LIEN SUBORDINATION AGREEMENT
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This LIEN SUBORDINATION AGREEMENT (this "Agreement") is entered into as of
this 8th day of October, 2003, by and among Fleet Capital Corporation, a Rhode
Island corporation, as Agent for all Senior Lenders party to the Senior Loan
Agreement described below, Neenah Foundry Company, a Wisconsin corporation
("Neenah"), the Subsidiaries of Neenah listed on the signature pages hereto
(collectively, the "Neenah Subsidiaries"), NFC Castings, Inc., a Delaware
corporation ("Parent" and together with Neenah and the Neenah Subsidiaries, the
"Companies" and each, a "Company"), and The Bank of New York, a New York banking
corporation, as Trustee on behalf of the Noteholders, pursuant to the Indenture
and the other Indenture Documents referred to below (the "Trustee").
RECITALS
A. Neenah and certain of the Neenah Subsidiaries (collectively,
"Borrowers"), Agent, Fleet Securities, Inc., as Arranger, and the Senior Lenders
(as hereinafter defined) have entered into a Loan and Security Agreement of even
date herewith (as the same may be amended, supplemented or otherwise modified
from time to time, the "Senior Loan Agreement") pursuant to which, among other
things, the Senior Lenders have agreed, subject to the terms and conditions set
forth in the Senior Loan Agreement, to make certain loans and financial
accommodations to Borrowers. Parent and each of the Neenah Subsidiaries not
party to the Senior Loan Agreement as a Borrower have guaranteed all of the
obligations, liabilities and other indebtedness of Borrowers under the Senior
Loan Agreement. All of the Companies' obligations, liabilities and other
indebtedness to Agent and the Senior Lenders under the Senior Loan Agreement and
the other Senior Loan Documents (as hereinafter defined) are secured by liens on
and security interests in substantially all of the now existing and hereafter
acquired real and personal property of each of the Companies and in all of the
capital stock of Neenah and each of the Neenah Subsidiaries (collectively, the
"Collateral").
B. Trustee is the trustee for the holders (the "Noteholders") of
certain 11% Senior Secured Notes due 2010, in the aggregate original principal
amount of $133,130,000 (the "Indenture Notes"), which were issued by Neenah
pursuant to the Indenture (as hereinafter defined). Parent and each of the
Neenah Subsidiaries have guaranteed all of the obligations, liabilities and
other indebtedness of Neenah in respect of the Indenture Notes. All of the
Companies' obligations, liabilities and other indebtedness under the Indenture
Notes and the other Indenture Documents (as hereinafter defined) are secured by
liens on and security interests in the Collateral.
C. As an inducement to and as one of the conditions precedent to the
agreement of Agent and the Senior Lenders to consummate the transactions
contemplated by the Senior Loan Agreement, Agent and the Senior Lenders have
required the execution and delivery of this Agreement by the Trustee and each
Company in order to set forth the relative
rights and priorities of Agent, the Senior Lenders, the Trustee and Noteholders
with respect to the Collateral.
NOW, THEREFORE, in order to induce Agent and the Senior Lenders to
consummate the transactions contemplated by the Senior Loan Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties hereto hereby agree as follows:
1. CERTAIN DEFINITIONS. The following terms shall have the following
meanings in this Agreement:
"AGENT" shall mean Fleet Capital Corporation, a Rhode Island
corporation, as Agent for the Senior Lenders, or any other Person appointed
by the holders of the Senior Debt as administrative agent for purposes of
the Senior Loan Documents and this Agreement.
"BANKRUPTCY CODE" shall mean Chapter 11 of Title 11 of the United
States Code, as amended from time to time and any successor statute and all
rules and regulations promulgated thereunder.
"FLEET LOAN DOCUMENTS" shall mean the Senior Loan Agreement, any
guaranty, mortgage, security agreement or other collateral document
securing the Senior Debt and all other agreements, documents and
instruments executed from time to time in connection therewith, as the same
may be amended, supplemented or otherwise modified from time to time.
"INDENTURE" shall mean that certain Indenture, dated as of October 8,
2003, among Neenah, the Neenah Subsidiaries party thereto as subsidiary
guarantors, and the Trustee, as the same may be amended, supplemented or
otherwise modified from time to time.
"INDENTURE DEBT" shall mean all of the obligations of the Companies to
the Trustee, any Noteholder or any other Person evidenced by or incurred
pursuant to the Indenture, the Indenture Notes or any other Indenture
Documents.
"INDENTURE DOCUMENTS" shall mean the Indenture, the Indenture Notes,
any guaranty, mortgage, security agreement or other collateral document
securing the Indenture Debt and all other documents, agreements and
instruments now existing or hereinafter entered into evidencing or
pertaining to all or any portion of the Indenture Debt, as the same may be
amended, supplemented or otherwise modified from time to time.
"LIEN" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other
type
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of preferential arrangement that has the practical effect of creating a
security interest, in respect of such asset.
"PERSON" means any natural person, corporation, general or limited
partnership, limited liability company, firm, trust, association,
government, governmental agency or other entity, whether acting in an
individual, fiduciary or other capacity.
"PROCEEDING" shall mean any voluntary or involuntary insolvency,
bankruptcy, receivership, custodianship, liquidation, dissolution,
reorganization, assignment for the benefit of creditors, appointment of a
custodian, receiver, trustee or other officer with similar powers or any
other proceeding for the liquidation, dissolution or other winding up of a
Person.
"REFINANCING SENIOR LOAN DOCUMENTS" shall mean any financing
documentation which replaces the Fleet Loan Documents and pursuant to which
the Senior Debt under the Fleet Loan Documents is refinanced in accordance
with the limitations set forth in Section 4.11(viii) of the Indenture as in
effect as of the date hereof (or as modified with Agent's approval), as
such financing documentation may be amended, supplemented or otherwise
modified from time to time in compliance with this Agreement.
"SENIOR DEBT" shall mean all obligations, liabilities and indebtedness
of every nature of any Company from time to time owed to Agent or any
Senior Lender under the Senior Loan Documents, including, without
limitation, the principal amount of all debts, claims and indebtedness,
accrued and unpaid interest and all fees, costs and expenses, whether
primary, secondary, direct, contingent, fixed or otherwise, heretofore, now
and from time to time hereafter owing, due or payable, whether before or
after the filing of a Proceeding under the Bankruptcy Code, together with
any interest accruing thereon after the commencement of a Proceeding,
without regard to whether or not such interest is an allowed claim, and
together with any "Product Obligations" under and as defined in the Senior
Loan Agreement; provided, however, that in no event shall the aggregate
principal amount of the Senior Debt exceed the greater of (i) $102,000,000
and (ii) the "Borrowing Base Amount" as defined in the Indenture as in
effect as of the date hereof. Senior Debt shall be considered to be
outstanding whenever any loan commitment under the Senior Loan Documents is
outstanding.
"SENIOR LOAN DOCUMENTS" shall mean the Fleet Loan Documents and, after
the consummation of any refinancing of the Senior Debt in accordance with
the limitations set forth in Section 4.11(viii) of the Indenture as in
effect as of the date hereof (or as modified with Agent's approval), the
Refinancing Senior Loan Documents.
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"SENIOR LENDERS" shall mean the holders of the Senior Debt.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the state of Illinois.
2. SUBORDINATION OF LIENS.
2.1. COLLATERAL SUBORDINATION. The Trustee hereby subordinates and
makes junior in favor of Agent and the holders of the Senior Debt (and not for
the benefit of any other party) to the extent provided herein any and all of its
now existing or hereafter acquired Liens (the "Subordinated Lien") on any or all
of the Collateral to the now existing and hereafter acquired Liens of Agent on
any or all of the Collateral (the "Senior Lien").
2.2. PRIORITY OF LIENS. The relative priorities of the Subordinated
Lien and the Senior Lien which are set forth in this Section 2 shall apply
without regard to the time or order of creation, attachment or perfection of
such Liens or the time or order of the execution or delivery of any agreements
or other documents creating such Liens and notwithstanding anything to the
contrary in the provisions of the UCC, the Bankruptcy Code, any other
bankruptcy, insolvency or creditors' rights law, or any other applicable law.
The Senior Liens shall continue to be treated as Senior Liens and the provisions
of this Agreement shall continue to govern the relative rights and priorities of
Agent, the Senior Lenders, the Trustee and Noteholders even if all or part of
the Senior Lien or the Senior Debt is subordinated, set aside, avoided,
invalidated or disallowed (whether in connection with a Proceeding or
otherwise).
2.3. STANDSTILL ON ENFORCING SUBORDINATED LIEN. Notwithstanding
anything contained in this Agreement to the contrary, the Trustee (on behalf of
itself and each Noteholder) agrees not to take possession of (whether by set-off
or otherwise) or collect any of the Collateral, commence the enforcement of any
of its rights and remedies with respect to any of the Collateral, foreclose or
realize upon the Subordinated Lien on the Collateral, or exercise any other
right or remedy relating to or affecting the Collateral until the Senior Debt
has been indefeasibly paid in full and all commitments to lend under the Senior
Loan Documents have been terminated.
2.4. EXERCISE OF REMEDIES BY SENIOR LENDERS. The Trustee (on behalf of
itself and each Noteholder) hereby agrees that, for so long as any Senior Debt
or any commitment to lend under the Senior Loan Documents remains outstanding,
Agent and the Senior Lenders exclusively shall be entitled to manage and
exercise any or all of their rights and remedies with respect to the Collateral,
and, except for any notice required to be provided to the Trustee under
applicable law (including, without limitation, notices required by the UCC and
local real estate law), without any obligation to give the Trustee or any
Noteholder prior notice thereof, and that Agent and the Senior Lenders shall,
except as expressly set forth in Section 2.5, be entitled to act without regard
to any interest of the Trustee or any Noteholder in the Collateral and shall
have no liability to the Trustee or any Noteholder for, and Trustee (on behalf
of itself and the Noteholders) hereby waives any
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claims which it may now or hereafter have against Agent or the Senior Lenders
arising out of, any and all actions which Agent or the Senior Lenders take or
omit to take with respect to the Collateral or any proceeds thereof, including,
without limitation, actions or inactions with respect to the maintenance,
preservation, insuring, completion, sale, transfer, exchange or disposition of
or foreclosure upon any of the Collateral, or the collection, settlement or
compromise of any of the Collateral, or the accounting for any surplus.
2.5. AGENT FOR PERFECTION AND POSSESSION OF COLLATERAL.
(a) (i) The Agent agrees to hold any item of Collateral in its
possession (or in the possession of its agents or bailees) as agent for the
Trustee (it being understood that Agent is acting in such agency capacity
for the Trustee for the sole purpose of perfecting the security interest
granted in such Collateral pursuant to the Indenture Documents), subject to
the terms and conditions of this Section 2.5. In the event any of the
Collateral is evidenced by a deposit account, investment property, letter
of credit right or chattel paper and, pursuant to the terms of the Senior
Loan Documents, any of the obligors thereunder is required to deliver an
agreement whereby the Agent obtains "control" (as defined in the UCC) over
such Collateral, the Agent agrees (a) to exercise such "control" as agent
for the Trustee (it being understood that Agent is acting in such agency
capacity for the Trustee for the sole purpose of perfecting the security
interest granted in such Collateral pursuant to the Indenture Documents),
subject to the terms and conditions of this Section 2.5 and (b) endeavor to
have it provided in any agreement providing for such "control" that upon
payment in full of the Senior Debt and termination of all commitments to
lend under the Senior Loan Documents, that the rights of the Agent
thereunder shall, by operation of such agreement, inure to the benefit of
the Trustee to the extent such rights are consistent with the terms of the
Indenture (with Agent having no liability if any such agreement fails to
have such a provision).(ii) The Agent shall be entitled to deal with the
Collateral that is in its possession or under its control in accordance
with the terms of the Senior Loan Documents and this Agreement.
(iii) The Agent shall have no obligation whatsoever to the Trustee or
to any Noteholder to ensure that the Collateral in its possession or under
its control is genuine or owned by one of the Companies or to preserve
rights or benefits of any Person except as expressly set forth in this
Section 2.5. The duties or responsibilities of the Agent to the Trustee
under this Section 2.5 shall be limited to holding the Collateral that is
in its possession or under its control as agent for the Trustee for the
sole purpose of perfecting the security interest of the Trustee therein.
(iv) Upon the payment in full of the Senior Debt and termination of
all commitments to lend under the Senior Loan Documents, except as
otherwise required by applicable law or binding judicial proceedings, the
Agent shall (a) deliver to the Trustee the Collateral in its possession
(including, without limitation, the originals of
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any vehicles titles in its possession relating to motor vehicles owned by a
Company), together with any necessary endorsements (including, without
limitation, any necessary endorsements in respect of motor vehicle titles)
and any other proceeds of the Collateral held by it, to be held by the
Trustee (or in the possession of its agents or bailees), and (b) assign its
rights under each agreement pursuant to which the Agent has obtained
"control" over all or any portion of the Collateral to the Trustee, to the
extent such rights are consistent with the terms of the Indenture and such
assignment is required to allow the Trustee to obtain "control" over such
Collateral.
(b) If the Trustee or any Noteholder obtains possession of any item of
Collateral, such Person shall hold the same as agent and bailee for the
holders of Senior Debt for the sole purpose of perfecting their Lien
therein by such possession and the Trustee or any Noteholder shall promptly
deliver the same to Agent for the benefit of the holders of Senior Debt.
2.6. NO CONTEST OF LIENS; COMMERCIAL REASONABLENESS. The Trustee (on
behalf of itself and the Noteholders) agrees that it shall not contest the
validity, extent, perfection, priority or enforceability of the Senior Lien on
any of the Collateral; provided, that after the Senior Debt has been paid in
full and all commitments to lend under the Senior Loan Documents have been
terminated, the Trustee may take action necessary to remove or terminate a
Senior Lien that is preventing the Trustee from realizing on the Subordinated
Lien.
2.7. RELEASE OF SUBORDINATED LIEN. The Trustee (on behalf of itself
and the Noteholders) agrees that if Agent or the Senior Lenders release or agree
to release any Senior Lien on any Collateral and give written notice thereof to
the Trustee, which notice states that such Collateral is to be sold or
transferred free and clear of the Senior Lien, in each case for the purpose of
repaying or otherwise reducing the balance of the Senior Debt (without the need
for a reduction of the commitments to lend under the Senior Loan Documents), the
Subordinated Lien on such Collateral shall, automatically and without the
necessity of any further action on the part of the Trustee or any Noteholder, be
released and terminated, and promptly upon the request of Agent, the Trustee
shall execute and deliver such documents, instruments and agreements as are
reasonably necessary and are provided to it to further effectuate such release
and termination and to evidence such release and termination in the appropriate
public records. Subject to the terms and conditions of Section 11.3 of the
Indenture as in effect as of the date hereof (or as modified with Agent's
approval), the Trustee and the Noteholders shall be deemed to have consented to
any such sale or transfer and any such release of Collateral will not result in
a default or event of default under any of the Indenture Documents, regardless
of any provision to the contrary contained in any Indenture Document.
2.8. BANKRUPTCY PROCEEDINGS. In any Proceeding, unless the Senior Debt
has been paid in full and all commitments to lend under the Senior Loan
Documents have been terminated, (a) the Trustee (on behalf of itself and the
Noteholders) agrees not to seek adequate protection for any of the Subordinated
Liens and the Trustee (on behalf of itself and
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the Noteholders) agrees that any payment, property or Lien received by the
Trustee or any Noteholder as adequate protection of its claim in any Proceeding
shall constitute a payment or distribution for purposes of Section 2 of this
Agreement, (b) the Trustee (on behalf of itself and the Noteholders) agrees not
to oppose any post-petition financing (or the grant of first-priority or priming
security in connection therewith) or arrangement for the use of cash collateral
(including adequate protection) which Agent or any of the Senior Lenders propose
to provide any Company in any Proceeding, (c) the Trustee (on behalf of itself
and the Noteholders) agrees not to seek adequate protection or other relief from
the automatic stay with respect to the Collateral and (d) the Trustee (on behalf
of itself and the Noteholders) agrees not to take any action which is
inconsistent with the terms of this Agreement. If Agent consents to the sale or
transfer of any of the Collateral, in each case for the purpose of repaying or
otherwise reducing the balance of the Senior Debt (without the need for a
reduction of the commitments to lender under the Senior Loan Documents), during
any Proceeding (whether such sale or transfer is to be made pursuant to Section
363 of the Bankruptcy Code, pursuant to a plan of reorganization or otherwise),
then, subject to the terms of Section 11.3 of the Indenture as in effect as of
the date hereof (or as modified with Agent's approval) the Trustee (on behalf of
itself and the Noteholders) shall be deemed to have consented to any such sale
or transfer and shall, if requested to do so by Agent in connection with any
such sale or transfer, promptly upon being provided with such documentation
execute and deliver to Agent a release of Subordinated Liens with respect to the
Collateral to be sold or transferred. Trustee (on behalf of itself and each
Noteholder) waives any claim it may now or hereafter have arising out of Agent's
or any Senior Lender's election, in any Proceeding instituted under the
Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy
Code, and/or any borrowing or grant of a security interest under Section 364 of
the Bankruptcy Code by any Company, as debtor in possession. Notwithstanding any
of the foregoing in this Section 2.8 or as otherwise set forth in this
Agreement, if any Proceeding the Agent (on behalf of itself and the Senior
Lenders) or any Senior Lender is granted adequate protection in the form of
additional collateral in connection with any post-petition financing, then,
unless the same would materially and adversely affect the rights of Senior
Lenders with respect to the Senior Debt (including the right to receive
post-petition interest on the Senior Debt), the Trustee (on behalf of itself and
the Noteholders), may seek or request adequate protection in the form of a
replacement Lien on such additional collateral, which Lien shall be subordinated
to the Liens securing the Senior Debt and such post-petition financing on the
same basis as the Subordinated Lien is subordinated to the Senior Lien under
this Agreement.
2.9. SUBORDINATION NON-IMPAIRED. All rights of Agent and the Senior
Lenders and all agreements and obligations of the Trustee (on behalf of itself
and the Noteholders) hereunder shall remain in full force and effect
irrespective of:
(a) any amendment, modification, waiver or consent of any term or
provision set forth in the Senior Loan Documents (it being understood that
any Refinancing Senior Loan Documents and any refinancing of the Senior
Debt shall be subject to the limitations set forth in Section 4.11(viii) as
in effect as of the date hereof (or as modified with Agent's approval));
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(b) any change in the time, manner or place of payment of, or any
other term of, all or any portion of the Senior Debt (it being understood
that any Refinancing Senior Loan Documents and any refinancing of the
Senior Debt shall be subject to the limitations set forth in Section
4.11(viii) as in effect as of the date hereof (or as modified with Agent's
approval)); or
(c) subject to the terms of Section 2.5, any change, release or
non-perfection of any security interest in or lien on any collateral
securing all or any portion of the Senior Debt, or any amendment or waiver
of or consent to the departure from, any guaranty for all or any part of
the Senior Debt; provided, that the foregoing terms of this subsection 2.9
shall not be deemed to permit an increase in the principal amount of the
Senior Debt that would be prohibited by the definition of Senior Debt
herein.
2.10. CONTINUING SUBORDINATION. The subordination effected by this
Agreement is a continuing subordination, and the Trustee (on behalf of itself
and the Noteholders) hereby unconditionally waives notice of the incurring of
any Senior Debt or any part thereof. The Trustee (on behalf of itself and the
Noteholders) acknowledges the reliance by Agent and the Senior Lenders upon the
subordination provisions provided for in this Agreement and acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement to Agent and the Senior Lenders, whether the Senior Debt was
created or acquired before or after the incurrence or creation of any
indebtedness under the Indenture Documents and whether Agent or any such Senior
Lender is now known or hereafter becomes known, and Agent and each such Senior
Lender shall be deemed conclusively to have relied upon such subordination
provisions in acquiring and holding, or in continuing to hold, such Senior Debt
and shall be entitled to enforce the provisions of this Agreement directly as if
it were a party to this Agreement.
2.11. SALE, TRANSFER OR OTHER DISPOSITION OF INDENTURE DEBT. The
subordination effected hereby shall survive any sale, assignment, pledge,
disposition or other transfer of all or any portion of the Indenture Debt, and
the terms of this Agreement shall be binding upon the successors and assigns of
Trustee, as provided in Section 9 hereof.
2.12. LEGENDS. Until the termination of this Agreement in accordance
with Section 14 hereof, Trustee will cause to be clearly, conspicuously and
prominently inserted in the Indenture, in each Indenture Note and each other
Indenture Document, as well as any renewals or replacements thereof, the
following legend:
"The liens securing this instrument are subordinate in the manner and
to the extent set forth in that certain Lien Subordination Agreement (the
"Subordination Agreement") dated as of October 8, 2003 among The Bank of
New York, a New York banking corporation (the "Trustee"), Neenah Foundry
Company ("Neenah") and the other "Companies" (as defined therein) party
thereto and Fleet Capital Corporation ("Agent"), to the liens securing the
indebtedness (including interest) owed by the Companies pursuant to or in
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connection with that certain Loan and Security Agreement dated as of
October 8, 2003 among Neenah, certain of the other Companies, Agent and the
lenders from time to time party thereto, as such Loan and Security
Agreement may be amended, supplemented or otherwise modified from time to
time and to indebtedness refinancing the indebtedness under such Loan and
Security Agreement; and each holder of this instrument, by its acceptance
hereof, irrevocably agrees to be bound by the provisions of the
Subordination Agreement and each agreement made therein by the Trustee on
its behalf."
3. MODIFICATIONS. The Senior Lenders may at any time and from time to
time without the consent of or notice to the Trustee or any Noteholder, without
incurring liability to the Trustee or any Noteholder and without impairing or
releasing the obligations of the Trustee (on behalf of itself and the
Noteholders) under this Agreement, change the manner or place of payment or
extend the time of payment of or renew or alter any of the terms of the Senior
Debt, or amend in any manner any agreement, note, guaranty or other instrument
evidencing or securing or otherwise relating to the Senior Debt; provided that
(a) the Senior Lenders shall not increase the principal amount of the Senior
Debt (except as permitted by the definition of Senior Debt herein) and (b) any
Refinancing Senior Loan Documents and any refinancing of the Senior Debt shall
be subject to the limitations set forth in Section 4.11(viii) of the Indenture
as in effect as of the date hereof (or as modified with Agent's approval).
Neenah agrees to provide the Trustee with written notice of any material change
in the manner or place of payment or extension of the time of payment of or
renewal of, or an alteration of any of the material terms of, the Senior Debt
(with any failure by Neenah to provide such notice having no affect on the
validity of the aforementioned terms of this Section 3 in respect of any such
change, extension, renewal or alteration).
4. WAIVER OF CERTAIN RIGHTS.
4.1. MARSHALING. Trustee (on behalf of itself and each Noteholder)
hereby waives any rights it may have under applicable law to assert
the doctrine of marshaling or to otherwise require Agent or the Senior Lenders
to marshal any property of any Company or any guarantor of the Senior Debt for
the benefit of Trustee or any Noteholder.
4.2. RIGHTS RELATING TO AGENT'S ACTIONS WITH RESPECT TO THE
COLLATERAL. Trustee (on behalf of itself and each Noteholder) hereby waives, to
the extent permitted by applicable law, any rights which it may have to enjoin
or otherwise obtain a judicial or administrative order preventing Agent or the
Senior Lenders from taking, or refraining from taking, any action with respect
to all or any part of the Collateral. Without limitation of the foregoing, the
Trustee hereby agrees (a) that it has no right to direct or object to the manner
in which Agent and the Senior Lenders apply the proceeds of the Collateral
resulting from the exercise by Agent and the Senior Lenders of rights and
remedies under the Senior Loan Documents to the Senior Debt and (b) that Agent
has not assumed any obligation to act as the agent for Trustee or any Noteholder
with respect to the Collateral except as expressly set forth in Section 2.5(a).
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5. REPRESENTATIONS AND WARRANTIES. Trustee hereby represents and
warrants to Agent and the Senior Lenders that, as of the date hereof, Trustee
has the power and authority to enter into, execute, deliver and carry out the
terms of this Agreement (on its behalf and on behalf of each Noteholder), all of
which have been duly authorized. Agent hereby represents and warrants to the
Trustee and the Noteholders that, as of the date hereof, Agent has the power and
authority to enter into, execute, deliver and carry out the terms of this
Agreement (on its behalf and on behalf of each Senior Lender), all of which have
been duly authorized. The Companies hereby represent and warrant to (i) Agent
and the Senior Lenders that the execution of this Agreement by the Trustee will
not violate or conflict with any Indenture Document and (ii) Trustee and the
Noteholders that the execution of this Agreement by the Agent will not violate
or conflict with any Senior Loan Document.
6. MODIFICATION. Any modification or waiver of any provision of this
Agreement, or any consent to any departure by any party from the terms hereof,
shall not be effective in any event unless the same is in writing and signed by
Agent, Trustee and Neenah, and then such modification, waiver or consent shall
be effective only in the specific instance and for the specific purpose given.
Any notice to or demand on any party hereto in any event not specifically
required hereunder shall not entitle the party receiving such notice or demand
to any other or further notice or demand in the same, similar or other
circumstances unless specifically required hereunder.
7. FURTHER ASSURANCES. Each party to this Agreement promptly will
execute and deliver such further instruments and agreements and do such further
acts and things as may be reasonably requested in writing by any other party
hereto that may be necessary or desirable in order to effect fully the purposes
of this Agreement.
8. NOTICES. Unless otherwise specifically provided herein, any notice,
request or communication delivered under this Agreement shall be in writing
addressed to the respective party as set forth below and may be personally
served, facsimiled or sent by overnight courier service or certified or
registered United States mail and shall be deemed to have been given (a) if
delivered in person, when delivered; (b) if delivered by facsimile, on the date
of transmission if transmitted on a business day before 4:00 p.m. (Chicago time)
or, if not, on the next succeeding business day; (c) if delivered by overnight
courier, one business day after delivery to such courier properly addressed; or
(d) if by United States mail, four business days after deposit in the United
States mail, postage prepaid and properly addressed.
Notices shall be addressed as follows:
If to Trustee:
The Bank of New York
101 Barclay Street
8th Floor West
New York, NY 10286
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Attention: Corporate Trust Administration
Facsimile: (212) 815-5707
If to the Companies:
c/o Neenah Foundry Company
2121 Brooks Avenue
Neenah, Wisconsin 54957
Attention: Gary W. LaChey
Facsimile: (920) 725-7000
With a copy to:
Kirkland & Ellis LLP
153 East 53rd Street
New York, NY 10022
Attention: Joshua N. Korff, Esq.
Facsimile: (212) 446-4900
If to Agent:
Fleet Capital Corporation
One South Wacker Drive
Suite 1400
Chicago, Illinois 60606
Attention: Loan Administration Manager
Facsimile: (312) 827-4222
With a copy to:
Goldberg, Kohn, Bell, Black, Rosenbloom
& Moritz, Ltd.
55 East Monroe Street
Chicago, Illinois 60603
Attention: David L. Dranoff, Esq.
Facsimile: (312) 332-2196
or in any case, to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this Section 8.
9. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of, and shall be binding upon, the respective successors and assigns of Agent,
the Senior Lenders, the Trustee, the Noteholders and each Company. To the extent
permitted under the
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Senior Loan Documents, the Senior Lenders may, from time to time, without notice
to the Trustee or any Noteholder, assign or transfer any or all of the Senior
Debt or any interest therein to any Person and, notwithstanding any such
assignment or transfer, or any subsequent assignment or transfer, the Senior
Debt shall, subject to the terms hereof, be and remain Senior Debt for purposes
of this Agreement, and every permitted assignee or transferee of any of the
Senior Debt or of any interest therein shall, to the extent of the interest of
such permitted assignee or transferee in the Senior Debt, be entitled to rely
upon and be the third party beneficiary of the subordination provided under this
Agreement and shall be entitled to enforce the terms and provisions hereof to
the same extent as if such assignee or transferee were initially a party hereto.
10. CONFLICT. In the event of any conflict among any term, covenant or
condition of this Agreement, the Indenture Documents or the Senior Loan
Documents, the provisions of this Agreement shall control and govern.
11. HEADINGS. The paragraph headings used in this Agreement are for
convenience only and shall not affect the interpretation of any of the
provisions hereof.
12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13. SEVERABILITY. In the event that any provision of this Agreement is
deemed to be invalid, illegal or unenforceable by reason of the operation of any
law or by reason of the interpretation placed thereon by any court or
governmental authority, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby, and the affected provision shall be modified to the minimum
extent permitted by law so as most fully to achieve the intention of this
Agreement.
14. CONTINUATION OF SUBORDINATION; TERMINATION OF AGREEMENT. This
Agreement shall remain in full force and effect until the indefeasible payment
in full of the Senior Debt and the termination of all lending commitments under
the Senior Loan Documents, after which this Agreement shall terminate without
further action on the part of the parties hereto.
15. APPLICABLE LAW. This Agreement shall be governed by and shall be
construed and enforced in accordance with the internal laws of the State of
Illinois, without regard to conflicts of law principles.
16. WAIVER OF JURY TRIAL. THE TRUSTEE (ON BEHALF OF ITSELF AND THE
NOTEHOLDERS), EACH COMPANY AND AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, ANY OF THE INDENTURE DOCUMENTS OR ANY OF THE SENIOR LOAN DOCUMENTS.
EACH OF THE TRUSTEE (ON BEHALF OF ITSELF AND THE
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NOTEHOLDERS), EACH COMPANY AND AGENT ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE SENIOR LOAN DOCUMENTS AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
OF THE TRUSTEE (ON BEHALF OF ITSELF AND THE NOTEHOLDERS), EACH COMPANY AND AGENT
WARRANTS AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY
WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS.
17. INCORPORATION BY REFERENCE. In connection with its appointment and
acting hereunder the Trustee is entitled to all rights, privileges, benefits,
protections, immunities and indemnities provided to it under the Indenture.
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IN WITNESS WHEREOF, Trustee, each Company and Agent have caused this
Agreement to be executed as of the date first above written.
TRUSTEE:
THE BANK OF NEW YORK, on behalf of the
Noteholders
By ___________________________________
Its___________________________________
COMPANIES:
NFC CASTINGS, INC.
By ___________________________________
Its___________________________________
NEENAH FOUNDRY COMPANY
By ___________________________________
Its___________________________________
DEETER FOUNDRY, INC.
By ___________________________________
Its___________________________________
MERCER FORGE CORPORATION
By ___________________________________
Its___________________________________
DALTON CORPORATION
By ___________________________________
Its___________________________________
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ADVANCED CAST PRODUCTS, INC.
By ___________________________________
Its___________________________________
GREGG INDUSTRIES, INC.
By ___________________________________
Its___________________________________
CAST ALLOYS, INC.
By ___________________________________
Its___________________________________
NEENAH TRANSPORT, INC.
By ___________________________________
Its___________________________________
A & M SPECIALTIES, INC.
By ___________________________________
Its___________________________________
BELCHER CORPORATION
By ___________________________________
Its___________________________________
PEERLESS CORPORATION
By____________________________________
Its___________________________________
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DALTON CORPORATION, WARSAW
MANUFACTURING FACILITY
By ___________________________________
Its___________________________________
DALTON CORPORATION, ASHLAND
MANUFACTURING FACILITY
By ___________________________________
Its___________________________________
DALTON CORPORATION, KENDALLVILLE
MANUFACTURING FACILITY
By ___________________________________
Its___________________________________
DALTON CORPORATION, STRYKER
MACHINING FACILITY CO.
By ___________________________________
Its___________________________________
AGENT:
FLEET CAPITAL CORPORATION, as Agent
for the Senior Lenders
By ___________________________________
Its___________________________________
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