SUBORDINATED LOAN AGREEMENT
This Subordinated Loan Agreement, dated as of December 17, 1999, is
between SPECIAL METALS CORPORATION, a Delaware corporation ("Borrower") and
SOCIETE INDUSTRIELLE DE MATERIAUX AVANCES, a societe anonyme organized under the
laws of the Republic of France ("SIMA").
RECITALS:
A. Borrower is a party to a Senior Secured Credit Agreement dated as of
October 28, 1998 among Borrower, the Lenders, the Issuing Bank and the Agent (as
those terms are defined therein), which Credit Agreement has been amended by a
First Amendment dated as of March 31, 1999 and a Second Amendment dated as of
June 8, 1999 (as amended, supplemented or otherwise modified from time to time,
herein called the "Credit Agreement") providing for the making of loans by the
Lenders to Borrower, and the issuance of letters of credit by the Issuing Bank
for the account of Borrower, in the amounts, and subject to the terms and
conditions, specified in the Credit Agreement.
B. Borrower has requested that the Lenders waive certain existing
defaults under the Credit Agreement and modify certain of the provisions of the
Credit Agreement. Borrower, Lenders and the Agent are entering into a Third
Amendment to Credit Agreement and Limited Waiver dated as of December 29, 1999
pursuant to which certain provisions of the Credit Agreement will be waived or
amended (the "Third Amendment"). Lenders and the Agent are willing to enter into
the Third Amendment only upon the condition that Borrower arrange for additional
capital in the form of subordinated loans.
X. XXXX is a major shareholder of Borrower and is willing to make
subordinated loans to Borrower upon the terms and conditions set forth in this
Subordinated Loan Agreement.
NOW, THEREFORE, , in consideration of the premises, and in order to
induce the Lenders and the Agent to enter into the Third Amendment to the Credit
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, SIMA and Borrower hereby agree 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:
"Additional Advances" has the meaning specified in Section
2(b) hereof.
"Borrower" has the meaning specified in the preamble hereto.
"Converted Loan" has the meaning specified in Section 4.
"Credit Agreement" has the meaning specified in Recital A.
"LIBOR" means the three-month London Interbank Offered Rate
published in The Wall Street Journal (or if not so published, as quoted by
Credit Lyonnais New York Branch) on the last Business Day of each calendar
quarter), provided that, until adjusted as herein provided, LIBOR shall mean the
London Interbank Offered Rate published in The Wall Street Journal on the
Business Day immediately preceding the date hereof.
"Maturity Date" means July 28, 2006.
"Revolving Loan" has the meaning specified in Section 3(a).
"Revolving Note" has the meaning specified in Section 3(a).
"Senior Claims" has the meaning specified in the Subordination
Agreement.
"SIMA" has the meaning specified in the preamble hereto.
"SIMA Commitment" has the meaning specified in Section 3.
"SIMA Commitment Period" means the period commencing on the
date hereof and ending on August 15, 2001.
"SIMA Loans" means the Term Loan (including any Additional
Advance and any Converted Loan and any interest added to the principal of the
Term Loan) and the Revolving Loans made hereunder.
"SIMA Notes" means the Revolving Note and the Term Note.
"Subordination Agreement" means the Debt Subordination
Agreement dated as of the date of the Third Amendment among Borrower, SIMA and
the Agent.
"Term Loan" has the meaning specified in Section 2(a).
"Term Note" has the meaning specified in Section 2(a).
"Third Amendment" has the meaning specified in Recital B.
(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) Section headings used in this Agreement are for convenience only and
shall not affect the construction or meaning of any provisions of this
Agreement.
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(d) 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, paragraph or clause in which they are used; and
the words "this Agreement" refer to this Subordinated Loan Agreement, as
amended, modified or supplemented from time to time.
(e) Unless otherwise specified, the term "including", whenever used in
this Agreement, shall be deemed to mean "including without limitation".
2. Term Loan.
(a) Subject to the terms and conditions of this Agreement,
SIMA agrees to make a loan (the "Term Loan") to the Borrower on or before
January 14, 2000 in the principal amount of Twenty Million Dollars ($20,000,000
(US)). The Term Loan may be advanced in one or more installments, all of which
shall be evidenced by a single promissory note (the "Term Note") of the Borrower
in substantially the form of Exhibit A hereto, dated the date of the first
advance of the Term Loan, and payable to the order of SIMA.
(b) At the request of Borrower, SIMA may (but shall not be obligated to)
make additional Term Loan advances to Borrower ("Additional Advances") in excess
of $20,000,000. The proceeds of each Additional Advance shall be used solely (i)
to finance Capital Expenditures in excess of amounts permitted under clauses (a)
through (g) of subsection 9.8 of the Credit Agreement or (ii) to pay dividends
on Preferred Stock to the extent permitted under the Credit Agreement. Each
Additional Advance shall be (x) added to the principal of the Term Loan, (y)
subject to all the terms hereof applicable to the Term Loan, and (z) evidenced
by the Term Note.
(c) SIMA shall endorse on the schedule attached to the Term Note the
amount of each advance (including any Additional Advance) made by it hereunder,
the amount of interest added to the principal of the Term Loan and the amount of
any payments or prepayments received by it in respect of principal on the Term
Loan. Any such endorsement shall constitute prima facie evidence of the accuracy
of the information so recorded, absent manifest error. SIMA's failure to make
any such notation shall not affect the obligation of Borrower to repay the
unpaid principal amount of and all accrued interest on the Term Loan.
3. Revolving Loans.
(a) Subject to the terms and conditions of this Agreement, SIMA hereby
irrevocably and unconditionally agrees to make loans (collectively, the
Revolving Loans) to Borrower from time to time during the SIMA Commitment Period
in an aggregate principal amount at any one time outstanding not exceeding
Thirty Million Dollars ($30,000,000 (US)) (the "SIMA Commitment"). Revolving
Loans may be borrowed at any time during the SIMA Commitment Period, but may be
repaid or prepaid only in accordance with the provisions of Section 6 hereof.
The Revolving Loans made by SIMA shall be evidenced by a single promissory note
(the "Revolving Note") in substantially the form of Exhibit B, dated the date
hereof and payable to the order of SIMA. SIMA shall endorse on the schedule
attached to the Revolving Note the amount of each Revolving Loan made by it
hereunder and the amount of any payments or prepayments received by it in
respect of principal or interest on each such
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Revolving Loan. Any such endorsement shall constitute prima facie evidence of
the accuracy of the information so recorded, absent manifest error. SIMA's
failure to make any such notation shall not affect the obligation of Borrower to
repay the unpaid principal amount of and all accrued interest on the Revolving
Loans.
(b) SIMA acknowledges and agrees that its obligation to make SIMA Loans
to Borrower pursuant to paragraph (a) of this Section 3 shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any setoff, counterclaim, recoupment, defense or other right
which SIMA may have against Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of an Event of Default hereunder
(other than an Event of Default under Section 10(c) hereof) or under the Credit
Agreement; (iii) any adverse change in the condition (financial or otherwise) of
Borrower or any of its Subsidiaries; (iv) any breach of this Agreement by
Borrower; or (v) any other circumstance, happening or event whatsoever, whether
or not similar to any of the foregoing.
(c) At the request of Borrower, SIMA may (but shall have no obligation
to) make Revolving Loans to Borrower in excess of the SIMA Commitment. Each such
Revolving Loan in excess of the SIMA Commitment shall be subject to all of the
terms hereof applicable to the Revolving Loans and shall be evidenced by the
Revolving Note.
(d) Each Revolving Loan shall be made within five Business Days after
SIMA receives a request therefor from Borrower, specifying the amount and
borrowing date of such loan. SIMA shall make the proceeds of each Revolving Loan
available to Borrower on the requested borrowing date for such Loan, by a wire
transfer in U.S. dollars to the account designated by Borrower.
(e) During the SIMA Commitment Period, neither SIMA nor Borrower shall
have the right to cancel or reduce the SIMA Commitment (except as provided
herein) or to reduce the SIMA Commitment Period without the prior written
approval of the Required Lenders, and any such attempted cancellation or
reduction without such consent shall be null and void.
4. Conversion of Revolving Loans. If in any quarter through the first
quarter of 2001 Borrower's Consolidated EBITDA is less than the minimum amount
required under the Credit Agreement (after giving effect to the Third
Amendment), then a portion of the outstanding Revolving Loans automatically will
be converted into, and added to the principal of, the Term Loan effective as of
the last day of such quarter (the principal balance of the amount so converted
hereafter referred to as a "Converted Loan"). The amount to be converted for
each quarter will be equal to the difference between (i) Borrower's projected
EBITDA for the 12-month period ending on the last day of that quarter, as set
forth below:
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Projected
Quarter EBITDA
------- ------
Fourth 1999 $30,190,000
First 2000 30,570,000
Second 2000 30,240,000
Third 2000 39,940,000
Fourth 2000 54,930,000
First 2001 67,980,000
and (ii) Borrower's actual Consolidated EBITDA for the same 12-month period. If
the outstanding balance of the Revolving Loans is less than the amount to be
converted, Borrower shall borrow, and SIMA shall lend, additional Revolving
Loans until the full amount required to be converted has been converted or the
SIMA Commitment from SIMA been fully funded and remains outstanding. SIMA shall
endorse on the schedule attached to the Term Note the amount of each Converted
Loan made by it hereunder and the amount of any payments or prepayments received
by it in respect of principal or interest on each such Converted Loan. Any such
endorsement shall constitute conclusive evidence of the accuracy of the
information so recorded, absent manifest error. SIMA's failure to make any such
notation shall not affect the obligation of Borrower to repay the unpaid
principal amount of and all accrued interest on the Converted Loans. The SIMA
Commitment shall be permanently reduced by the principal amount of each
Converted Loan added to the principal of the Term Loan.
5. Interest.
(a) The unpaid principal amount of the Term Loan (including any
Additional Advance and any Converted Loan) and each Revolving Loan will accrue
interest for the period from (and including) the borrowing date for such Loan or
Additional Advance to the date such Loan shall be paid in full, at a rate per
annum equal to LIBOR plus 1.00%. The interest rate on each Loan will adjust as
of the first day of each January, April, July and October based upon LIBOR as of
the immediately preceding Business Day.
(b) Accrued interest on each SIMA Loan will be paid in kind by addition
to the principal of the Term Loan on the last day of each calendar quarter. All
amounts so added to principal of the Term Loan shall begin to accrue interest at
the rate provided for herein as of the date so added to principal.
6. Repayment and Prepayment of SIMA Loans.
(a) The Term Loan shall be payable in full on the Maturity Date. Except
as permitted by subparagraph (c) below, Borrower shall not make any payment or
prepayment in respect of the principal amount of the Term Loan prior to the
Maturity Date.
(b) The Revolving Loans will be due on the Maturity Date. Prior to the
Maturity Date, Borrower may pay principal of the Revolving Loans, at such times
and in such amounts as Borrower may elect, but only if and to the extent such
payments are
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permitted under the Subordination Agreement. All amounts repaid under this
subparagraph (b) may be reborrowed at any time prior to the end of the SIMA
Commitment Period.
(c) Notwithstanding anything herein to the contrary, Borrower may prepay
the SIMA Loans, in whole or in part, at any time the Senior Claims have been
indefeasibly paid in full in cash and none of the holders of Senior Claims are
obligated to extend credit to Borrower or any subsidiary of Borrower.
(d) All payments due to SIMA under or pursuant to this Agreement and the
SIMA Notes and permitted to be paid under the Subordination Agreement shall be
made by Borrower when due in U.S. Dollars and in immediately available funds at
such address as SIMA may designate in writing from time to time.
7. Letter of Credit. Pursuant to the Third Amendment, SIMA has agreed to
deliver to the Agent a standby letter of credit in the face amount of
$30,000,000 (the "Letter of Credit") in order to secure the performance of
SIMA's obligations to make Revolving Loans under this Agreement. If SIMA fails
to make available to the Borrower a Revolving Loan requested by Borrower
(whether requested pursuant to Section 3 or Section 4 hereof) within ten days of
such request, SIMA acknowledges and agrees that the Agent, upon notification
thereof by Borrower, is required to make a drawing under the Letter of Credit in
the amount of the Revolving Loan which Borrower had requested and is obligated
to remit the proceeds of such drawing to Borrower. Borrower and SIMA acknowledge
that all funds received by the Agent upon any drawing under the Letter of Credit
and remitted to Borrower shall be deemed to be a Revolving Loan made by SIMA
under this Agreement and shall be subject to all the terms of this Agreement
applicable to Revolving Loans.
8. Representations and Warranties of Borrower. Borrower hereby
represents and warrants to SIMA that:
(a) Borrower has full power and authority to execute and deliver this
Agreement and the SIMA Notes, to borrow hereunder and to incur and perform the
obligations provided for herein or therein.
(b) The execution, delivery and performance of this Agreement and the
SIMA Notes by Borrower, the borrowings by it hereunder, and the incurrence and
performance of the obligations provided for herein or therein (i) have been duly
authorized by all requisite corporate action of Borrower, (ii) do not require
the approval of the stockholders of Borrower, and (iii) will not (a) violate any
law or regulation or the certificate of incorporation or by-laws of Borrower,
(b) 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 Borrower is a party or by which it or any of its properties may be bound
or affected, (c) violate any order of any court, tribunal or governmental agency
binding upon Borrower or any of its properties, or (d) result in the creation or
imposition of any lien or encumbrance of any nature whatsoever upon any assets
or revenues of Borrower.
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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 Borrower of this
Agreement or the SIMA Notes or for the validity or enforceability hereof or
thereof.
(d) This Agreement and the SIMA Notes constitute the legal, valid and
binding obligations of Borrower, enforceable against Borrower in accordance with
their respective terms.
9. Representations and Warranties of SIMA. SIMA hereby represents and
warrants to Borrower that:
(a) SIMA is a societe anonyme duly organized, validly existing and in
good standing under the laws of the Republic of France. SIMA has full power and
authority to execute and deliver this Agreement and to incur and perform the
obligations provided for herein.
(b) The execution, delivery and performance of this Agreement by SIMA
and the incurrence and performance by it of the obligations provided for herein,
including its extensions of credit to Borrower (i) have been duly authorized by
all requisite corporate action of SIMA, (ii) do not require the approval of the
stockholders of SIMA, and (iii) will not (a) violate any law or regulation or
the organizational documents of SIMA, (b) 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 SIMA is a party or by which it
or any of its properties may be bound or affected, (c) violate any order of any
court, tribunal or governmental agency binding upon SIMA or any of its
properties, or (d) result in the creation or imposition of any lien or
encumbrance of any nature whatsoever upon any assets or revenues of SIMA.
(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 SIMA of this Agreement
or for the validity or enforceability hereof.
(d) This Agreement constitutes the legal, valid and binding obligation
of SIMA, enforceable against SIMA in accordance with its terms.
10. Events of Default. The occurrence of any of the following events
shall constitute an event of default hereunder:
(a) At any time after the Maturity Date, Borrower shall fail to make
payment of any amounts owing under this Agreement or the SIMA Notes within ten
(10) days following the due date thereof;
(b) An Event of Default shall have occurred under the Credit
Agreement and the Lenders shall have declared amounts due thereunder to be due
and payable; or
(c) (i) Borrower shall commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors seeking
to have an order for relief entered with
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respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its assets, or Borrower shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against Borrower any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief for any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for period of sixty (60) days; or (iii) there shall be
commenced against Borrower any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within sixty (60) days from the entry thereof, or (iv)
Borrower shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii)
or (iii) above; or (v) Borrower shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due.
Upon the occurrence of one of the events specified above, all amounts
due under this Agreement and the SIMA Notes shall automatically be accelerated
and become payable in full, subject to the terms of the Subordination Agreement,
and SIMA's obligation to make further Revolving Loans hereunder shall be
terminated.
11. Confirmation of Subordination. Borrower and SIMA hereby acknowledge
and agree that all of the obligations of Borrower hereunder and under the SIMA
Notes, the indebtedness evidenced by the SIMA Notes and all claims SIMA may now
or at any time hereafter have against Borrower or any of its assets arising out
of or relating to this Agreement are subordinated to the Senior Claims as
provided in the Subordination Agreement and that payment of such obligations and
indebtedness is subject to the restrictions set forth in the Subordination
Agreement.
12. Waivers and Amendments.
(a) No failure on the part of SIMA 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 SIMA of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. 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, signed by all the
parties hereto and consented to in writing by the Agent with the approval of the
Required Lenders under the Credit Agreement, and then such amendment,
modification, waiver or consent shall be effective only in the specific instance
and for the purpose for which given.
(b) Borrower hereby waives presentment, protest, demand, notice of
dishonor or default, and notice of any kind except as herein required with
respect to this Agreement, the SIMA Notes or the performance of its obligations
under this Agreement or the SIMA Notes.
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13. 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.
14. Submission to Jurisdiction.
(a) Each of SIMA and Borrower hereby expressly submits to the 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 the SIMA Notes or their respective obligations hereunder or
thereunder and each of them 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 other parties hereto).
(b) Each of SIMA and Borrower hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the SIMA Notes
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.
15. 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 this
Agreement or the SIMA Notes and agrees that any such dispute shall be tried
before a judge sitting without a jury.
16. Expenses. Borrower agrees to pay all costs and expenses of SIMA
(including the reasonable fees and disbursements of counsel) in connection with
the enforcement of any rights of SIMA hereunder or under the SIMA Notes
17. Termination; Amendment. This Agreement is a continuing agreement and
shall remain in full force and effect so long as Borrower may borrow hereunder
or under the Credit Agreement or request the issuance of letters of credit under
the Credit Agreement and until the indefeasible payment in full of the Senior
Claims and of all obligations of Borrower to SIMA hereunder. This Agreement may
not be amended, modified or terminated without the prior written consent of (a)
SIMA and Borrower and (b) the Agent (acting upon instructions of the Required
Lenders under the Credit Agreement); provided that the consent of the Agent
shall not be required after the Senior Claims has been indefeasibly paid in full
and the Commitments under the Credit Agreement have expired.
18. 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 neither Borrower nor SIMA shall transfer, sell or
otherwise dispose of any of its obligations hereunder or, in the case of SIMA,
any portion of the loans made by it to Borrower hereunder,
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without the prior written consent of the Agent (acting upon instructions of the
Required Lenders under the Credit Agreement).
19. 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 delivered to 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.
20. Severability. 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.
21. 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.
Delivery of an executed signature page to this Agreement by facsimile shall be
as effective as delivery of a manually signed counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute this Agreement as of the date first above written.
Address: SPECIAL METALS CORPORATION
0000 Xxxxxx Xxxxxxxxxx Xxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000 By _____________________________________
Attention: Xxxxxx X. Xxxxxxx Name: ___________________________________
Telecopier: (000)000-0000 Title: __________________________________
Address: SOCIETE INDUSTRIELLE DE MATERIAUX
00 Xxx xx Xxxxxxxx AVANCES
92200 Neuilly Sur Seine
Cedex, France
By: _____________________________________
Attention: Xxxxxxxx Xxxxxxxx Name: ___________________________________
Telecopier: 01133140882180 Title: __________________________________
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EXHIBIT A
EXHIBIT A
FORM OF TERM NOTE
The indebtedness and all obligations evidenced or represented
hereby, and certain other Subordinated Claims, are postponed,
subordinated and junior in right of payment to Senior Claims,
as such capitalized terms are defined in a Debt Subordination
Agreement dated December 29, 1999, executed and delivered for
the benefit of the holders of such Senior Claims by the maker
hereof and by Societe Industrielle de Materiaux Advances, a
societe anonyme organized under the laws of the Republic of
France. The provisions of said Debt Subordination Agreement
are hereby incorporated herein, as if set forth at length
herein.
New Hartford, New York
December ___, 1999
For value received, SPECIAL METALS CORPORATION, a Delaware corporation
(the "Borrower,"), promises to pay to the order of SOCIETE INDUSTRIELLE DE
MATERIAUX AVANCES, a societe anonyme organized under the laws of the Republic of
France ("SIMA"), on the Maturity Date, the principal amount of Twenty Million
Dollars ($20,000,000 (US)) plus the principal amount of all Additional Advances
and Converted Loans, if any, made by SIMA to the Borrower pursuant to the
Subordinated Loan Agreement referred to below that are then outstanding. The
unpaid principal amount of this Note shall accrue interest from the date of each
advance hereunder is made until it is repaid in full, at the rate specified in
the Subordinated Loan Agreement. Accrued interest on this Note and the Revolving
Note (as defined in the Subordinated Loan Agreement) will be paid in kind by
addition to the principal of the Term Loan on the last day of each calendar
quarter. All amounts so added to principal shall begin to accrue interest at the
rate provided in the Subordinated Loan Agreement as of the date so added to
principal.
All such payments under this Note shall be made in lawful money of the
United States of America and in immediately available funds in accordance with
the terms of the Subordinated Loan Agreement at the office of SIMA specified in
the Subordinated Loan or in accordance with wiring instructions specified by
SIMA.
All Additional Advances and all Converted Loans made by SIMA and all
payments of the principal thereof shall be recorded by SIMA on the schedule
attached hereto or any continuation thereof. Any such recordation shall
constitute prima facie evidence of the existence and amounts of the obligations
of the Borrower so recorded; provided, however, that the failure of SIMA to make
any such recordation shall not affect the obligations of the Borrower hereunder
or under the Subordinated Loan Agreement.
This Note is the Term Note referred to in the Subordinated Loan
Agreement dated as of December 17, 1999, between the Borrower and SIMA (as the
same may be amended, restated, supplemented or otherwise modified from time to
time with the approval of the Agent, the
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"Subordinated Loan Agreement") and is entitled to the benefits thereof. Terms
defined in the Subordinated Loan Agreement are used herein with the same
meanings. Reference is made to the Subordinated Loan Agreement for provisions
for the prepayment hereof and the acceleration of the maturity hereof. The
Borrower hereby waives presentment, demand, protest and all other notices of any
kind in connection with this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PRINCIPLES OF CONFLICT
OF LAWS.
SPECIAL METALS CORPORATION
By: ______________________________________
Name:
Title:
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SCHEDULE TO PROMISSORY NOTE
Date of Principal Amount Outstanding Notation
Loan Amount Repaid Balance By
---- ------ ------ ------- --
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EXHIBIT B
EXHIBIT A
FORM OF REVOLVING NOTE
The indebtedness and all obligations evidenced or represented
hereby, and certain other Subordinated Claims, are postponed,
subordinated and junior in right of payment to Senior Claims,
as such capitalized terms are defined in a Debt Subordination
Agreement dated December 29, 1999, executed and delivered for
the benefit of the holders of such Senior Claims by the maker
hereof and by Societe Industrielle de Materiaux Advances, a
societe anonyme organized under the laws of the Republic of
France. The provisions of said Debt Subordination Agreement
are hereby incorporated herein, as if set forth at length
herein.
New Hartford, New York
December ___, 1999
For value received, SPECIAL METALS CORPORATION, a Delaware corporation
(the "Borrower,"), promises to pay to the order of SOCIETE INDUSTRIELLE DE
MATERIAUX AVANCES, a societe anonyme organized under the laws of the Republic of
France ("SIMA"), on the Maturity Date, the principal amount of all Revolving
Loans made by SIMA to the Borrower pursuant to the Subordinated Loan Agreement
referred to below. The unpaid principal amount of each such Revolving Loan shall
accrue interest from the date such Revolving Loan is made until it is repaid in
full, at the rate specified in the Subordinated Loan Agreement. Accrued interest
will be paid in kind by addition to the principal of the Term Loan (as defined
in the Subordinated Loan Agreement) on the last day of each calendar quarter.
All amounts so added to principal of the Term Loan shall begin to accrue
interest thereunder at the rate provided in the Subordinated Loan Agreement as
of the date so added to principal.
All such payments under this Note shall be made in lawful money of the
United States of America and in immediately available funds in accordance with
the terms of the Subordinated Loan Agreement at the office of SIMA specified in
the Subordinated Loan or in accordance with wiring instructions specified by
SIMA.
All Revolving Loans made by SIMA and all payments of the principal
thereof shall be recorded by SIMA on the schedule attached hereto or any
continuation thereof. Any such recordation shall constitute prima facie evidence
of the existence and amounts of the obligations of the Borrower so recorded;
provided, however, that the failure of SIMA to make any such recordation shall
not affect the obligations of the Borrower hereunder or under the Subordinated
Loan Agreement.
This Note is the Revolving Note referred to in the Subordinated Loan
Agreement dated as of December 17, 1999, between the Borrower and SIMA (as the
same may be amended, restated, supplemented or otherwise modified from time to
time with the approval of the Agent, the "Subordinated Loan Agreement") and is
entitled to the benefits thereof. Terms defined in the Subordinated Loan
Agreement are used herein with the same meanings. Reference is made to the
Subordinated Loan Agreement for provisions for the prepayment hereof and the
acceleration
15
of the maturity hereof. The Borrower hereby waives presentment, demand, protest
and all other notices of any kind in connection with this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PRINCIPLES OF CONFLICT
OF LAWS.
SPECIAL METALS CORPORATION
By: ______________________________________
Name:
Title:
16
SCHEDULE TO PROMISSORY NOTE
Date of Principal Amount Outstanding Notation
Loan Amount Repaid Balance By
---- ------ ------ ------- --
17
