Exhibit 10.2
EXECUTION VERSION
SUBSCRIPTION AGREEMENT
AGREEMENT, dated as of October 7, 2003, by and among MacKay Shields
LLC, Citicorp Mezzanine III, L.P., TCW Shared Opportunity Fund II, L.P., Shared
Opportunity Fund IIB LLC, TCW Shared Opportunity Fund IV, L.P., TCW Shared
Opportunity Fund IVB, L.P., AIMCO CDO, Series 2000-A, TCW High Income Partners,
Ltd., TCW High Income Partners II, Ltd., Metropolitan Life Insurance Company and
Exis Differential Holdings, Ltd. (collectively, together with their respective
Affiliates, the "INVESTORS" and each an "INVESTOR"), and ACP Holding Company, a
Delaware corporation ("ACP HOLDING"), Neenah Foundry Company, a Wisconsin
corporation (the "COMPANY"), and the Subsidiary Guarantors listed on the
signature page hereto.
WITNESSETH:
WHEREAS, on August 5, 2003 (the "FILING DATE"), ACP Holding, NFC
Castings, Inc., a Delaware corporation ("NFC CASTINGS"), the Company and the
Company's Subsidiaries filed voluntary petitions in the United States Bankruptcy
Court in the Southern District of New York (the "BANKRUPTCY COURT") under
chapter 11 (the "CHAPTER 11 CASES") of Title 11 of the United States Code (the
"BANKRUPTCY CODE"), and will seek Bankruptcy Court approval of the plan of
reorganization substantially in the form attached hereto as Exhibit A (the
"PLAN");
WHEREAS, on August 28, 2003, the Bankruptcy Court entered an order (a)
approving the Commitment Letter (as hereinafter defined) entered into between
the Company and the Investors on June 30, 2003 solely with respect to Investors
who were not existing equity holders of the Company as of the Filing Date, and
(b) providing that the Company and the Investors could enter into a subscription
agreement and any related documents without further approval of the Bankruptcy
Court;
WHEREAS, the Plan provides that the holders of allowed unsecured claims
in Class 6, including the Investors (such claim holders, including the
Investors, eligible to purchase Units under the Plan being referred to as the
"PARTICIPATING HOLDERS"), shall have the right, but not the obligation, to
purchase in accordance with Article IV and related definitions of the Plan (as
amended in accordance with Section 5.06 herein) (the "RIGHTS OFFERING") an
aggregate of 119,996 Units (the "MAXIMUM UNITS"), at a purchase price per Unit
of $916.70 (the "UNIT PURCHASE PRICE");
WHEREAS, to ensure the purchase of all Maximum Units, each of the
Investors has determined to (i) exercise in full its right under the Rights
Offering to purchase its pro rata share of the Maximum Units and (ii) subscribe
for any and all Units not purchased by the Participating Holders (other than the
Investors) up to the maximum number of Units set forth opposite the name of such
Investor on Schedule I hereto.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. (a) The following terms, as used herein, have
the following meanings:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise and the terms
"controlling" and "controlled" shall have meanings correlative to the foregoing.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close. Any event the scheduled occurrence of which would fall on a day that is
not a Business Day shall be deferred until the next succeeding Business Day.
"COMMITMENT LETTER" means the standby funding commitment letter
(including all exhibits and annexes thereto), dated June 30, 2003, among the
Investors and the Company.
"COMMON STOCK" means shares of Common Stock, par value $.01 per share
of Reorganized ACP Holding.
"CONFIDENTIALITY AGREEMENT" means the confidentiality agreement entered
into among the Investors and the Company dated as of May 13, 2003.
"CREDIT AGREEMENT" means the Credit Agreement, dated the Closing Date,
among the Company, certain of the Subsidiary Guarantors party thereto, the
lenders from time to time party to such agreement, Fleet Capital Corporation, as
Agent and Fleet Securities, Inc., as Arranger, including any related notes,
collateral documents, letters of credit and documentation and guarantees and any
appendices, exhibits or schedules to any of the foregoing, as well as any and
all of such agreements (and any other agreements that refinance any and all such
agreements), as may be amended, restated, modified or supplemented from time to
time, or renewed, refunded, refinanced, restructured, replaced, repaid or
extended from time to time (including increases in principal amount), whether
with the original agents and lenders or with other agents or lenders.
"EBITDA" means the sum of the net income of the Company and its
consolidated Subsidiaries, plus interest, taxes, depreciation and amortization,
each as reflected on the Company's income statement for the applicable
measurement period.
"EFFECTIVE DATE" means the date on which the Plan becomes Effective.
"GOVERNMENTAL AUTHORITY" means any nation or government , any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"INDENTURES" means the Senior Secured Notes Indenture and the Senior
Subordinated Notes Indenture
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"LIEN" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. For the purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any property or
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such property or asset.
"LIEN SUBORDINATION AGREEMENT" means that certain Lien Subordination
Agreement, dated the Closing Date, by and among the Company, certain of the
Company's Subsidiaries and the other parties thereto, as amended (including any
amendments and restatements thereof), supplemented or otherwise modified from
time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect on the
business, condition (financial or otherwise), operation, performance or
properties of the Representing Persons taken as a whole, (ii) a material adverse
effect on the rights and remedies of the Investors under the Transaction
Documents, or (iii) the material impairment of the ability of the Representing
Persons (taken as a whole) to perform their obligations hereunder or under any
Transaction Document.
"NEW FACILITIES" means the Term Loan and the Revolver.
"OPTION" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock of such Person or
(ii) receive or exercise any benefits or rights similar to any rights enjoyed by
or accruing to the holder of shares of capital stock of such Person, including
any rights to participate in the equity or income of such Person or to
participate in or direct the election of any directors or officers of such
Person or the manner in which any shares of capital stock of such Person are
voted.
"PERMITTED LIENS" means Liens which do not materially detract from the
value of any property (whether real, personal, tangible or intangible) of ACP
Holdings, NFC Castings, the Company or the Company's Subsidiaries or materially
interfere with any present or intended use of such property.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"PLAN TERM SHEET" means the Terms of Plan of Reorganization attached as
Exhibit B to the Commitment Letter.
"REGISTRATION RIGHTS AGREEMENTS" means the Senior Secured Notes
Registration Rights Agreement, the Senior Subordinated Notes Registration Rights
Agreement and the Warrant Registration Rights Agreement.
"REORGANIZED ACP HOLDING" means ACP Holding, as reorganized pursuant to
the Chapter 11 Cases.
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"REORGANIZED DEBTOR" means each of ACP Holding, the Company and the
Subsidiary Guarantors, each as reorganized pursuant to the Chapter 11 Cases.`
"REPRESENTING PERSONS" means ACP Holding, the Company and the
Subsidiary Guarantors.
"RESTATED BYLAWS" means the amended and restated bylaws of the ACP
Holding which is in the form attached hereto as Exhibit B.
"RESTATED CERTIFICATE OF INCORPORATION" means the amended and restated
certificate of incorporation of ACP Holding to be filed with the Secretary of
State of the State of Delaware, which is in the form attached hereto as Exhibit
C.
"REVOLVER" means the revolving credit facility extended to the Company
as part of the New Facilities under the Credit Agreement.
"SENIOR SECURED NOTES" means the Company's 11% Senior Second Secured
Notes due 2010 to be issued pursuant to the terms of the Plan.
"SENIOR SECURED NOTES INDENTURE" means the Indenture, dated the Closing
Date, among the Company the Subsidiary Guarantors and The Bank of New York, as
trustee, governing the Senior Secured Notes.
"SENIOR SECURED NOTES REGISTRATION RIGHTS AGREEMENT" means the
Registration Rights Agreement, dated the Closing Date, among the Company, the
Subsidiary Guarantors and the Investors, substantially in the form attached
hereto as Exhibit D-1.
"SENIOR SUBORDINATED NOTES" means the Company's 13% Senior Subordinated
Notes due 2013 to be issued pursuant to the terms of the Plan.
"SENIOR SUBORDINATED NOTES INDENTURE" means the Indenture, dated the
Closing Date, among the Company the Subsidiary Guarantors and The Bank of New
York, as trustee, governing the Senior Subordinated Notes.
"SENIOR SUBORDINATED NOTES REGISTRATION RIGHTS AGREEMENT" means the
Registration Rights Agreement, dated the Closing Date, among the Company, the
Subsidiary Guarantors and the Investors, substantially in the form attached
hereto as Exhibit D-2.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement, dated the
Closing Date, among ACP Holding and the stockholders party thereto.
"SUBSIDIARY" of any Person means any entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by such Person.
"SUBSIDIARY GUARANTEES" means the guarantees on the terms set forth in
the Indentures by a Subsidiary Guarantor of the Company's obligations with
respect to the Senior Secured Notes and the Senior Subordinated Notes, as
applicable.
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"SUBSIDIARY GUARANTOR" means each Subsidiary which is organized under
the laws of the United States of America or any state thereof or the District of
Columbia, and executes and delivers a Subsidiary Guarantee pursuant to the terms
of the Indentures.
"TERM LOAN" means the term loan made to the Company as part of the New
Facilities under the Credit Agreement.
"TERMINATION EVENT" means any of the events described in Section
10.1(e).
"TRANSACTION DOCUMENTS" means this Agreement, the Indentures, the
Senior Secured Notes (including related Subsidiary Guarantees), the Senior
Subordinated Notes (including related Subsidiary Guarantees), the Warrant
Agreement, the Warrants, the Stockholders Agreement, the Registration Rights
Agreements, the Restated Certificate of Incorporation, the Restated Bylaws, the
Credit Agreement, the New Facilities, the Lien Subordination Agreement and any
other agreement to be entered into in accordance with the terms hereof.
"UNIT" means a unit of securities consisting of (i) $1,000 in principal
amount of Senior Secured Notes of the Company and related Subsidiary Guarantees,
and (ii) Warrants to purchase 285.41256 shares of Common Stock of ACP Holding
(subject to rounding down or up to the nearest whole number).
"WARRANTS" means warrants, to purchase an aggregate of 38,000,000
shares of Common Stock of Reorganized ACP Holdings, which are to be issued
pursuant to the Warrant Agreement.
"WARRANT AGREEMENT" means the Warrant Agreement, dated the Closing
Date, by and between ACP Holding and The Bank of New York, as warrant agent.
"WARRANT REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated the Closing Date, among ACP Holding and the Investors,
substantially in the form attached hereto as Exhibit D-3.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
TERM SECTION
---- -------
ACP Holding Preamble
Automatic Stay 10.01
Bankruptcy Code Recitals
Bankruptcy Court Recitals
Chapter 11 Cases Recitals
Closing 2.02(a)
Closing Date 2.02(a)
Company Preamble
Damages 9.02
Electing Investor 2.01(b)
Expense Obligations 2.02(c)
Expenses 2.02(c)
Filing Date Recitals
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TERM SECTION
---- -------
Indemnification Obligations 9.02(a)
Indemnified Parties 9.03
Indemnifying Parties 9.03
Information 3.10
Investor(s) Preamble
Material Adverse Change 3.06
Maximum Units Recitals
NFC Castings Recitals
Nonpurchased Units 2.01(b)
Nonpurchasing Investor 2.01(b)
Participating Holders Recitals
Plan Recitals
Representatives 9.02
Rights Offering Recitals
Securities Act 4.07
Third Party Claims 9.03
Unit Purchase Price Recitals
Unsubscribed Units 2.01(a)
ARTICLE II
PURCHASE AND SALE
Section 2.01 Purchase and Subscription of Units; Standby
Commitment; Subscription Price. (a) In accordance with the Commitment
Letter and the applicable provisions of the Plan (i) each of ACP
Holding and the Company hereby agrees to cause the Rights Offering to
be made in accordance with the applicable provisions of the Plan and
(ii) each of the Investors hereby agrees to (A) exercise in full its
right under the Rights Offering to purchase its pro rata share of the
Maximum Units and (B) on the basis of the representations, warranties,
covenants and agreements contained in this Agreement, subscribe for and
purchase its pro rata share (based on the percentage set forth opposite
the name of such Investor on Schedule I hereto) of any and all Units
not purchased by the Participating Holders (other than the Investors)
(the "UNSUBSCRIBED UNITS") up to the maximum number of Units set forth
opposite the name of such Investor on Schedule I hereto, at a purchase
price per Unit equal to the Unit Purchase Price. The aggregate Unit
Purchase Price will be payable in immediately available funds at the
Closing in the manner provided in Section 2.02.
(b) The obligations of the Investors to subscribe for the Units
are several, and not joint, obligations. No Investor guarantees, or has any
other obligation relating to, the obligation of any other Investor to purchase
any Units hereunder. Notwithstanding the foregoing, in the event any Investor (a
"NONPURCHASING INVESTOR") fails, for any reason, to purchase any of the Units to
be purchased by such Nonpurchasing Investor hereunder (the "NONPURCHASED
UNITS"), the other Investors shall have the right, but not the obligation, to
purchase such Nonpurchased Units. Each Investor, who elects to purchase such
Nonpurchased Units (an "ELECTING INVESTOR"), shall have the right to purchase
such number of Nonpurchased Units calculated by multiplying the number of
Nonpurchased Units by a fraction the numerator of which is the maximum number of
Units such Electing Investor has agreed to purchase
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hereunder as set forth opposite the name of such Electing Investor on Schedule I
hereto and the denominator of which is the maximum number of Units which all
Electing Investors have agreed to purchase hereunder as set forth opposite the
names of such Electing Investors on Schedule I hereto. In the event Electing
Investors elect to purchase all of the Nonpurchased Units, any failure of any
condition to ACP Holding's and the Company's obligations arising as a result of
any Nonpurchasing Investor's breach of this Agreement will be deemed waived and
ACP Holding and the Company shall have no right to terminate this Agreement
based on such breach.
(c) The Investors acknowledge that on June 30, 2003, the Company
paid to the Investors $1,100,000, representing 20% of the total Commitment Fee
(as defined and provided for in the Commitment Letter). The Company agrees that
such $1,100,000 shall not be refundable nor form the basis of any defense,
setoff, or recoupment claim under any circumstances, regardless of whether the
transactions contemplated by this Agreement and the other Transaction Documents
are consummated.
Section 2.02 Closing; Expenses. (a) The closing of the
subscription for, and purchase of, the Units under this Agreement (the
"CLOSING") will take place at the offices of Goldberg, Kohn, Bell,
Black, Rosenbloom & Moritz, Ltd., 55 East Monroe Street, Chicago,
Illinois 60603, at 10:00 A.M., local time, on the Effective Date,
provided that each condition set forth in Article VIII has been
satisfied or waived, unless another time, date or place is agreed to in
writing by ACP Holding, the Company and the Investors (the "CLOSING
DATE").
(b) At the Closing,
(i) the Reorganized Debtors will deliver to each
Investor one or more (as designated by such Investor) duly
executed certificates to be dated the Closing Date evidencing
(A) the Senior Secured Notes and related Subsidiary Guarantees
and (y) the Warrants; provided that, any Investor may notify
the Company in writing prior to such issuance, but not later
than two (2) Business Days before the Closing Date, that it
desires such certificates to be issued in other denominations
or registered in the name or names of any of its Affiliates or
designees, in which case the certificates shall be issued in
the denominations and registered in the name or names
specified in such notice;
(ii) Each Investor shall pay the aggregate Unit
Purchase Price for the Units purchased thereby by wire
transfer of immediately available funds to such account as ACP
Holding and the Company may reasonably direct by written
notice delivered to the Investors by ACP Holding and the
Company at least two (2) Business Days before the Closing
Date; and
(iii) The Company shall pay to each Investor the
balance of the Commitment Fee payable to such Investor in the
amount set forth opposite the name of such Investor on
Schedule I hereto, by wire transfer of immediately available
funds to such account as such Investor may reasonably direct
by written notice delivered to the Company by such Investor at
least two (2) Business Days before the Closing Date.
(c) At the Closing, the Company shall reimburse each Investor
for its reasonable actual out-of-pocket fees and expenses (the "EXPENSES")
incurred by or on behalf of the Investors in connection with the negotiation,
preparation, execution and delivery of the Transaction Documents (including any
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commitment letter and term sheets preceding the Transaction Documents and
documents prepared in connection with the Chapter 11 Cases) and any and all
definitive documentation or other acts relating hereto or thereto, including,
but not limited to, the actual reasonable fees and expenses of counsel,
accountants and/or consultants to the Investors and the reasonable and
documented fees and expenses incurred by the Investors in connection with any
due diligence (including reasonable fees and expenses payable to counsel,
accountants and/or consultants), the aggregate amount of which each Investor
shall notify the Company no later than two (2) Business Days prior to the
Closing Date. The obligations of the Company under this paragraph (c) (the
"EXPENSE OBLIGATIONS") shall remain effective whether or not any of the
transactions contemplated by this Agreement are consummated and notwithstanding
the termination of the Commitment Letter and shall, subject to approval of the
Bankruptcy Court, be binding upon the Company as reorganized pursuant to the
Chapter 11 Cases in the event that any plan of reorganization of the Company is
consummated. The Investors acknowledge that the Company has previously advanced
to the Investors $604,603.68 to be used by them to fund Expenses in connection
with the matters described in this paragraph (c).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE REPRESENTING PERSONS
Each of ACP Holding and the Company represents and warrants
with respect to the Representing Persons and NFC Castings, and each of
the Company's Subsidiaries represents and warrants with respect to
itself, jointly and severally, to each Investor as of the date hereof
and as of the Closing Date that:
Section 3.01 Corporate Existence and Power. Each of ACP
Holding, NFC Castings, the Company and each of the Company's
Subsidiaries is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization (to the extent such
concepts are recognized in such jurisdiction) and has all requisite
corporate power and authority necessary to carry on its business as now
conducted. Each of ACP Holding, NFC Castings, the Company and each of
the Company's Subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where
the failure to be so qualified would have a Material Adverse Effect.
The Company has heretofore delivered to the Investors true and complete
copies of the certificates of incorporation and bylaws (or analogous
organizational documents) of each of ACP Holding, NFC Castings, the
Company and each of the Company's Subsidiaries as currently in effect.
Section 3.02 Corporate Authorization. Subject to the approval
of the Bankruptcy Court, each of the Representing Persons has all
corporate right, power and authority to enter into this Agreement and
each of the other Transaction Documents to which it is a party, to
consummate the transactions contemplated hereby and thereby and to
comply with the terms, conditions and provisions hereof and thereof.
The execution and delivery by each of the Representing Persons of this
Agreement and of each other Transaction Document to which it is a party
is, and the issuance, sale and delivery of the Units by the Reorganized
Debtors and the compliance by the Representing Persons (or the
Reorganized Debtors, as the case may be) with each of the provisions of
this Agreement and of each other Transaction Document to which they (or
the Reorganized Debtors, as the case may be) are a party will, upon the
approval of the Bankruptcy Court, be (i) within the corporate power and
authority of the Representing Persons (or the Reorganized Debtors, as
the case may be) and (ii) have been duly authorized by all requisite
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corporate action of the Representing Persons (or the Reorganized
Debtors, as the case may be). This Agreement has been, and each of the
other Transaction Documents to which the Representing Persons (or the
Reorganized Debtors, as the case may be) are a party, when executed and
delivered by the Representing Persons (or the Reorganized Debtors, as
the case may be) will be, duly and validly executed and delivered by
the Representing Persons (or the Reorganized Debtors, as the case may
be), and this Agreement constitutes, and each of the other Transaction
Documents when executed and delivered by the Representing Persons (or
the Reorganized Debtors, as the case may be) will constitute, upon
approval of the Bankruptcy Court, a valid and binding agreement of the
Representing Persons (or the Reorganized Debtors, as the case may be),
enforceable against the Representing Persons (or the Reorganized
Debtors, as the case may be) in accordance with its terms, except as
such enforcement may be limited by bankruptcy, reorganization,
insolvency and other similar laws affecting the enforcement of
creditors' rights generally and limitations imposed by general
principles of equity.
Section 3.03 Capital Stock. (a) Upon consummation of the Plan,
the authorized capital stock of Reorganized ACP Holding will consist
solely of 100,000,000 shares of Common Stock. After giving effect to
the consummation of the Plan and this Agreement, Reorganized ACP
Holding will have 42,000,000 (subject to rounding to the nearest whole
number pursuant to the Plan) shares of Common Stock issued and
outstanding and such shares will be duly authorized, validly issued,
fully paid and nonassessable. Except for this Agreement and as
contemplated under the Plan, as of the Effective Date there shall be no
outstanding Options with respect to any capital stock of Reorganized
ACP Holding, NFC Castings, the Company or any of the Company's
Subsidiaries. The delivery of a certificate or certificates at the
Closing representing the Units in the manner provided in Section
2.02(b) will transfer to each Investor good and valid title in such
Units, free and clear of all Liens created by or imposed on the
Representing Persons.
(b) The Warrants, when issued and allotted in accordance with the
provisions of the Plan and this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable and free of any pre-emptive rights or any
Lien. The Common Stock issuable upon exercise of the Warrants have been duly
authorized and reserved for issuance by all necessary corporate action and, when
issued and allotted in accordance with the provisions of the Warrants, will be
duly authorized, validly issued, fully paid and nonassessable. As of the
Effective Date, there are no pre-emptive rights applicable to the issuance of
the Warrants or the shares of Common Stock issuable upon exercise of the
Warrants.
Section 3.04 Governmental Authorization. The execution,
delivery and performance by each of the Representing Persons of the
Transaction Documents to which it is a party and the consummation of
the transactions contemplated hereby and thereby require no action by
or in respect of, or filing with, any governmental body, agency or
official, except for such actions and filings as have been or will be
made or the absence of which would not reasonably be expected to have a
Material Adverse Effect.
Section 3.05 Noncontravention. The execution, delivery and
performance by each of the Representing Persons of the Transaction
Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby do not and will not (i)
violate the certificate of incorporation or bylaws of such Representing
Person (or the Reorganized Debtor, as the case may be), (ii) assuming
compliance with the matters referred to in Section 3.04, violate any
applicable law, rule, regulation, judgment, injunction, order or
decree, (iii) assuming the
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obtaining of all required consents, constitute a default under or give
rise to any right of termination, cancellation or acceleration of any
right or obligation of such Representing Person (or the Reorganized
Debtor, as the case may be) under any provision of any agreement or
other instrument binding upon such Representing Person (or the
Reorganized Debtor, as the case may be) or by which any of such assets
or properties of such Representing Person (or the Reorganized Debtor,
as the case may be) are or may be bound or (iv) result in the creation
or imposition of any Lien on any of the assets or properties of such
Representing Person (or the Reorganized Debtor, as the case may be),
other than Permitted Liens or as otherwise contemplated by the
Transaction Documents.
Section 3.06 Absence of Certain Developments. Except for the
commencement of the Chapter 11 Cases, since March 31, 2003, the
business of ACP Holding, NFC Castings, the Company and the Company's
Subsidiaries has been conducted in the ordinary course consistent with
past practice and there has been no material adverse change in the
business, condition (financial or otherwise), operations, performance
or properties of ACP Holding, NFC Castings, the Company and the
Company's Subsidiaries (a "MATERIAL ADVERSE CHANGE"); provided that
none of (i) the commencement of the Chapter 11 Cases nor any public
announcement in respect thereof, (ii) the filing or confirmation of the
Plan (iii) the facts or events related to the MACT compliance project
and the Kendallville facility disclosed to the Investors prior to the
date hereof, (iv) changes or events effecting general economic
conditions or capital markets, but not otherwise materially and
adversely effecting the business, assets or financial condition of the
Representing Persons as a whole, nor (iv) any event, circumstance or
condition disclosed in writing to the Investors prior to June 30, 2003
shall constitute a Material Adverse Change.
Section 3.07 Financial Advisory Fees. No agent, broker,
investment bank or other financial advisor is or will be entitled to
any fee, commission, expense or other amount with respect to any
transaction contemplated by this Agreement or the other Transaction
Documents except for fees, commissions, expenses or other amounts
payable under agreements heretofore disclosed to the Investors or
approved by the Bankruptcy Court.
Section 3.08 Disclosure. No information contained in this
Agreement, the Plan, the Disclosure Statement or the consolidated
financial statements of the Company as of and for the fiscal year ended
September 30, 2002 previously delivered to the Investors, as the same
may have been supplemented or amended (the "INFORMATION") contains any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made,
and, to the extent that any such Information contains projections, such
projections were prepared in good faith on the basis of (A)
assumptions, methods and tests which were believed by the Representing
Persons to be reasonable at the time such projections were made and (B)
information believed by the Representing Persons to have been accurate
based upon the information available to the Representing Persons at the
time such projections were made.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor represents and warrants, only with respect to
itself, severally and not jointly, to the Representing Persons as of
the date hereof and as of the Closing Date that:
Section 4.01 Corporate Existence and Power. The Investor is
duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization and has all powers and all material
governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted.
Section 4.02 Authorization. The execution, delivery and
performance by the Investor of this Agreement and each of the other
Transaction Documents to which it is a party and the consummation of
the transactions contemplated hereby and thereby are within the powers
of the Investor and have been duly authorized by all necessary action
on the part of the Investor. Each Transaction Document to which it is a
party constitutes a valid and binding agreement of the Investor
enforceable against the Investor in accordance with its terms, except
that such enforcement may be limited by bankruptcy, reorganization,
insolvency and other similar laws affecting the enforcement or
creditors' rights generally and limitations imposed by general
principles of equity.
Section 4.03 Governmental Authorization. The execution,
delivery and performance by the Investor of this Agreement and the
other Transaction Documents to which it is a party and the consummation
of the transactions contemplated hereby and thereby require no material
action by or in respect of, or material filing with, any governmental
body, agency or official.
Section 4.04 Noncontravention. The execution, delivery and
performance by the Investor of this Agreement and the other Transaction
Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby do not and will not (i)
violate the organizational documents of the Investor or, (ii) assuming
compliance with the matters referred to in Section 4.03, violate any
applicable material law, rule, regulation, judgment, injunction, order
or decree.
Section 4.05 Litigation. There is no action, suit,
investigation or proceeding pending against, or to the knowledge of the
Investor, threatened against or affecting the Investor, before any
court or arbitrator or any governmental body, agency or official which
in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by the Transaction
Documents.
Section 4.06 Financial Advisory Fees. No agent, broker,
investment bank or other financial advisor is or will be entitled to
any fee, commission, expense or other amount from such Investor in
connection with any of the transactions contemplated by this Agreement
or the other Transaction Documents.
Section 4.07 Investment Knowledge; Access to Information. The
Investor: (a) understands that the Units sold pursuant to this
Agreement have not been, and will not be, registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), or under any
state securities laws, and are being offered and sold in reliance upon
federal and state exemptions
11
for transactions not involving any public offering; (b) is acquiring
the Units solely for its own account (or the account of the funds or
managed accounts to be designated by such Investor) for investment
purposes and not with a view to their distribution; (c) has knowledge
and experience in business and financial matters; (d) has received
certain information concerning ACP Holding, NFC Casting, the Company
and the Company's Subsidiaries and has had the opportunity to obtain
additional information as desired in order to evaluate the merits and
the risks inherent in holding the Units; (e) is able to bear the
economic risk and lack of liquidity inherent in holding the Units; and
(f) is, or will be as of the Closing, an "Accredited Investor" (as
defined in Regulation D promulgated under the Securities Act).
Section 4.08 Financing. The Investor will have sufficient
financial resources available on the Closing Date in order to purchase
the Units being purchased by it.
Section 4.09 Legend. The Investor is aware that each
certificate representing any shares of Common Stock shall bear a legend
in substantially the following form:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE OR
OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER
SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS NEENAH
FOUNDRY COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT SUCH REGISTRATION OR QUALIFICATION IS
NOT REQUIRED."
ARTICLE V
COVENANTS OF ACP HOLDING AND THE COMPANY
ACP Holding and the Company agree that:
Section 5.01 Conduct of the Business. From and after the date
hereof until the Closing Date, each of ACP Holding and the Company
shall, and shall cause each of its Subsidiaries and Affiliates to,
conduct its business in the ordinary course consistent with past
practice, and shall use its best efforts to preserve intact the
business organizations and relationships with third parties and to keep
available the services of the present employees of ACP Holding, NFC
Castings, the Company and the Company's Subsidiaries. Without limiting
the generality of the foregoing, from the date hereof until the Closing
Date, each of ACP Holding and the Company will not and will cause each
of its Subsidiaries and Affiliates not to:
(a) amend its charter, bylaws or other comparable organizational
documents other than in accordance with this Agreement or amend or waive any
provisions of the Transaction Documents;
(b) acquire a material amount of assets from any other Person;
(c) issue shares or other securities except in compliance with the
Plan;
12
(d) sell, lease, license or otherwise dispose of any properties
except (i) pursuant to existing contracts or commitments and (ii) in the
ordinary course consistent with past practice;
(e) change its methods of accounting, except as required by
changes in GAAP;
(f) (i) incur any additional indebtedness, except as permitted
under the Plan, or (ii) make any loans, advances or capital contributions to, or
investments in, any Person (excluding any Subsidiary), except as permitted under
the Plan;
(g) except as otherwise permitted under the Plan, modify the
compensation or benefits of, or hire any employees, except for increases or
hirings in the ordinary course consistent with past practice; provided that any
modification to the compensation or benefits or hiring of any employee with a
base salary in excess of $120,000 per year or holding a position of at least
vice president shall require the prior written consent of the Investors; or
(h) agree or commit to do any of the foregoing.
Section 5.02 Access to Information. From and after the date
hereof until the Closing Date, subject to the terms of the
Confidentiality Agreement, and upon reasonable prior notice, ACP
Holding and the Company will afford and will cause NFC Castings and the
Company's Subsidiaries to afford the Investors and their
Representatives full and complete access to the books, records and
properties of ACP Holding, NFC Castings, the Company and the Company's
Subsidiaries and the opportunity to discuss the business, affairs and
finances of ACP Holding, NFC Castings, the Company and the Company's
Subsidiaries and Affiliates with directors, officers, employees,
accountants, attorneys and representatives of ACP Holding, NFC
Castings, the Company and the Company's Subsidiaries and Affiliates in
order to enable the Investors and their Representatives to make such
investigations of ACP Holding, NFC Castings, the Company, the Company's
Subsidiaries and Affiliates and their respective businesses as the
Investors and their Representatives reasonably deem appropriate. Each
of ACP Holding and the Company agrees that it will cause the officers
and employees of ACP Holding, NFC Castings, the Company and the
Company's Subsidiaries and Affiliates, and will request their
respective legal counsel and accountants, to cooperate so that the
Investors can complete such review, including promptly disclosing to
the Investors any material fact known to such parties which has
resulted in, or could reasonably be expected to result in, a Material
Adverse Change or the occurrence of any Termination Event. Any
investigation pursuant to this Section shall be conducted in such
manner as not to interfere unreasonably with the conduct of the
business of ACP Holding, NFC Castings, the Company or the Company's
Subsidiaries and Affiliates. No investigation by the Investors or other
information received by the Investors shall operate as a waiver or
otherwise affect any representation, warranty or agreement given or
made by the Representing Persons hereunder.
Section 5.03 Notices of Certain Events. From and after the
date hereof until the Closing Date, each of ACP Holding and the Company
shall promptly notify the Investors of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with the
transactions contemplated by the Transaction Documents or the Plan;
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(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by the Transaction Documents or the Plan;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge threatened against, relating to or involving or
otherwise affecting ACP Holding, NFC Castings, the Company, any of the Company's
Subsidiaries and Affiliates or their respective businesses that, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Section 3.09 or that relate to the consummation of the transactions
contemplated by the Transaction Documents;
(d) the occurrence of any Termination Event;
(e) the occurrence of any event, or the existence of any material
fact which has resulted in, or could reasonably be expected to result in, a
Material Adverse Change; or
(f) any fact, event, transaction or circumstance that (i) causes
or will cause any covenant or agreement of the Representing Persons under the
Transaction Documents to be breached, (ii) that renders or will render untrue
any representation or warranty of the Representing Persons contained in this
Agreement as if the same were made on or as of the date of such fact, event,
transaction or circumstance or (iii) renders the satisfaction of any condition
to the Investors' obligations under this Agreement impossible or impracticable
with the use of commercially reasonable efforts.
Section 5.04 Corporate Governance. ACP Holding shall take all
necessary action to provide that the number of directors on the Board
of Directors of Reorganized ACP Holding shall consist of five (5)
members. ACP Holding shall nominate and take all necessary action to
provide that representatives to the Board of Directors of Reorganized
ACP Holding immediately after the Closing shall be elected, replaced or
removed in the manner set forth in the Stockholders Agreement.
Section 5.05 Rights Offering. ACP Holding and the Company
shall have accepted all validly tendered subscriptions pursuant to the
terms of the Rights Offering and in accordance with Article IV of the
Plan.
Section 5.06 Regulatory Approval Expenses. ACP Holding and the
Company agree to reimburse the Investors for all expenses, including
all filing and/or application fees and the reasonable fees and expenses
of counsel, incurred by or on behalf of the Investors in connection
with obtaining all waivers, consents, approvals and actions of, and
making all filings with and giving all notices to any Governmental
Authority or any other public or private third parties required of the
Investors or ACP Holding and the Company to consummate the transactions
contemplated by the Transaction Documents.
ARTICLE VI
COVENANTS OF THE INVESTORS
Each Investor agrees, severally and not jointly, that:
Section 6.01 Confidentiality. (a) All confidential documents
and information concerning the Company or any its Subsidiaries
furnished to the Investors in connection with the
14
transactions contemplated by the Transaction Documents shall be
accorded the treatment prescribed for Evaluation Materials in the
Confidentiality Agreement.
(b) Notwithstanding anything herein to the contrary, each party
hereto (and each Affiliate and person acting on behalf of any such party) agrees
that each party (and each employee, representative, and other agent of such
party) may disclose to any and all persons, without limitation of any kind, the
tax treatment and tax structure of the transactions contemplated by the
Transaction Documents and all materials of any kind (including opinions or other
tax analyses) that are provided to such party or such person relating to such
tax treatment and tax structure, except to the extent necessary to comply with
any applicable federal or state securities laws. This authorization is not
intended to permit disclosure of any other information including (without
limitation) (i) any portion of any materials to the extent not related to the
tax treatment or tax structure of the contemplated transactions, (ii) the
identities of participants or potential participants in the contemplated
transactions, (iii) the existence or status of any negotiations, (iv) any
pricing or financial information (except to the extent such pricing or financial
information is related to the tax treatment or tax structure of the contemplated
transactions), or (v) any other term or detail not relevant to the tax treatment
or the tax structure of the contemplated transactions.
ARTICLE VII
COVENANTS OF ACP HOLDING, THE COMPANY AND THE INVESTORS
ACP Holding, the Company and each Investor (with respect to
itself only) agree that:
Section 7.01 Best Efforts; Further Assurances. Subject to the
terms and conditions of this Agreement, the parties to this Agreement
will use their reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary or
desirable under applicable laws and regulations to consummate the
transactions contemplated by the Transaction Documents to which they
are a party. Each party hereto agrees to execute and deliver, or cause
to be executed and delivered, such other documents, certificates,
agreements and other writings and to take or to cause to be taken such
other actions as may be necessary or desirable in order to consummate
or implement expeditiously the transactions contemplated by the
Transaction Documents.
Section 7.02 Public Announcements. Neither ACP Holding nor the
Company shall issue any press release that references the Investors or
any of the transactions contemplated under the Transaction Documents
without the consent of the Investors; provided, however, that if ACP
Holding or the Company has provided the Investors with a copy of the
press release, and the Investors have not responded within four (4)
Business Days, ACP Holding and the Company may proceed with issuance of
such press release.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.01 Conditions to Obligation of the Investors. The
obligation of each Investor to consummate the Closing is subject to the
satisfaction of the following further conditions:
(a) Performance of Obligations. (i) Each of ACP Holdings, the
Company and the Company's Subsidiaries shall have performed in all material
respects all of its obligations under the
15
Transaction Documents and the Plan required to be performed by it on or prior to
the Closing Date; (ii) the representations and warranties of ACP Holding, the
Company and the Company's Subsidiaries contained in this Agreement and in any
certificate or other writing delivered by ACP Holding, the Company or any of the
Company's Subsidiaries pursuant hereto shall be true and correct in all material
respects at and as of the Closing Date as if made at and as of such time, in
each case individually and in the aggregate; and (iii) the Investors shall have
received a certificate signed by the President and the Chief Financial Officer
of ACP Holding and the Company to the foregoing effect.
(b) Corporate Existence; Authority. The Investors shall have
received all documents they may reasonably request relating to the existence of
each of the Representing Persons and the authority of each such Representing
Person to enter into, and complete the transactions contemplated by, the
Transaction Documents to which it is a party, all in form and substance
reasonably satisfactory to the Investors.
(c) Instruments and Proceedings to be Satisfactory. All corporate
and other proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and the other Transaction Documents shall be
reasonably satisfactory to the Investors.
(d) Amendment to Certificate of Incorporation and Bylaws. ACP
Holding shall have caused the Reorganized ACP Holding to adopt the Restated
Certificate of Incorporation and Restated Bylaws in accordance with Delaware law
and the Investors shall have received evidence thereof reasonably satisfactory
to the Investors.
(e) Satisfactory Form of the Plan. The Plan shall be in form and
substance consistent with the Plan Term Sheet or otherwise in form and substance
reasonably satisfactory to the Investors and such Plan shall not have been
amended or modified without the consent of the Investors and the conditions
precedent to the confirmation and consummation of such Plan shall not have been
waived without the consent of the Investors;
(f) Confirmation of the Plan. (1) All conditions precedent to the
effectiveness of the Plan (other than those relating to the Closing hereunder)
shall have been satisfied or waived; and (2) an order confirming the Plan,
reasonably satisfactory to the Investor, substantially in the form attached
hereto as Exhibit E, shall have been entered and shall not have been stayed or
modified or vacated on appeal;
(g) Absence of Adverse Change. For the period from March 31, 2003
until immediately prior to Closing, there shall not have occurred or been
existing, at any time, a Material Adverse Change.
(h) Transaction Documents. Each of ACP Holding, the Company and
each of the Company's Subsidiaries shall have duly executed and delivered all
the Transaction Documents to which it is a party, in form and substance
satisfactory to the Investors in their reasonable discretion, and shall have
satisfied the conditions precedent contained in such Transaction Documents
(unless waived in writing by the Investors).
(i) New Facilities. The Company and each of the lenders party to
the New Facilities shall have executed and delivered the New Facilities and made
any initial funding contemplated under the New Facilities and each of the New
Facilities shall be in full force and effect.
16
(j) Governmental, Regulatory and Third Party Consents and
Approvals. All necessary governmental, regulatory and third party approvals,
waivers and/or consents in connection with the transactions contemplated by the
Transaction Documents shall have been obtained by ACP Holding and the Company
and remain in full force and effect, and there shall exist no claim, action,
suit, investigation, litigation or proceeding, pending or threatened in any
court or before any arbitrator or governmental instrumentality, which seeks to
restrict the consummation of the transactions contemplated by the Transaction
Documents.
(k) Senior Secured Notes Registration Rights Agreement and Senior
Subordinated Notes Registration Rights Agreement. The Company shall have
executed and delivered the Senior Secured Notes Registration Rights Agreement
and the Senior Subordinated Notes Registration Rights Agreement and such
agreements shall be in full force and effect.
(l) Warrant Registration Rights Agreement. ACP Holding shall have
executed and delivered the Warrant Registration Rights Agreement and such
agreement shall be in full force and effect.
(m) Legality of Investment. There shall not be in effect any law
or order of any Governmental Authority restraining, enjoining or otherwise
prohibiting or making illegal the consummation of the transactions contemplated
by the Transaction Documents and there shall exist no claim, action, suit,
investigation, litigation, arbitration or proceeding, pending or threatened, in
any court or before any tribunal or arbitrator, commenced or sought by any
Person, seeking such a law or order.
(n) Liquidity. After giving effect to the purchase of the Maximum
Units by the Investors and the Participating Holders, if any, and the payments
to be made under the Plan, the Company and its Subsidiaries shall have cash and
cash equivalents plus available borrowings under the Revolver as of the Closing
Date of no less than $25,000,000.
(o) Other Investors. All other Investors shall have purchased the
Units that they are obligated to purchase pursuant to Schedule I hereto and
shall have performed all of their other obligations under the Transaction
Documents to which they are a party.
(p) Executive Officer Certificate. No later than the Business Day
immediately prior to the Closing Date, each of ACP Holding and the Company shall
deliver to the Investors a certificate executed by the President and Chief
Executive Officer and the Chief Financial Officer of each of ACP Holding and the
Company:
(i) setting forth the actual EBITDA of the
Company and its Subsidiaries on a consolidated basis
calculated in accordance with GAAP, consistently applied for
the twelve months period ended August 31, 2003;
(ii) confirming that, to the best of their
knowledge, the actual EBITDA of the Company and its
Subsidiaries on a consolidated basis calculated in accordance
with GAAP, consistently applied for the twelve months period
ended September 30, 2003 exceeds $50,000,000;
(iii) confirming that the Company will have
immediately following the Closing, cash and cash equivalents,
plus available borrowings under the Revolver of not less than
$25,000,000; and
17
(iv) confirming satisfaction of the conditions
set forth in Sections 8.01(b), (g), (i), (k) and (m).
(q) The Investors and the Participating Holders shall have
subscribed and paid for the Maximum Units for a price per Unit of not less than
the Unit Purchase Price.
(r) The Company shall have reimbursed the Investors for their
Expenses in accordance with Section 2.02(c).
Section 8.02 Conditions to Obligations of ACP Holding and the
Company. The obligation of ACP Holding and the Company to consummate
the Closing is subject to the satisfaction of the following conditions:
(a) Performance of Obligations. (i) Each Investor shall have
performed in all material respects all of its obligations under the Transaction
Documents required to be performed by it at or prior to the Closing Date and
(ii) the representations and warranties of each Investor contained in this
Agreement and in any certificate or other writing delivered by such Investor
pursuant hereto shall be true in all material respects at and as of the Closing
Date, as if made at and as of such date.
(b) Governmental and Regulatory Consent and Approvals. Each
Investor shall have received all consents, authorizations or approvals from
governmental agencies referred to in Section 4.03, in each case in form and
substance reasonably satisfactory to ACP Holding and the Company, and no such
consent, authorization or approval shall have been revoked.
(c) Existence; Authority. The Company shall have received all
documents it may reasonably request relating to the existence of each Investor
and the authority of such Investor to enter into, and complete the transactions
contemplated by, the Transaction Documents to which it is a party, all in form
and substance reasonably satisfactory to the Company.
(d) Legality of Investment. There shall not be in effect any law
or order of any Governmental Authority restraining, enjoining or otherwise
prohibiting or making illegal the consummation of the transactions contemplated
by the Transaction Documents.
Section 8.03 Conditions to Obligations of the Investors, ACP
Holding and the Company.
(a) Lien Subordination Agreement. The Lien Subordination Agreement
shall be on terms reasonably acceptable to the Company, the lenders party to the
Credit Agreement and the Investors.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
Section 9.01 Survival. The representations and warranties of
the parties hereto contained in this Agreement or in any certificate or
other writing delivered pursuant to or in connection with this
Agreement shall survive the Closing until the second anniversary of the
Closing Date; provided that the representations and warranties set
forth in Sections 3.02, 3.03, 4.02 and 4.06 shall survive indefinitely.
Notwithstanding the preceding sentence, any representation or warranty
in respect of which indemnity may be sought under this Agreement shall
survive the time at which it would otherwise terminate pursuant to the
preceding sentence, if notice of the
18
inaccuracy thereof giving rise to such right of indemnity shall have
been given to the party against whom such indemnity may be sought prior
to such time. The covenants and agreements of the parties (including,
without limitation, the covenants and agreements of the parties set
forth in this Article IX) contained in this Agreement or in any other
Transaction Document which by their terms are to be performed following
the Closing Date shall survive indefinitely.
Section 9.02 Indemnification. (a) Each of ACP Holdings and the
Company (or the Reorganized Debtors, as the case may be) hereby agrees
to indemnify each Investor and its Affiliates and each of their
shareholders, directors, officers, partners, members, managers,
employees, agents and assignees, including Affiliates thereof,
(collectively, with respect to any Person, such Person's
"REPRESENTATIVES") against and agrees to hold each of them harmless
from, any and all losses, claims, damages, liabilities and expenses
(including, without limitation, reasonable expenses of investigation
and reasonable attorneys' fees and expenses in connection with any
action, suit or proceeding whether involving a third-party claim or a
claim solely between the parties hereto) ("DAMAGES") incurred or
suffered by them arising out of:
(i) any misrepresentation or breach of warranty,
covenant or agreement made or to be performed by ACP Holding
or the Company pursuant to this Agreement;
(ii) any and all Damages arising out of or in any
way relating to or resulting from the Commitment Letter or
this Agreement, or in any way arising from any use or intended
use of the Commitment Letter, this Agreement or the proceeds
of the Investment (as defined in the Commitment Letter),
including reimbursement (on an as-incurred monthly basis) of
each Investor for any reasonable and documented legal or other
expenses incurred in connection with investigating, defending
or participating in any such loss, claim, damage, liability or
action or other proceeding (whether or not such Investor is a
party to any action or proceeding out of which indemnified
expenses arise), but excluding therefrom all Damages that are
finally determined by a court of competent jurisdiction to
have resulted primarily from the bad faith, gross negligence
or willful misconduct of such Investor; and
(iii) the enforcement of its rights under this
Section 9.02.
The obligations of ACP Holding and the Company under this
Section 9.02(a) (the "INDEMNIFICATION OBLIGATIONS") shall remain
effective whether or not any of the transactions contemplated in the
Transaction Documents are consummated, any definitive legal
documentation is executed and notwithstanding any termination of this
Agreement and shall, subject to the approval of the Bankruptcy Court,
be binding upon the Reorganized Debtors in the event that any plan of
reorganization of the Company is consummated.
(b) Each Investor, severally and not jointly, hereby agrees to
indemnify ACP Holding, the Company, the Company's Subsidiaries and their
respective Representatives against and agrees to hold each of them harmless from
any and all Damages incurred or suffered by them arising out of:
(i) any misrepresentation or breach of warranty
(disregarding any qualification or exception contained in such
representation or warranty relating to
19
materiality), covenant or agreement made or to be performed by
such Investor pursuant to any of the Transaction Documents;
and
(ii) the enforcement of their rights under this
Section 9.02.
Section 9.03 Procedures for Third Party Claims. (a) The
parties seeking indemnification under Section 9.02 (the "INDEMNIFIED
PARTIES") shall give prompt notice to the parties against whom
indemnity is sought (the "INDEMNIFYING PARTIES") of the assertion of
any claim, or the commencement of any suit, action or proceeding in
respect of which indemnity may be sought under Section 9.02 (the "THIRD
PARTY CLAIMS"). The failure by any Indemnified Party so to notify the
Indemnifying Parties shall not relieve any Indemnifying Party from any
liability which it may have to such Indemnified Party with respect to
any claim made pursuant to this Section 9.03, except to the extent such
failure shall actually prejudice an Indemnifying Party.
(b) Upon receipt of notice from the Indemnified Parties pursuant
to Section 9.03(a), the Indemnifying Parties will, subject to the provisions of
Section 9.03(c), assume the defense and control of such Third Party Claims but
shall allow the Indemnified Parties a reasonable opportunity to participate in
the defense of such Third Party Claims with their own counsel and at their own
expense (except as provided in Section 9.03(d)). The Indemnifying Parties shall
select counsel, contractors and consultants of recognized standing and
competence who shall be reasonably acceptable to the Indemnified Parties; shall
take all steps necessary in the defense or settlement of such Third Party
Claims; and shall at all times diligently and promptly pursue the resolution of
such Third Party Claims. The Indemnified Parties shall, and shall cause each of
their Subsidiaries and Affiliates and their Representatives to, cooperate fully
with the Indemnifying Parties in the defense of any Third Party Claim defended
by the Indemnifying Parties.
(c) The Indemnifying Parties shall not be authorized to consent to
a settlement of, or the entry of any judgment arising from, any Third Party
Claim, without the consent of the Indemnified Parties; provided, however, that
upon ten (10) days notice and the opportunity to object by the Indemnified
Parties, the Indemnifying Parties shall be authorized to consent to such a
settlement or judgment if the Indemnifying Parties shall (i) pay or cause to be
paid all amounts arising out of such settlement or judgment concurrently with
the effectiveness of such settlement; (ii) not encumber any of the assets of any
Indemnified Party or agree to any restriction or condition that would apply to
or adversely affect any Indemnified Party or the conduct of any Indemnified
Party's business; and (iii) obtain, as a condition of any settlement or other
resolution, a complete release of any Indemnified Party potentially affected by
such Third Party Claim.
(d) The Indemnifying Parties shall also be liable for the
reasonable fees and expenses of counsel incurred by each Indemnified Party in
defending any Third Party Claim if such Third Party Claim, if successful, is
likely to result in a judgment, decree or order of injunction or other equitable
relief or relief for other than money Damages against such Indemnified Party.
Section 9.04 Procedures for Direct Claims. In the event any
Indemnified Party should have a claim for indemnity against any
Indemnifying Party that does not involve a Third Party Claim, the
Indemnified Party shall deliver notice of such claim with reasonable
promptness to the Indemnifying Party. The failure by any Indemnified
Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability that it may have to such
20
Indemnified Party with respect to any claim made pursuant to this
Section 9.04, it being understood that notices for claims in respect of
a breach of a representation or warranty must be delivered prior to the
expiration of the survival period for such representation or warranty
except to the extent of any actual harm suffered by such Indemnifying
Party as a result of such failure. If the Indemnifying Party does not
notify the Indemnified Party within 30 calendar days following its
receipt of such notice that the Indemnifying Party disputes its
liability to the Indemnified Party under this Article IX, the claim
specified by the Indemnified Party in such notice shall be conclusively
deemed a liability of the Indemnifying Party under this Article IX, and
the Indemnifying Party shall pay the amount of such liability to the
Indemnified Party within 30 days of demand or, in the case of any
notice in which the amount of the claim (or any portion of the claim)
is estimated, on such later date when the amount of such claim (or such
portion of such claim) becomes finally determined. If the Indemnifying
Party has timely disputed its liability with respect to such claim as
provided above, the Indemnifying Party and the Indemnified Party shall
resolve such dispute in accordance with Section 11.06.
Section 9.05 Liability. The liability of the Representing
Persons to the Investors pursuant to this Agreement is joint and
several and extends solely to any matter relating to the purchase of
the Unsubscribed Units and no Investor shall have any claim for damages
hereunder in respect of Units acquired thereby pursuant to the Rights
Offering.
ARTICLE X
TERMINATION
Section 10.01 Grounds for Termination. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written agreement of ACP Holding, the Company and
the Investors;
(b) by ACP Holding, the Company or any Investor if the
Participating Holders acquire the Maximum Units pursuant to the Plan;
(c) by ACP Holding or the Company if there shall be any law or
regulation that makes consummation of the transactions contemplated hereby by
any Investor illegal or otherwise prohibited or consummation of the transactions
contemplated hereby by any Investor would violate any nonappealable final order,
decree or judgment of any court or governmental body having competent
jurisdiction;
(d) by ACP Holding or the Company in the event (i) of a material
breach hereof by any Investor if such breaching Investor fails to cure such
breach within ten (10) Business Days following notification thereof by the
Company or (ii) upon notification of any Investor by ACP Holding or the Company
that the satisfaction of any condition to the obligations of ACP Holding or the
Company under this Agreement becomes impossible or impracticable with the use of
commercially reasonable efforts if the failure of such condition to be satisfied
is not caused by a breach hereof by ACP Holding or the Company; or
(e) upon the occurrence of any of the following events (unless
waived by any Investor as set forth below):
21
(i) the Bankruptcy Court does not confirm the
Plan on or before October 4, 2003;
(ii) the Effective Date of the Plan does not
occur on or before October 20, 2003;
(iii) a trustee, responsible officer, or an
examiner with powers beyond the duty to investigate and
report, as set forth in subclauses (3) and (4) of clause (a)
of section 1106 of the Bankruptcy Code shall have been
appointed under section 1104 or 105 of the Bankruptcy Code for
service in the Chapter 11 Cases;
(iv) the Chapter 11 Cases shall have been
converted to cases under chapter 7 of the Bankruptcy Code;
(v) the failure or non-occurrence of any
condition precedent contained in Section 8.01;
(vi) after filing the Plan, ACP Holding, NFC
Castings or the Company (i) submits a second or amended plan
of reorganization or liquidation that is materially adverse to
the Investors and inconsistent with the terms and provisions
of the Plan Term Sheet or (ii) moves to withdraw or withdraws
the Plan;
(vii) ACP Holding or the Company executes and/or
seeks Bankruptcy Court approval for a different offering or
sale of debt or equity of the Reorganized Debtors or any other
standby commitment or proposal for any other transaction in
excess of $110 million, other than with the Investors or as
contemplated by the Plan Term Sheet;
(viii) as of the last day of each fiscal month
ending after the date hereof and prior to the consummation of
the Plan, the EBITDA of the Company and its Subsidiaries on a
consolidated basis calculated in accordance with GAAP
consistently applied for the twelve months ending as of such
last day shall be less than $50 million; and
(ix) a material breach hereof by either ACP
Holding or the Company.
The party desiring to terminate this Agreement pursuant to
clauses 10.01(b), (c) or (d) shall give notice of such termination to
the other party and, except as provided in clause (i) of Section
10.01(d), upon receipt of such notice by the non-terminating parties,
this Agreement shall be terminated.
In the event of a termination by the Company pursuant to
clause 10.01(c) or (d) arising from facts or circumstances applicable
only to one Investor, the other Investors may, by written notice
delivered to ACP Holding and the Company not later than five (5)
Business Days following receipt of the Company's notice of termination,
elect to subscribe for and purchase all the Units not purchased by the
breaching Investor. In the event of such election, the Company's
termination of this Agreement with respect to such Electing Investors
shall be deemed null and void and the Electing Investors shall be
deemed to have subscribed for all of such Units at a per Unit purchase
price equal to the Unit Purchase Price, subject to the satisfaction
(with respect to such Electing Investors only) of the conditions
contained in Section 8.02 by such Electing
22
Investors. The number of Units each Electing Investor shall have the
right to purchase under this paragraph shall be calculated in the
manner set forth in Section 2.01(b).
All provisions of this Agreement shall terminate effective upon (A)
written notice being provided to the Company by the Investors stating
that (1) a Termination Event has occurred and (2) setting forth the
nature of such Termination Event; provided that the Company hereby
agrees to waive the requirement (if any) that the automatic stay in
effect pursuant to section 362 of the Bankruptcy Code (the "AUTOMATIC
STAY") be lifted in connection with giving such notice (and not to
object to the Investors seeking to lift the Automatic Stay in
connection with giving such notice, if necessary), and (B) with respect
to any Termination Event capable of being cured, a ten (10) day cure
period with respect thereto shall have lapsed and such event or breach
shall have remained uncured. The Company shall notify the Investors in
writing of the occurrence of any Termination Event.
Section 10.02 Effect of Termination. If this Agreement is
terminated as permitted by Section 10.01, such termination shall be
without liability of either party (or any stockholder, partner, member,
director, officer, employee, agent, consultant or representative of
such party) to the other party to this Agreement; provided that if such
termination shall result from the (i) willful failure of either party
to fulfill a condition to the performance of the obligations of the
other party, (ii) failure to perform a covenant of this Agreement or
(iii) breach by either party hereto of any representation or warranty
or agreement contained herein, such party shall be fully liable for any
and all Damages incurred or suffered by the other party as a result of
such failure or breach. The provisions of Sections 2.02(c) (which
Expenses will be paid to the Investors within one (1) day of receipt of
the Investors' invoices therefor), 5.07, 6.01, 9.02 (and Section 9.03
and 9.04 to the extent applicable to a claim under 9.02), 11.03, 11.05,
11.06 and 11.07 shall survive any termination hereof pursuant to
Section 10.01.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
facsimile transmission) and shall be given,
if to the Investors, to:
MacKay Shields LLC
9 West 57th Street, 33rd Floor
New York, NY 10019
Attention: Neal G. Goldman
Fax: (212) 754-9187
Citicorp Mezzanine III, L.P.
399 Park Avenue, 14th Floor
New York, NY 10043
Attention: Richard E. Mayberry, Jr.
Fax: (212) 888-2940
23
TCW Shared Opportunity Fund II, L.P.
c/o Trust Company of the West
11100 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025
Attention: Jamison J. Van Niel
Fax: (310) 235-5965
Shared Opportunity Fund IIB LLC
c/o Trust Company of the West
11100 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025
Attention: Jamison J. Van Niel
Fax: (310) 235-5965
TCW Shared Opportunity Fund IV, L.P.
c/o Trust Company of the West
11100 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025
Attention: Jamison J. Van Niel
Fax: (310) 235-5965
TCW Shared Opportunity Fund IVB, L.P.
c/o Trust Company of the West
11100 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025
Attention: Jamison J. Van Niel
Fax: (310) 235-5965
AIMCO CDO, Series 2000-A
c/o Trust Company of the West
11100 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025
Attention: Jamison J. Van Niel
Fax: (310) 235-5965
TCW High Income Partners, Ltd.
c/o Trust Company of the West
11100 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025
Attention: Jamison J. Van Niel
Fax: (310) 235-5965
TCW High Income Partners II, Ltd.
c/o Trust Company of the West
11100 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025
Attention: Jamison J. Van Niel
Fax: (310) 235-5965
24
Metropolitan Life Insurance Company
10 Park Avenue
Morristown, NJ 07962
Attention: Lisa Glass, Esq.
Fax: (212) 251-1563
Exis Differential Holdings, Ltd.
767 Third Avenue
New York, NY 10017
Attention: Christopher P. Kane
Fax: (212) 688-6010
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Michael F. Walsh
Fax: (212) 310-8007
if to ACP Holding:
ACP Holding Company
2121 Brooks Street
Neenah, Wisconsin 54956
Attention: William M. Barrett
Fax: (920) 729-3633
if to the Company, to:
Neenah Foundry Company
2121 Brooks Avenue
Neenah, Wisconsin 54956
Attention: William M. Barrett
Fax: (920) 729-3633
with a copy to:
Kirkland & Ellis LLP
153 East 53rd Street
New York, NY 10022
Attention: Geoffrey W. Levin
Fax: (212) 446-4900
All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received
prior to 5:00 p.m. in the place of receipt and such day
25
is a business day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
Section 11.02 Amendments and Waivers. (a) Any provision of
this Agreement may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement, or in the case of a waiver, by the party
against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 11.03 Expenses. Except as otherwise provided herein,
all costs and expenses incurred in connection with the Transaction
Documents shall be paid by the party incurring such cost or expense.
Section 11.04 Successors and Assigns. The provisions of 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 this Agreement nor any right, interest or obligation
hereunder may be assigned by any party hereto without the prior written
consent of the other parties hereto and any attempt to do so will be
void.
Section 11.05 Governing Law. Agreement shall be governed by
and construed in accordance with the law of the State of New York,
without regard to the conflicts of law rules of such state.
Section 11.06 Jurisdiction. The Bankruptcy Court shall retain
jurisdiction with respect to all matters arising from or related to the
implementation of this Agreement or the transactions contemplated
hereby and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby and
irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that such
suit, action or proceeding which is brought in such court has been
brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party
as provided in Section 11.01 shall be deemed effective service of
process on such party.
Section 11.07 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
26
Section 11.08 Counterparts; Third Party Beneficiaries. This
Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart
hereof signed by each other party hereto. No provision of this
Agreement is intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 11.09 Entire Agreement. This Agreement and the other
Transaction Documents constitute the entire agreement between the
parties with respect to the subject matter of this Agreement and
supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
Section 11.10 Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction
or interpretation hereof.
Section 11.11 Service on Committee of Creditors.
Notwithstanding anything herein to the contrary, the terms of this
Agreement shall not be construed so as to limit any Investor's exercise
of its fiduciary duties as a member of a creditors' committee to any
person arising from its service on such committee, and any such
exercise of such fiduciary duty shall not be deemed to constitute a
breach of the terms of this Agreement.
Section 11.12 Delays or Omissions. Except as expressly
provided herein, no delay or omission to exercise any right, power or
remedy accruing to the Company or the Investors upon any breach or
default of any party under this Agreement, shall impair any such right,
power or remedy of the Company or Investors nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any
kind or character on the part of the Company or the Investors of any
breach or default under this Agreement, or any waiver on the part of
any such party of any provisions or conditions of this Agreement, must
be in writing and shall be effective only to the extent specifically
set forth in such writing. All remedies, either under this Agreement or
by law or otherwise afforded to the Company or the Investors shall be
cumulative and not alternative.
Section 11.13 Interpretation. The parties agree that to the
extent any provision of the Plan relating to the Investors and the
Participating Investors conflicts with any provision of this Agreement,
the provisions of this Agreement shall control.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
MACKAY SHIELDS LLC
By: /s/ Don Morgan III
------------------------------------
Name: Don Morgan III
Title: Senior Managing Director
CITICORP MEZZANINE III, L.P.
By: /s/ Byron Knief
------------------------------------
Name: Byron Knief
Title: Senior Vice President
TCW Shared Opportunity Fund II, L.P.
By: TCW Investment Management Company
Its Investment Manager
By: /s/ Nicholas W. Tell, Jr.
------------------------------------
Name: Nicholas W. Tell, Jr.
Title: Managing Director
By: /s/ Gary A. Hobart
------------------------------------
Name: Gary A. Hobart
Title: Vice President
Shared Opportunity Fund IIB LLC
By: TCW Asset Management Company
as its Investment Advisor
By: /s/ Nicholas W. Tell, Jr.
------------------------------------
Name: Nicholas W. Tell, Jr.
Title: Managing Director
By: /s/ Gary A. Hobart
------------------------------------
Name: Gary A. Hobart
Title: Vice President
28
TCW Shared Opportunity Fund IV, L.P. and
TCW Shared Opportunity Fund IVB, L.P.
By: TCW Asset Management Company
Its Investment Advisor
By: /s/ Nicholas W. Tell, Jr.
------------------------------------
Name: Nicholas W. Tell, Jr.
Title: Managing Director
By: /s/ Gary A. Hobart
------------------------------------
Name: Gary A. Hobart
Title: Vice President
AIMCO CDO, Series 2000-A
By: Allstate Investment Management Company
Its Collateral Manager
By: TCW Asset Management Company
Its Investment Advisor
By: /s/ Nicholas W. Tell, Jr.
------------------------------------
Name: Nicholas W. Tell, Jr.
Title: Managing Director
By: /s/ Gary A. Hobart
------------------------------------
Name: Gary A. Hobart
Title: Vice President
TCW High Income Partners, Ltd.
By: TCW Asset Management Company,
its Investment Advisor
By: /s/ Nicholas W. Tell, Jr.
------------------------------------
Name: Nicholas W. Tell, Jr.
Title: Managing Director
29
TCW High Income Partners II, Ltd.
By: TCW Asset Management Company,
its Investment Advisor
By: /s/ Nicholas W. Tell, Jr.
------------------------------------
Name: Nicholas W. Tell, Jr.
Title: Managing Director
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Jacqueline D. Jenkins
------------------------------------
Name: Jacqueline D. Jenkins
Title: Managing Director
EXIS DIFFERENTIAL HOLDINGS, LTD.
By: /s/ Chris Kane
------------------------------------
Name: Chris Kane
Title: Portfolio Manager
ACP HOLDING COMPANY
By: /s/ Gary LaChey
------------------------------------
Name: Gary LaChey
Title:
NEENAH FOUNDRY COMPANY
By: /s/ Gary LaChey
------------------------------------
Name: Gary LaChey
Title:
ADVANCED CAST PRODUCTS, INC.
By: /s/ Gary LaChey
------------------------------------
Name: Gary LaChey
Title:
30
DALTON CORPORATION
By: /s/ Gary LaChey
--------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
DALTON CORPORATION, WARSAW
MANUFACTURING FACILITY
By: /s/ Gary LaChey
--------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
DALTON CORPORATION, STRYKER
MACHINING FACILITY CO.
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
DALTON CORPORATION, ASHLAND
MANUFACTURING FACILITY
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
DALTON CORPORATION, KENDALLVILLE
MANUFACTURING FACILITY
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
DEETER FOUNDRY, INC.
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
31
GREGG INDUSTRIES, INC.
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
MERCER FORGE CORPORATION
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
A&M SPECIALTIES, INC.
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
NEENAH TRANSPORT, INC.
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
CAST ALLOYS, INC.
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
BELCHER CORPORATION
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
PEERLESS CORPORATION
By: /s/ Gary LaChey
---------------------------------------
Name: Gary LaChey
Title: VP - Finance, Treasurer,
Secty. & CFO
32