EXHIBIT 10.4
FOURTH WAIVER TO POSTPETITION CREDIT AGREEMENT
This FOURTH WAIVER, dated as of October 31, 2002 (this "Waiver"),
refers to that certain Postpetition Credit Agreement, dated as of April 26, 2002
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the financial institutions from time to time party thereto
(such financial institutions, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), CREDIT LYONNAIS NEW YORK BRANCH, as a Lender, as
Issuing Bank with respect to the Letters of Credit, and as agent for the Lenders
and the Issuing Bank thereunder (the "Agent"), SPECIAL METALS CORPORATION, a
Delaware corporation, in its capacity as a debtor and a debtor in possession on
behalf of the estate created upon the commencement of the Bankruptcy Cases
("SMC"), A-1 WIRE TECH, INC., an Illinois corporation, in its capacity as a
debtor and a debtor in possession on behalf of the estate created upon the
commencement of the Bankruptcy Cases ("Wire"), SPECIAL METALS DOMESTIC SALES
CORPORATION, a Delaware corporation, in its capacity as a debtor and a debtor in
possession on behalf of the estate created upon the commencement of the
Bankruptcy Cases ("Sales"), and HUNTINGTON ALLOYS CORPORATION, formerly known as
Inco Alloys International, Inc., a Delaware corporation, in its capacity as a
debtor and a debtor in possession on behalf of the estate created upon the
commencement of the Bankruptcy Cases ("Alloys," and together with SMC, Wire and
Sales, each a "Borrower" and collectively, the "Borrowers"). Capitalized terms
used and not defined in this Waiver shall have the meanings given such terms in
the Credit Agreement.
RECITALS
A. WHEREAS, the Borrowers have requested that the Lenders agree,
subject to the conditions and upon the terms set forth in this Waiver, to waive
an Event of Default occurring under subsection 9.1(a) of the Credit Agreement;
and
B. WHEREAS, the Lenders are willing to agree to such waiver, subject
to the conditions and on the terms set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
WAIVER
SECTION 1.1. Waiver. (a) Subject to the conditions and upon the
terms set forth in this Waiver and in reliance on the representations and
warranties of the Borrowers set forth in this Waiver, the Lenders hereby waive
compliance by Borrowers with the requirements of subsection 9.1(a) of the Credit
Agreement, only insofar as it requires the Consolidated Revenue
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of SMC for the period beginning on April 1, 2002 and ending on September 30,
2002 to be not less than $282,500,000.
(b) This Waiver shall be effective only through November 15, 2002,
after which date it shall terminate and be of no further force and effect
without any action by the Borrowers, the Lenders, or the Agent.
(c) This Waiver is limited solely to the matters set forth in this
Section 1.1, as at the date stated herein, and does not constitute a waiver of
any other Default or Event of Default or compliance with any other term or
condition of the Loan Documents.
ARTICLE II
CONDITIONS PRECEDENT
The effectiveness of this Waiver shall be subject to the
satisfaction of each of the following conditions precedent:
SECTION 2.1. Waiver. Each of the Agent and the Required Lenders
shall have executed this Waiver and the Borrowers shall have delivered to the
Agent duly executed counterparts of this Waiver.
SECTION 2.2. Approval of the Bankruptcy Court. The Borrowers shall
have delivered to the Agent a true and correct copy of the final order(s)
entered by the Bankruptcy Court approving the payment of the Waiver Fee and the
Adequate Protection Payment (each as defined below) by the Borrowers to the
Agent on behalf of the Lenders.
SECTION 2.3. Waiver Fee. The Borrowers shall have paid to the Agent
a waiver fee (the "Waiver Fee") equal to 0.125% applied to sum of the aggregate
(a) outstanding Revolving Credit Loans, plus (b) Letters of Credit Outstanding,
plus (c) Unused Revolving Credit Commitments of each Lender. Such fee (i) shall
be received by the Agent ratably for account of, and shall be remitted by the
Agent, to the Lenders and (ii) shall be fully earned and nonrefundable when
paid.
SECTION 2.4. Adequate Protection Payment. The Borrowers shall have
paid to the administrative agent (the "Prepetition Agent") under the Existing
Credit Agreement an adequate protection payment (the "Adequate Protection
Payment") in the amount of $2,500,000. Such payment (i) shall be received by the
Prepetition Agent and applied to repay the Deemed DIP Loans ratably for account
of the lenders under the Existing Credit Agreement and (ii) shall be fully
earned and nonrefundable when paid. The Adequate Protection Payment shall be
deemed to have been used to repay Prepetition Indebtedness for purposes of the
proviso to the first sentence of Section 5.1(b) of the Credit Agreement and
shall therefore apply dollar-for-dollar against the $30,000,000 basket specified
therein.
SECTION 2.5. Representations and Warranties. Each Borrower shall
have confirmed to the Agent, by the signature of a Responsible Officer of such
Borrower below, that on and as of the date of this Waiver:
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(a) each of the representations and warranties made by the Borrowers
or their Subsidiaries in or pursuant to the Loan Documents is true and correct
in all material respects (except that any such representation or warranty that
is expressly stated as being made only as of a specified earlier date shall be
true and correct in all material respects as of such earlier date);
(b) other than the Event of Default that is the subject of this
Waiver, no Default or Event of Default has occurred and is continuing; and
(c) none of the Bankruptcy Cases has been dismissed or converted to
Chapter 7 of the Bankruptcy Code, no Person has filed an application for an
order dismissing any Borrower's Bankruptcy Case or converting any Borrower's
Bankruptcy Case to a case under Chapter 7 of the Bankruptcy Code, and no trustee
under Chapter 7 or Chapter 11 of the Bankruptcy Code or responsible officer or
examiner with powers beyond the duty to investigate and report, as set forth in
Sections 1106(a)(3) and (4) of the Bankruptcy Code has been appointed in any of
the Bankruptcy Cases. No application has been filed by any Borrower for the
approval of any other superpriority administrative claim in any Bankruptcy Case
which is pari passu with or senior to the claims of the Agent and/or any Lender
against the Borrowers (and, other than the Carve-Out, no such claim or lien has
arisen) and the Final Order is in full force and effect and has not been stayed,
modified, amended, reversed, rescinded or vacated.
ARTICLE III
MISCELLANEOUS
SECTION 3.1. Execution of this Waiver. This Waiver is executed and
shall be construed as the Fourth Waiver to the Postpetition Credit Agreement,
and, as provided in the Credit Agreement, this Waiver forms a part thereof and
is a Loan Document.
SECTION 3.2. Waiver. This Waiver shall not constitute an amendment
or waiver of or consent to any provision of the Credit Agreement or any other
Loan Document not expressly referred to herein and shall not be construed as an
amendment, waiver or consent to any action on the part of the Borrowers that
would require an amendment, waiver or consent of the Agent or the Lenders except
as expressly stated herein. The execution, delivery and performance by the
parties hereto of this Waiver shall not constitute a waiver, forbearance or
other indulgence with respect to any Default or Event of Default now existing or
hereafter arising, except as expressly set forth herein. Except as specifically
modified pursuant to the terms of this Waiver, the terms and conditions of the
Credit Agreement and the other Loan Documents remain in full force and effect.
Nothing herein shall limit in any way the rights and remedies of the Agent and
the Lenders under the Credit Agreement and the other Loan Documents.
SECTION 3.3. Counterparts; Integration; Effectiveness. This Waiver
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Waiver constitutes the
entire contract among the parties hereto relating to the subject matter hereof
and supersedes any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Upon the effectiveness of this
Waiver as set forth in Article II hereof, this Waiver shall be binding upon and
inure to the benefit of the parties hereto and, subject to and in accordance
with SECTION 12.6 of the Credit Agreement, their respective
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successors and assigns. Delivery of an executed counterpart of a signature page
of this Waiver by facsimile shall be as effective as delivery of a manually
executed counterpart of this Waiver.
SECTION 3.4. Ratification. Subject to the waiver provided hereby,
the Loan Documents shall continue to be in full force and effect and are hereby
in all respects ratified and confirmed.
SECTION 3.5. Severability. Any provision of this Waiver held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 3.6. Expenses. The Borrowers agree to pay or reimburse the
Agent for all of its reasonable out-of-pocket costs and expenses incurred in
connection with this Waiver, any other documents prepared in connection herewith
and the transactions contemplated hereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Agent.
SECTION 3.7. Governing Law. THIS WAIVER AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS THEREOF THAT WOULD
DIRECT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION, ALL TO THE EXTENT NOT
PREEMPTED BY THE FEDERAL BANKRUPTCY LAWS OF THE UNITED STATES; PROVIDED, THAT
THE LENDERS AND AGENT SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
SECTION 3.8. Headings. Article and Section headings used herein are
for convenience of reference only, are not part of this Waiver and shall not
affect the construction of, or be taken into consideration in interpreting, this
Waiver.
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
SPECIAL METALS CORPORATION,
a Delaware corporation, as debtor and debtor in
possession on behalf of the estate created upon the
commencement of the Bankruptcy Cases
By: /s/ T. Xxxxx Xxxx
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Name: T. Xxxxx Xxxx
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Title: President
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A-1 WIRE TECH, INC.,
an Illinois corporation, as debtor and debtor in
possession on behalf of the estate created upon the
commencement of the Bankruptcy Cases
By: /s/ T. Xxxxx Xxxx
------------------------------------------------
Name: T. Xxxxx Xxxx
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Title: President of SMC 100% Owner
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SPECIAL METALS DOMESTIC SALES CORPORATION,
a Delaware corporation, as debtor and debtor in
possession on behalf of the estate created upon the
commencement of the Bankruptcy Cases
By: /s/ T. Xxxxx Xxxx
------------------------------------------------
Name: T. Xxxxx Xxxx
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Title: President of SMC 100% Owner
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HUNTINGTON ALLOYS CORPORATION,
(F/K/A INCO ALLOYS INTERNATIONAL, INC.),
a Delaware corporation, as debtor and debtor in
possession on behalf of the estate created upon the
commencement of the Bankruptcy Cases
By: /s/ T. Xxxxx Xxxx
------------------------------------------------
Name: T. Xxxxx Xxxx
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Title: President
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CREDIT LYONNAIS NEW YORK BRANCH,
as Agent, as a Lender and as Issuing Bank
By: /s/ Xxxx-Xxxxxxx Van Essche
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Name: Xxxx-Xxxxxxx Van Essche
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Title: Vice President
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MANUFACTURERS AND TRADERS TRUST COMPANY,
as Lender
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Administrative Vice President
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THE BANK OF NOVA SCOTIA,
as Lender
By: /s/ Xxx Xxxxxx
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Name: Xxx Xxxxxx
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Title: Director
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GENERAL ELECTRIC CAPITAL CORPORATION,
as Lender
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Duly Authorized Signatory
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