First Waiver to Postpetition Credit Agreement among Special Metals Corporation, Affiliates, and Credit Lyonnais New York Branch

Summary

This agreement is a waiver to a postpetition credit agreement between Special Metals Corporation and its affiliates (as debtors in bankruptcy) and Credit Lyonnais New York Branch, acting as agent for the lenders. The lenders agree to waive a specific default related to revenue requirements for a set period, provided certain conditions are met, including payment of a waiver fee, bankruptcy court approval, and confirmation of key representations by the borrowers. The waiver is limited to the specified default and does not affect other terms of the original credit agreement.

EX-10.1 3 y63208exv10w1.txt FIRST WAIVER TO THE POSTPETETION CREDIT AGREEMENT Exhibit 10.1 FIRST WAIVER TO POSTPETITION CREDIT AGREEMENT This FIRST WAIVER, dated as of June 28, 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 INCO ALLOYS INTERNATIONAL, INC. (d/b/a Huntington Alloys), 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. 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 of SMC for the period beginning on April 1, 2002 and ending on May 31, 2002 to be not less than 38 $97,218,000. 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 entered by the Bankruptcy Court approving the payment of the Waiver Fee (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 that delivers to the Agent, by hand delivery or facsimile no later than 5:00 p.m., New York City time, on June 27, 2002, a counterpart of this Waiver executed by such Lender. Such fee (i) shall be received by the Agent ratably for account of, and shall be remitted by the Agent solely to, such Lenders and (ii) shall be fully earned and nonrefundable when paid. SECTION 2.4. 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: (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 Section 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 39 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 First 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 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 40 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. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 41 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/ Dennis L. Wanlass ------------------------------------------ Name: Dennis L. Wanlass ------------------------------------ Title: Vice President ----------------------------------- 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/ Dennis L. Wanlass ------------------------------------------ Name: Dennis L. Wanlass ------------------------------------ Title: Vice President of Inco ----------------------------------- 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/ Dennis L. Wanlass ------------------------------------------ Name: Dennis L. Wanlass ------------------------------------ Title: Vice President of SMC ----------------------------------- INCO ALLOYS INTERNATIONAL, INC. (D/B/A HUNTINGTON ALLOYS), a Delaware corporation, as debtor and debtor in possession on behalf of the estate created upon the commencement of the Bankruptcy Cases By: /s/ Dennis L. Wanlass ------------------------------------------ Name: Dennis L. Wanlass ------------------------------------ Title: Vice President ----------------------------------- 42 CREDIT LYONNAIS NEW YORK BRANCH, as Agent, as a Lender and as Issuing Bank By: /s/ John Charles van Essche ------------------------------------------ Name: John Charles van Essche ------------------------------------ Title: Vice President ----------------------------------- MANUFACTURERS AND TRADERS TRUST COMPANY, as Lender By: /s/ Michael P. Wallace ------------------------------------------ Name: Michael P. Wallace ------------------------------------ Title: Administrative Vice President ----------------------------------- THE BANK OF NOVA SCOTIA, as Lender By: /s/ Ronald Dooley ------------------------------------------ Name: Ronald Dooley ------------------------------------ Title: Director ----------------------------------- GENERAL ELECTRIC CAPITAL CORPORATION, as Lender By: /s/ Gregory Hong ------------------------------------------ Name: Gregory Hong ------------------------------------ Title: Duly Authorized Signatory ----------------------------------- 43