound or affected, (3) violate any order of any court,
tribunal or governmental agency binding upon the Subordinated Lender or any of
its properties or (4) result in the creation or imposition of any lien or
encumbrance of any nature whatsoever upon any assets or revenues of the
Subordinated Lender.
(c) No authorizations, approvals and consents of, and no filings and
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registrations with, any governmental or regulatory authority or agency are
necessary for the execution, delivery or performance by the Subordinated Lender
of this Agreement or for the validity or enforceability hereof.
(d) This Agreement constitutes the legal, valid and binding
obligation of the Subordinated Lender, enforceable against the Subordinated
Lender in accordance with its terms.
(e) Schedule I accurately lists all of the agreements, instruments
and documents in effect on the date hereof which govern or relate to the
Subordinated Debt owing to the Subordinated Lender and correctly sets forth the
amount of Subordinated Debt owing to the Subordinated Lender outstanding on the
date hereof, the character of such Subordinated Debt, the interest rate
applicable thereto and the maturity thereof.
(f) The Subordinated Loan Documents to which the Subordinated Lender
is a party or which inure to its benefit are in full force and effect and no
default has occurred thereunder.
(g) To the Subordinated Lender's knowledge, the information,
schedules, exhibits and reports furnished by the Subordinated Lender or the
Debtor to the Agent or any other Senior Creditor in connection with the
negotiation and preparation of this Agreement did not contain any omissions or
misstatements of fact which would make the statements contained therein
misleading or incomplete in any material respect.
6. Representations and Warranties of the Debtor.
The Debtor hereby represents and warrants to the Agent and the
Senior Creditors that:
(a) The Debtor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Debtor has full
power and authority to execute and deliver this Agreement, to subordinate the
Subordinated Debt pursuant hereto, and to incur and perform the obligations
provided for herein.
(b) The execution, delivery and performance of this Agreement by the
Debtor and the incurrence and performance by it of the obligations provided for
herein (i) have been duly authorized by all requisite action of the Debtor, (ii)
do not require the approval of the stockholders of the Debtor, and (iii) will
not (1) violate any law or regulation or the certificate of incorporation or
by-laws of the Debtor, (2) violate or constitute (with due notice or lapse of
time or both) a default under any provision of any indenture, agreement, license
or other instrument to which the Debtor is a party or by which it or any of its
properties may be bound or affected, (3) violate any order of any court,
tribunal or governmental agency binding upon the Debtor or any of its properties
or (4) result in the creation or imposition of any lien or encumbrance of any
nature whatsoever upon any assets or revenues of the Debtor.
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(c) No authorizations, approvals and consents of, and no filings and
registrations with, any governmental or regulatory authority or agency are
necessary for the execution, delivery or performance by the Debtor of this
Agreement or for the validity or enforceability hereof.
(d) This Agreement constitutes the legal, valid and binding
obligation of the Debtor, enforceable against the Debtor in accordance with its
terms.
(e) Schedule I accurately lists all of the agreements, instruments
and documents in effect on the date hereof which govern or relate to the
Subordinated Debt and correctly sets forth the amount of Subordinated Debt
outstanding on the date hereof, the character of such Subordinated Debt, the
interest rate applicable thereto and the maturity thereof.
(f) To the Debtor's knowledge, the information, schedules, exhibits
and reports furnished by the Subordinated Lender or the Debtor to the Agent or
any other Senior Creditor in connection with the negotiation and preparation of
this Agreement did not contain any omissions or misstatements of fact which
would make the statements contained therein misleading or incomplete in any
material respect.
7. Covenants of Subordinated Lender.
The Subordinated Lender hereby agrees that, so long as the Debtor
may borrow, or request the issuance of Senior Letters of Credit, under the
Credit Agreement and until the Senior Debt has been indefeasibly paid in full
and all the Senior Letters of Credit have expired or been terminated, the
Subordinated Lender shall not, without the prior written consent of the Agent
(which consent shall be given or withheld in accordance with the instructions of
the requisite number of Senior Lenders specified in the Credit Agreement):
(a) Accept any payments or prepayments of the Subordinated Debt
owing to the Subordinated Lender by the Debtor or out of the Debtor's assets
(other than as permitted by paragraph 2(b) hereof);
(b) Permit the Subordinated Debt owing to the Subordinated Lender or
any portion thereof to be secured by any lien or security interest on any assets
of the Debtor;
(c) Take, or permit any of its Affiliates to take, any action to
enforce its rights and remedies relating to the Subordinated Debt or any portion
thereof against the Debtor, including, without limitation, any of the following
actions:
(i) accelerate the Subordinated Debt or any portion thereof or
require that the Subordinated Debt or any portion thereof be paid
prior to the stated maturity thereof or prior to any regularly
scheduled dates of payment, except as permitted by the Subordinated
Credit Documents (provided that payments in respect of the
Subordinated Debt shall be subject in all cases to the terms of and
the restrictions
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contained in this Agreement); or
(ii) commence any proceeding against the Debtor or against any
properties or assets of the Debtor, including, without limitation,
any proceeding under the Federal Bankruptcy Code or any other
bankruptcy, insolvency, reorganization, arrangement, liquidation,
dissolution, moratorium or similar law of the United States of
America or any other jurisdiction, or apply for a trustee, receiver
or custodian (however named) for all or a substantial part of the
property of the Debtor; or
(d) Modify or amend, or consent to the modification or amendment of,
or permit the Debtor to modify or amend, the Cash Flow Support Agreement.
(e) Contest the validity, perfection, priority or enforceability of
any lien or security interest granted to any Senior Creditor in any properties
or assets of the Debtor. The foregoing provisions of this Section 7(c) are
solely for the purpose of defining the relative rights of the holders of Senior
Debt on the one hand and the holders of Subordinated Debt on the other and shall
not limit or otherwise affect any rights which any holder of Subordinated Debt
may have against the Debtor under the terms of any agreement or instrument
executed in connection with the Subordinated Debt.
8. Covenants of the Debtor.
The Debtor hereby agrees that, so long as it may borrow or request
the issuance of Senior Letters of Credit under the Credit Agreement and until
the Senior Debt has been indefeasibly paid in full and all the Senior Letters of
Credit have expired or been terminated, the Debtor shall not, without the prior
written consent of the Agent (which consent shall be given or withheld in
accordance with the instructions of the requisite number of Senior Lenders
specified in the Credit Agreement):
(a) Pay, prepay or purchase any portion of the Subordinated Debt
(other than as permitted by Section 2(b).
(b) Permit the Subordinated Debt or any portion thereof to be
secured by any lien or security interest on any assets of the Debtor.
(c) Modify or amend, or consent to the modification or amendment of,
or permit the Subordinated Lender to modify or amend, the Cash Flow Support
Agreement.
9. Legend on Subordinated Notes.
The Subordinated Lender shall promptly cause a conspicuous legend to
be placed on each promissory note which evidences or may from time to time
hereafter evidence the Subordinated Debt or any portion thereof, to the
following effect:
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"This Note and the indebtedness evidenced hereby is subject to the
restrictions contained in a Subordination Agreement (as such
agreement may from time to time be amended, modified or
supplemented, the "Agreement") dated as of October 18, 1996, among
Special Metals Corporation, a Delaware corporation, Societe
Industrielle de Materiaux Avances, a societe anonyme organized under
the laws of the Republic of France and Credit Lyonnais New York
Branch, a New York-licensed branch of Credit Lyonnais, S.A., a
banking corporation organized and existing under the laws of the
Republic of France, in its capacity as agent for the Lenders and
Issuing Bank specified in the Subordination Agreement; and each
holder of this Note, by its acceptance hereof, shall be bound by the
Agreement",
and, if so requested by the Agent, shall deliver each such promissory note, as
so marked, to the Agent.
10. Subrogation.
Subject to the payment in full of the Senior Debt and the expiration
or termination of the Commitments under the Credit Agreement and the Senior
Letters of Credit issued thereunder, the holders of the Subordinated Debt shall
be subrogated to the rights of the holders of the Senior Debt to receive
payments or distributions of cash, property or securities of the Debtor made on
the Senior Debt, until the Subordinated Debt shall be paid in full. No payments
or distributions on the Subordinated Debt of any cash, property or securities
which any holder of Subordinated Debt pays or delivers to the Agent or any
holder of Senior Debt pursuant to the subordination provisions contained in
Section 2 shall be deemed to be a payment by the Debtor to or on account of the
Senior Debt.
11. Relationship Among Creditors.
Nothing contained in this Agreement or otherwise will in any event
be deemed to constitute any holder of Senior Debt the agent of the Subordinated
Lender for any purpose nor to create any fiduciary relationship between any such
holder of Senior Debt and the Subordinated Lender. No action or inaction with
respect to any collateral for Senior Debt; nor any amendment to the Credit
Agreement or any other Senior Credit Document; nor any exercise or non-exercise
of any right, power or remedy under or in respect of any of the Senior Debt or
any instrument or agreement relating to, securing or guaranteeing any of the
Senior Debt; nor any waiver, consent, release, indulgence, extension, renewal,
modification, delay or other action, inaction or omission in respect of any of
the Senior Debt or any instrument or agreement relating to, securing or
guaranteeing any of the Senior Debt will in any event give rise to any claim
against the Agent or any holder of Senior Debt or any officers, director,
employee or agent of such holder.
12. Cumulative Rights.
Each and every right granted to the Agent or any other Senior
Creditor hereunder
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or in connection herewith, or allowed it by law or equity, shall be cumulative
and may be exercised from time to time.
13. Waivers and Amendments.
No failure on the part of the Agent or any other Senior Creditor to
exercise, and no delay in exercising, and no course of dealing with respect to,
any right, power or remedy hereunder shall operate as a waiver thereof or of any
default hereunder, nor shall any single or partial exercise by the Agent or any
other Senior Creditor of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy
of the Agent or such other Senior Creditor. No amendment, modification or waiver
of any provision of this Agreement, nor any consent to any departure herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the party to be charged therewith, and then such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Subordinated Lender or
the Debtor in any case shall, of itself, entitle the Subordinated Lender or the
Debtor to any other or further notice or demand in similar or other
circumstances.
14. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PRINCIPLES OF
CONFLICT OF LAWS.
15. SUBMISSION TO JURISDICTION.
(A) THE DEBTOR AND THE SUBORDINATED LENDER HEREBY EXPRESSLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ALL FEDERAL AND STATE COURTS SITTING IN NEW
YORK COUNTY, STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THEIR RESPECTIVE OBLIGATIONS HEREUNDER AND THE
DEBTOR AND THE SUBORDINATED LENDER AGREES THAT ANY PROCESS OR NOTICE OF MOTION
OR OTHER APPLICATION TO ANY OF SAID COURTS OR A JUDGE THEREOF MAY BE SERVED UPON
IT WITHIN OR WITHOUT SUCH COURT'S JURISDICTION BY REGISTERED OR CERTIFIED MAIL
(RETURN RECEIPT REQUESTED) OR BY PERSONAL SERVICE, AT THE ADDRESS OF SUCH PARTY
SPECIFIED NEXT TO ITS SIGNATURE HERETO (OR AT SUCH OTHER ADDRESS AS SUCH PARTY
SHALL SPECIFY BY A PRIOR NOTICE IN WRITING TO THE AGENT).
(B) THE DEBTOR AND THE SUBORDINATED LENDER HEREBY IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUIT, ACTION OR PROCEEDING
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ARISING OUT OF OR RELATING TO THIS AGREEMENT BROUGHT IN ANY FEDERAL OR STATE
COURT SITTING IN NEW YORK COUNTY, STATE OF NEW YORK, AND HEREBY FURTHER
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(C) NOTWITHSTANDING THE FOREGOING, THE AGENT OR ANY OTHER SENIOR
CREDITOR MAY XXX THE DEBTOR OR THE SUBORDINATED LENDER IN ANY JURISDICTION WHERE
THE DEBTOR OR THE SUBORDINATED LENDER OR ANY OF THEIR RESPECTIVE ASSETS MAY BE
FOUND AND MAY SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
16. WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THE AGREEMENT AND AGREES THAT
ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
17. Expenses.
The Debtor agrees to pay all costs and expenses of the Agent or any
other Senior Creditor (including the reasonable fees and disbursements of
counsel) in connection with the preparation of this Agreement (subject, in the
case of the fees and disbursements of counsel relating to such preparation, to
the terms of the Fee Letter) and any amendment hereof and the enforcement of any
rights of the Agent, the Senior Creditors or any of them hereunder. The
Subordinated Lender agrees to pay all costs and expenses of the Agent or any
other Senior Creditor (including the reasonable fees and disbursements of
counsel) in connection with the enforcement of any rights of the Agent, the
Senior Creditors or any of them against the Subordinated Lender hereunder.
18. Termination; Payment in Full; Reinstatement.
(a) This Agreement is a continuing agreement and shall remain in
full force and effect so long as the Debtor may borrow or request the issuance
of Senior Letters of Credit under the Credit Agreement, or any Senior Letter of
Credit is outstanding, and until the indefeasible payment in full of the Senior
Debt.
(b) The Senior Debt shall not be deemed to have been indefeasibly
paid in full for purposes of this Agreement until all amounts owing thereon
(including, without limitation, all Post-Petition Interest, if any) shall have
been paid to the Senior Creditors, whether or not a claim for such amounts
(including a claim for such Post-Petition Interest) is enforceable, and any
applicable preference periods shall have expired.
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(c) If at any time all or any part of any payment of the Senior Debt
received by any Senior Creditor is or must be rescinded or returned to the
Debtor for any reason whatsoever (including, without limitation, by reason of
the insolvency, bankruptcy, or reorganization of the Debtor) this Agreement
shall be reinstated with respect to such payment so rescinded or returned as
though such payment had never been received by such Senior Creditor. The Debtor
will indemnify each Senior Creditor on demand for all reasonable costs and
expenses (including, without limitation, attorney's fees and disbursements)
incurred by it in connection with such rescission or return.
19. Assignments.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that the Agent shall not be required to recognize any assignment of Senior Debt
unless such assignment is permitted under and is accomplished in accordance with
Section 9.6 of the Credit Agreement. In the event the Senior Debt owing to any
Senior Creditor is acquired by any Person, the powers, benefits and obligations
of such Senior Creditor under this Agreement and the subordination provided for
herein shall, at the election of such Senior Creditor (and subject to the
proviso of the immediately preceding sentence) inure to such Person, and all
references herein to "Senior Creditors" shall include such Person to the extent
of the Senior Debt assigned to such Person. The Subordinated Lender shall not
transfer, sell or otherwise dispose of any portion of the Subordinated Debt
owing to it or of any promissory note evidencing any portion of the Subordinated
Debt owing to it, except to a Person who agrees to become a party hereto and to
be bound by all provisions hereof binding on the Subordinated Lender. If the
Subordinated Debt (or any portion thereof) is acquired by any Person, such
Person, with respect to the Subordinated Debt acquired by it, shall in any event
be subject and bound by the subordination provided for herein and all other
obligations of the Subordinated Lender hereunder.
20. Addresses for Notices, Etc.
All notices, requests, demands, instructions, directions and other
communications provided for hereunder shall be in writing (which term shall
include telecopied communications) and shall be sent by overnight courier,
telecopied or delivered to the applicable party at the address or telecopier
number specified for such party opposite its signature line below or, as to any
party, to such other address or telecopier number as such party shall specify by
a notice in writing to the other parties hereto. Each notice, request, demand,
instruction, direction or other communication provided for hereunder shall be
deemed delivered (i) if by overnight courier, one Business Day (or, in the case
of any party hereto that has indicated an address for notices that is located
outside the United States, two Business Days) after being deposited with the
overnight courier, addressed to the applicable party at its address set forth
above, (ii) if by hand, when delivered to the applicable party at such address,
and (iii) if by telecopy, when sent to the applicable party at such telecopier
number.
21. Severability.
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Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render such provision unenforceable in any
other jurisdiction.
22. Benefit of Agreement.
The provisions of this Agreement are solely for the benefit of the
parties hereto and are intended to regulate their rights and obligations among
themselves and said provisions will not limit, enlarge or in any way affect the
obligations of the Debtor to any Person not a party hereto. No provision of this
Agreement shall, as between the Debtor and the Subordinated Lender, impair the
absolute right of the Subordinated Lender to payment of the Subordinated Debt
owing to it (subject to the rights of the Senior Creditors under this
Agreement), it being understood that the subordination provisions hereof are
intended to define the rights of the Senior Creditors on the one hand and the
Subordinated Lender on the other.
23. Integration Clause. This Agreement constitutes the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both oral and written, with respect to the subject matter hereof.
24. Further Assurances.
The Debtor and the Subordinated Lender agree to execute and deliver
to the Senior Creditors, at the expense of the Debtor and the Subordinated
Lender, such further instruments, and to take such further action, as the Senior
Creditors may at any time or times request in order to carry out the provisions
and intent of this Agreement.
25. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, all of which when taken together
shall constitute but one and the same agreement.
26. Agency Provisions.
The Agent is acting hereunder in its capacity as agent for the
Lenders and the Issuing Bank pursuant to Article 8 of the Credit Agreement and
is entitled to all the rights, benefits, protections and indemnities provided to
it in said Article 8 in connection with any actions taken by it hereunder.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute this Agreement as of the date first above
written.
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Debtor:
Address: SPECIAL METALS CORPORATION
0000 Xxxxxx Xxxxxxxxxx Xxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000 By:______________________________
Attention: Xxxxxx X. Xxxxxxx Name:
Telecopier: (000) 000-0000 Title:
Subordinated Lender:
Address: SOCIETE INDUSTRIELLE DE MATERIAUX
____________________________ AVANCES
____________________________
____________________________
Attention: _________________ By:______________________________
Telecopier: ________________ Name:
Title:
Agent for Senior Creditors:
Address: CREDIT LYONNAIS NEW YORK BRANCH, as
Agent
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx By:______________________________
Telecopier: (000) 000-0000 Name:
Title:
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