Exhibit 10.1
AMENDMENT NO. 3 TO
LOAN AND SECURITY AGREEMENT
This Amendment No. 3 to Loan and Security Agreement (this "Amendment")
dated as of May 19, 2006, is by and among Borrowers (as defined below), the
undersigned Lenders and Bank of America, N.A., successor to Fleet Capital
Corporation, as Agent for the Lenders who are from time to time party to that
certain Loan and Security Agreement (as amended from time to time, and as
amended hereby, the "Loan Agreement") dated as of October 8, 2003, by and among
Neenah Foundry Company, a Wisconsin corporation ("Neenah"), as a Borrower, the
Subsidiaries of Neenah that are party thereto as Borrowers (Neenah and such
Subsidiaries are collectively, "Borrowers" and each, a "Borrower"), Fleet
Capital Corporation, as Agent and as a Lender, Wachovia Capital Finance
Corporation (Central), f/k/a Congress Financial Corporation (Central), as
Syndication Agent and as a Lender, General Electric Capital Corporation, as
Documentation Agent and as a Lender, and the other Lenders party thereto. All
capitalized terms used in this Amendment and not otherwise defined in this
Amendment shall have the same meanings herein as in the Loan Agreement.
Borrowers have informed Agent and Lenders that on or before July 15,
2006 Tontine Capital Partners, L.P., a Delaware limited partnership ("Tontine")
may be purchasing additional shares of the outstanding Voting Stock of Ultimate
Parent so that Tontine may hold a majority of shares of the outstanding Voting
Stock of Ultimate Parent (the "Tontine Purchase Transaction"). If the Tontine
Purchase Transaction involves the purchase of sufficient shares of the Voting
Stock, the consummation of the Tontine Purchase Transaction would constitute an
Event of Default under subsection 10.1.10 of the Loan Agreement, since Tontine
Capital Partners, L.P. is not currently a Permitted Holder under the Loan
Agreement. Borrowers have requested that Agent and Lenders agree to amend the
Loan Agreement in several respects so as to permit the Tontine Purchase
Transaction to be consummated without resulting in an Event of Default under
subsection 10.1.10 of the Loan Agreement.
Subject to each of the terms and conditions set forth herein, Agent and
the undersigned Lenders have agreed to the request described above.
Now, therefore, the parties hereto hereby agree as follows:
1. Amendments. Subject to the prior satisfaction of the conditions set
forth in Section 2 of this Amendment, and in reliance on the representations and
warranties set forth in Section 3 of this Amendment, the parties hereto agree to
amend the Loan Agreement as follows:
(a) Subsection 8.2.6(i)(d) of the Loan Agreement is hereby amended and
restated in its entirety, as follows:
"(d) repayments or prepayments of principal amounts owing under the
Subordinated Bond Documents, redemptions or repurchases of
Subordinated Bonds in open-market transactions or otherwise or
payments of Deferrable Interest (excluding payments of Deferrable
Interest made pursuant to the foregoing clause (c)), so long as both
immediately prior to and after giving effect to any such repayment,
prepayment, redemption or repurchase, (1) no more than $20,000,000 in
the aggregate has been applied toward such repayments, prepayments,
redemptions and repurchases and payments of Deferrable Interest
(excluding payments of Deferrable Interest made pursuant to the
foregoing clause (c)) during the Term, (2) no Event of Default exists,
(3) average Availability (as determined by Agent in its reasonable
credit judgment) for the thirty (30) day period ending on the date of
any such repayment, prepayment, redemption or repurchase (giving
effect to such repayment, prepayment, redemption, repurchase or
payment of Deferrable Interest for each day in such thirty (30) day
period) is not less than $17,500,000 and (4) actual Availability (as
determined by Agent in its reasonable credit judgment) on the date of
any such repayment, prepayment, redemption, repurchase or payment of
Deferrable Interest is not less than $17,500,000; provided, that in no
event will any such repayment or prepayment be financed with Revolving
Credit Loans if such prepayment or repayment is required due to a
mandatory redemption of Subordinated Bonds resulting from a "Change of
Control" under the Subordinated Bond Documents that was caused by the
consummation of the Tontine Purchase Transaction;"
(b) Subsection 10.1.10 of the Loan Agreement is hereby amended and
restated in its entirety, as follows:
"10.1.10. Change of Ownership. (a) any transaction is consummated the
result of which is that any Person other than the Permitted Holders becomes
the beneficial owner, directly or indirectly, of, in the aggregate, more
than 50% of the total Voting Stock of Ultimate Parent, whether as a result
of the purchase of Securities of Ultimate Parent then outstanding, the
issuance of Securities of Ultimate Parent, any merger, consolidation,
liquidation or dissolution of Ultimate Parent or otherwise; (b) Continuing
Directors no longer constitute a majority of the members of the board of
directors of any of Neenah, Parent or Ultimate Parent; (c) Ultimate Parent
shall cease to own and control, beneficially and of record (directly or
indirectly), 100% of the issued and outstanding Securities of Parent; (d)
Parent shall cease to own and control, beneficially and of record (directly
or indirectly), 100% of the issued and outstanding Securities of Neenah;
(e) Neenah shall cease to own and control, beneficially and of record
(directly or indirectly), 100% of the issued and outstanding Securities of
each other Borrower and each of its other Subsidiaries; (f) any "Change of
Control" under and as defined in the Secured Bond Indenture shall occur,
other than such a "Change of Control" occurring as a result of the
consummation of the Tontine Purchase Transaction, or the selection of a
majority of the members of the board of directors of Ultimate Parent by
Tontine Capital Partners, L.P.; or
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(g) any "Change of Control" under and as defined in the Subordinated Bond
Indenture shall occur, other than such a "Change of Control" occurring as a
result of the consummation of the Tontine Purchase Transaction, or the
selection of a majority of the members of the board of directors of
Ultimate Parent by Tontine Capital Partners, L.P."
(c) The definition of the term Continuing Director contained in
Appendix A to the Loan Agreement is hereby amended and restated in its entirety,
as follows:
"Continuing Director -- as of any date of determination, any member of
the board of directors of Neenah, Parent or Ultimate Parent who (i) was a
member of such board of directors as of the date of the Agreement, (ii) was
nominated for election or elected to such board of directors with the
affirmative vote of a majority of the Continuing Directors who were members
of such board of directors at the time of such nomination or election or
(iii) was selected by Tontine Capital Partners, L.P., MacKay Shields LLC,
Citicorp Mezzanine III, L.P. or the Trust Company of the West."
(d) The definition of the term Permitted Holders contained in Appendix
A to the Loan Agreement is hereby amended and restated in its entirety, as
follows:
"Permitted Holders -- each of Tontine Capital Partners, L.P., MacKay
Shields LLC, Citicorp Mezzanine III, L.P., Metropolitan Life Insurance
Company, Exis Differential Holdings, Ltd., 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. and TCW High Income Partners II, Ltd., together
with the Related Persons and the Affiliates of each of such Persons."
(e) A new definition of the term Tontine Purchase Transaction is hereby
inserted into Appendix A to the Loan Agreement, in appropriate alphabetical
order, as follows:
"Tontine Purchase Transaction -- the purchase by Tontine Capital
Partners, L.P., a Delaware limited partnership, of a portion of the Voting
Stock of Ultimate Parent pursuant to (i) a Securities Purchase Agreement
dated as of May 19, 2006 among Tontine Capital Partners, L.P. and certain
holders of such Voting Stock and (ii) a Stock Purchase Agreement dated as
of May 19, 2006 among Tontine Capital Partners, L.P. and certain holders of
such Voting Stock."
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2. Conditions to Effectiveness. The effectiveness of this Amendment
shall be subject to the prior satisfaction of the following conditions:
(a) Agent shall have received an execution version of this Amendment
signed by Borrowers, Agent and Majority Lenders;
(b) Agent shall have received fully executed copies of the agreements
evidencing the Tontine Purchase Transaction, including without limitation that
certain Securities Purchase Agreement and that certain Stock Purchase Agreement,
each of even date herewith; and
(c) no Default or Event of Default shall be in existence.
3. Representations and Warranties. To induce Agent and the Lenders
party hereto to execute and deliver this Amendment, each Borrower hereby
represents and warrants to Lenders that, after giving effect to this Amendment:
(a) All representations and warranties contained in the Loan Agreement
and the other Loan Documents are true and correct in all material respects on
and as of the date of this Amendment, in each case as if then made, other than
representations and warranties that expressly relate solely to an earlier date
(in which case such representations and warranties were true and accurate on and
as of such earlier date);
(b) No Default or Event of Default has occurred and is continuing; and
(c) The execution and delivery by such Borrower of this Amendment does
not require the consent or approval of any Person, except such consents and
approvals as have been obtained.
4. Scope. This Amendment shall have the effect of amending the Loan
Agreement and the other Loan Documents as appropriate to express the agreements
contained herein. In all other respects, the Loan Agreement and the other Loan
Documents shall remain in full force and effect in accordance with their
respective term.
5. Reaffirmation and Confirmation. Each Borrower hereby ratifies,
affirms, acknowledges and agrees that the Loan Agreement and the other Loan
Documents represent the valid, enforceable and collectible obligations of such
Borrower, and each Borrower further acknowledges that there are no existing
claims, defenses, personal or otherwise, or rights of setoff whatsoever with
respect to the Loan Agreement or any of the Loan Documents. Each Borrower hereby
agrees that this Amendment in no way acts as a release or relinquishment of the
Liens and rights securing payments of the Obligations. The Liens and rights
securing payment of the Obligations are hereby ratified and confirmed by each
Borrower in all respects.
6. Counterparts. This Amendment may be executed in counterpart and by
different parties hereto in separate counterparts, each of which, when taken
together, shall constitute but one and the same instrument.
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7. Expenses. All of Agent's reasonable costs and expenses, including,
without limitation, attorney's fees, incurred in connection with the preparation
of this Amendment and all related documents shall be paid by Borrowers upon the
request of Agent.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first above written.
BORROWERS:
NEENAH FOUNDRY COMPANY
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
DEETER FOUNDRY, INC.
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
MERCER FORGE CORPORATION
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
DALTON CORPORATION
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
DALTON CORPORATION, STRYKER
MACHINING FACILITY CO.
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
Signature Page to Amendment No. 3 to Loan and Security Agreement
DALTON CORPORATION, WARSAW
MANUFACTURING FACILITY
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
ADVANCED CAST PRODUCTS, INC.
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
GREGG INDUSTRIES, INC.
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
A & M SPECIALTIES, INC.
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
NEENAH TRANSPORT, INC.
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
DALTON CORPORATION, KENDALLVILLE
MANUFACTURING FACILITY
By /s/ Gary LaChey
Its Corporate Vice President and
Chief Financial Officer
Signature Page to Amendment No. 3 to Loan and Security Agreement
BANK OF AMERICA, N.A., successor to
FLEET CAPITAL CORPORATION, as Agent and
as a Lender
By /s/ Robert Lund
Its Senior Vice President
WACHOVIA CAPITAL FINANCE
CORPORATION (CENTRAL), f/k/a CONGRESS
FINANCIAL CORPORATION (CENTRAL),
as Syndication Agent and as a Lender
By /s/ Laura O. Wheeland
Its Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, as Documentation Agent
and as a Lender
By /s/ Bond Harberts
Its Duly Authorized Signatory
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By
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Its
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Signature Page to Amendment No. 3 to Loan and Security Agreement