Exhibit 10.1
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NEENAH FOUNDRY COMPANY
AND
THE SUBSIDIARIES OF NEENAH FOUNDRY COMPANY
IDENTIFIED ON THE SIGNATURE PAGES HERETO,
AS BORROWERS
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LOAN AND SECURITY AGREEMENT
Dated as of October 8, 2003
$92,085,000
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FLEET CAPITAL CORPORATION,
INDIVIDUALLY AND AS AGENT FOR ANY LENDER WHICH IS
OR BECOMES A PARTY HERETO,
FLEET SECURITIES, INC.,
AS ARRANGER,
CONGRESS FINANCIAL CORPORATION (CENTRAL),
INDIVIDUALLY AND AS SYNDICATION AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION,
INDIVIDUALLY AND AS DOCUMENTATION AGENT, AND
THE ADDITIONAL LENDERS NOW AND FROM TIME TO TIME
PARTY HERETO
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TABLE OF CONTENTS
PAGE
SECTION 1. CREDIT FACILITY...................................................... 1
1.1 Loans......................................................... 1
1.2 Letters of Credit; LC Guaranties.............................. 4
1.3 Term Loan..................................................... 5
1.4 Borrowing Agent............................................... 6
SECTION 2. INTEREST, FEES AND CHARGES........................................... 6
2.1 Interest...................................................... 6
2.2 Computation of Interest and Fees.............................. 7
2.3 Fee Letter.................................................... 7
2.4 Letter of Credit and LC Guaranty Fees......................... 7
2.5 Unused Line Fee............................................... 8
2.6 Prepayment Fee................................................ 8
2.7 Audit Fees.................................................... 9
2.8 Reimbursement of Expenses..................................... 9
2.9 Bank Charges.................................................. 10
2.10 Collateral Protection Expenses; Appraisals.................... 10
2.11 Payment of Charges............................................ 11
2.12 No Deductions................................................. 11
2.13 Joint and Several Obligations................................. 12
SECTION 3. LOAN ADMINISTRATION.................................................. 13
3.1 Manner of Borrowing Revolving Credit Loans/LIBOR Option....... 13
3.2 Payments...................................................... 17
3.3 Mandatory and Optional Prepayments............................ 19
3.4 Application of Payments and Collections....................... 22
3.5 All Loans to Constitute One Obligation........................ 23
3.6 Loan Account.................................................. 23
3.7 Statements of Account......................................... 23
3.8 Increased Costs............................................... 24
3.9 Basis for Determining Interest Rate Inadequate................ 25
3.10 Sharing of Payments........................................... 25
3.11 Optional Prepayment/Replacement of Lenders.................... 26
SECTION 4. TERM AND TERMINATION................................................. 26
4.1 Term of Agreement............................................. 26
4.2 Termination................................................... 27
SECTION 5. SECURITY INTERESTS................................................... 28
5.1 Security Interest in Collateral............................... 28
5.2 Other Collateral.............................................. 29
5.3 Lien Perfection; Further Assurances........................... 30
5.4 Lien on Realty................................................ 30
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SECTION 6. COLLATERAL ADMINISTRATION.................................................. 31
6.1 General............................................................. 31
6.2 Administration of Accounts.......................................... 32
6.3 Administration of Inventory......................................... 34
6.4 Administration of Equipment......................................... 34
6.5 Payment of Charges.................................................. 35
SECTION 7. REPRESENTATIONS AND WARRANTIES............................................. 35
7.1 General Representations and Warranties.............................. 35
7.2 Continuous Nature of Representations and Warranties................. 42
7.3 Survival of Representations and Warranties.......................... 42
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS........................................ 43
8.1 Affirmative Covenants............................................... 43
8.2 Negative Covenants.................................................. 47
8.3 Specific Financial Covenants........................................ 57
SECTION 9. CONDITIONS PRECEDENT....................................................... 57
9.1 Conditions Precedent to Initial Loans and Other Initial Credit
Accommodations.................................................... 57
9.2 Conditions Precedent to all Loans and other Credit Accommodations... 59
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT......................... 59
10.1 Events of Default................................................... 59
10.2 Acceleration of the Obligations..................................... 63
10.3 Other Remedies...................................................... 63
10.4 Set Off and Sharing of Payments..................................... 64
10.5 Remedies Cumulative~ No Waiver...................................... 65
SECTION 11. THE AGENT................................................................. 65
11.1 Authorization and Action............................................ 65
11.2 Agent's Reliance, Etc............................................... 66
11.3 Fleet and Affiliates................................................ 67
11.4 Lender Credit Decision.............................................. 67
11.5 Indemnification..................................................... 67
11.6 Rights and Remedies to be Exercised by Agent Only................... 68
11.7 Agency Provisions Relating to Collateral............................ 68
11.8 Agent's Right to Purchase Commitments............................... 69
11.9 Right of Sale....................................................... 69
11.10 [Intentionally Omitted]............................................. 71
11.11 Resignation of Agent: Appointment of Successor...................... 71
11.12 Audit and Examination Reports; Disclaimer by Lenders................ 71
11.13 Syndication Agent, Documentation Agent and Arranger................. 72
11.14 Real Property Collateral............................................ 72
SECTION 12. MISCELLANEOUS............................................................. 73
12.1 Power of Attorney................................................... 73
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12.2 Indemnity........................................................... 74
12.3 Amendments.......................................................... 75
12.4 Sale of Interest.................................................... 76
12.5 Severability........................................................ 76
12.6 Successors and Assigns.............................................. 76
12.7 Cumulative Effect; Conflict of Terms................................ 76
12.8 Execution in Counterparts........................................... 76
12.9 Notice.............................................................. 76
12.10 Consent ............................................................ 77
12.11 Credit Inquiries.................................................... 77
12.12 Time of Essence..................................................... 78
12.13 Entire Agreement.................................................... 78
12.14 Interpretation...................................................... 78
12.15 Confidentiality..................................................... 78
12.16 GOVERNING LAW: CONSENT TO FORUM..................................... 79
12.17 WAIVERS ............................................................ 80
12.18 Advertisement....................................................... 80
12.19 Non-Applicability of Exculpation Provisions in Confirmation Order... 80
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made as of this 8th day of
October, 2003, by and among FLEET CAPITAL CORPORATION ("Fleet"), a Rhode Island
corporation with an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, individually as a Lender and as Agent ("Agent") for itself and
the other Lenders, each other financial institution which is or becomes a party
hereto and any registered assigns of any such Person (each such financial
institution, including Fleet, is referred to hereinafter individually as a
"Lender" and collectively as the "Lenders"), CONGRESS FINANCIAL CORPORATION
(CENTRAL), individually as a Lender and as Syndication Agent for Lenders,
GENERAL ELECTRIC CAPITAL CORPORATION, individually as a Lender and as
Documentation Agent for Lenders, FLEET SECURITIES, INC., as arranger
("Arranger"), and each of NEENAH FOUNDRY COMPANY, a Wisconsin corporation with
its chief executive office and principal place of business at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Neenah") and EACH SUBSIDIARY OF NEENAH THAT IS
IDENTIFIED ON THE SIGNATURE PAGES HERETO AS A BORROWER; Neenah and each such
Subsidiary are hereafter referred to collectively, as "Borrowers" and
individually, as "Borrower". Capitalized terms used in this Agreement have the
meanings assigned to them in Appendix A, General Definitions. Accounting terms
not otherwise specifically defined herein shall be construed in accordance with
GAAP consistently applied.
SECTION 1. CREDIT FACILITY
Subject to the terms and conditions of, and in reliance upon
the representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make available to Borrowers a Total Credit Facility
of up to $92,085,000 upon a Borrower's request therefor, as follows:
1.1 Loans.
1.1.1 Revolving Credit Loans.
Subject to the terms and conditions hereof, each Lender
agrees, severally and not jointly, to make Revolving Credit Loans to
Borrowers from time to time during the period from the date hereof to
but not including the last day of the Term, as requested by Borrowers
in the manner set forth in Section 1.4 and subsection 3.1.1 hereof, up
to a maximum principal amount at any time outstanding equal to the
lesser of (i) such Lender's Revolving Loan Commitment minus the product
of such Lender's Revolving Loan Percentage and the LC Amount minus the
product of such Lender's Revolving Loan Percentage and Reserves, if any
and (ii) the product of (A) such Lender's Revolving Loan Percentage and
(B) an amount equal to the Borrowing Base at such time minus the LC
Amount minus Reserves, if any. Subject to the third to last sentence of
this subsection 1.1.1, Agent shall have the right to establish
Reserves, including without limitation or duplication with respect to
(i) price adjustments, damages, unearned discounts, returned products
or other matters for which a Borrower issues credit memoranda in the
ordinary course of such Borrower's business; (ii) potential dilution
related to Accounts; (iii) shrinkage, spoilage and obsolescence of
Inventory; (iv) slow moving Inventory; (v) other sums due and payable
within ninety (90) days and chargeable (but not yet charged) against a
Borrower's Loan Account as Revolving Credit
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Loans under any section of this Agreement; (vi) amounts owing by a
Borrower to any Person to the extent secured by a Lien on, or trust
over, any Property of a Borrower (excluding Liens permitted under
subsection 8.2.5(iv) or subsection 8.2.5(ix); (vii) amounts owing by a
Borrower to Bank, Agent or any Affiliate of Bank or Agent in connection
with Product Obligations; (viii) the Rebuild Reserve, (ix) Inventory
that consists of coke, sand or grinding wheels or that consists of
Inventory in transit; (x) the real Property, fixed assets and Inventory
of Mercer located on or at ▇▇▇▇▇▇'▇ facility located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ in Mercer, Pennsylvania, but only if Borrowers have failed to
procure within 90 days of the date of this Agreement flood insurance in
respect of such facility in Mercer, Pennsylvania that is in an amount
of at least $2,500,000, has a deductible that does not exceed $500,000,
and is otherwise reasonably satisfactory to Agent, (xi) any Rent
Reserves and (xii) such other specific events, conditions or
contingencies as to which Agent, in its reasonable credit judgment
exercised in good faith, determines Reserves should be established from
time to time hereunder. In addition to the foregoing Reserves,
commencing on the first day of the second fiscal quarter after the
fiscal quarter during which the MACT Deadline has been established,
Agent shall establish a Reserve that accretes in no more than eight
equal, successive quarterly installments on the first day of each
fiscal quarter to a total that is the MACT Reserve Amount (which
installments shall be scheduled such that the last installment occurs
on a date that is at least six months prior to the MACT Deadline);
provided, that the amount of the Reserve established pursuant to this
sentence shall be reduced on a dollar-for-dollar basis by the amount of
MACT Capital Expenditures actually made by Borrowers (as evidenced by
written documentation that is reasonably acceptable to Agent).
Notwithstanding anything contained in this Agreement to the contrary,
(a) except with respect to the Reserve provided for in the immediately
preceding sentence and in clauses (v), (vii), (viii), (ix) and (x) in
the second sentence of this subsection 1.1.1, so long as no Event of
Default is in existence Agent shall only establish Reserves based on
demonstrable changes in the underlying assets and liabilities of
Borrowers and Borrowers' Subsidiaries (including, without limitation, a
contingent liability of a Borrower or a Subsidiary of a Borrower having
become an actual liability of such Borrower or such Subsidiary) that
Agent determines is necessary in its reasonable credit judgment and (b)
Agent shall not establish any Reserves in respect of any matters
relating to any items of Collateral that have been taken into account
in determining Eligible Inventory or Eligible Accounts, as applicable.
Agent agrees that it shall provide Borrowers with reasonably prompt
notice of the establishment of a Reserve. The Revolving Credit Loans
shall be repayable in accordance with the terms of the Revolving Notes
and shall be secured by all of the Collateral.
1.1.2 Overadvances.
Insofar as a Borrower may request and Agent or all Lenders (as
provided below) may be willing in their sole and absolute discretion to
make Revolving Credit Loans to such a Borrower at a time when the
unpaid balance of Revolving Credit Loans plus the sum of the LC Amount
plus the amount of LC Obligations that have not been reimbursed by
Borrowers or funded with a Revolving Credit Loan, plus reserves,
exceeds, or would exceed with the making of any such Revolving Credit
Loan, the Borrowing Base (such Loan or Loans being herein referred to
individually as an "Overadvance" and collectively, as "Overadvances"),
Agent shall enter such Overadvances as debits in the Loan Account. All
Overadvances shall be repaid on
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demand, shall be secured by the Collateral and shall bear interest as
provided in this Agreement for Revolving Credit Loans generally. Any
Overadvance made pursuant to the terms hereof shall be made by all
Lenders ratably in accordance with their respective Revolving Loan
Percentages. Overadvances in the aggregate amount of $1,000,000 or less
may, unless a Default or Event of Default has occurred and is
continuing (other than a Default or Event of Default caused by the
existence or making of such Overadvance), be made in the sole and
absolute discretion of Agent. Overadvances in an aggregate amount of
more than $1,000,000 and Overadvances to be made after the occurrence
and during the continuation of a Default or an Event of Default (other
than a Default or Event of Default caused by the existence or making of
such Overadvance) shall require the consent of all Lenders. The
foregoing notwithstanding, in no event, unless otherwise consented to
by all Lenders, (w) shall any Overadvances be outstanding for more than
sixty (60) consecutive days, (x) after all outstanding Overadvances
have been repaid, shall Agent or Lenders make any additional
Overadvances unless sixty (60) days or more have expired since the last
date on which any Overadvances were outstanding, (y) shall Overadvances
be outstanding on more than ninety (90) days within any one hundred
eighty day (180) period or (z) shall Agent make Revolving Credit Loans
on behalf of Lenders under this subsection 1.1.2 to the extent such
Revolving Credit Loans would cause a Lender's share of the Revolving
Credit Loans to exceed such Lender's Revolving Loan Commitment minus
such Lender's Revolving Loan Percentage of the LC Amount.
1.1.3 Use of Proceeds.
The Revolving Credit Loans shall be used solely for (i) the
satisfaction of existing Indebtedness of Chapter 11 Debtors in
connection with the Plan of Reorganization and the Confirmation
(including the payment of an aggregate of $30,000,000 in cash on the 11
1/8% Series A, B, D and F Senior Subordinated Notes due 2007 of Neenah
Foundry Company, Chapter 11 Debtor-in-Possession, in connection with
the satisfaction in full of such Senior Subordinated Notes), (ii) the
payment of fees and expenses associated with the transactions
contemplated hereby, including the transactions provided for under the
Plan of Reorganization, (iii) Borrowers' general operating capital
needs (including Capital Expenditures permitted hereunder) in a manner
consistent with the provisions of this Agreement and all applicable
laws, (iv) to fund Permitted Acquisitions, (v) repayments or
prepayments of principal amounts owing under the Subordinated Bond
Documents that are permitted to be made under subsection 8.2.6(i) and
(vi) other purposes permitted under this Agreement.
1.1.4 Swingline Loans.
Subject to the terms and conditions hereof, in order to reduce
the frequency of transfers of funds from Lenders to Agent for making
Revolving Credit Loans, Agent shall be permitted (but not required) to
make Revolving Credit Loans to Borrowers upon request by Borrowers
(such Revolving Credit Loans to be designated as "Swingline Loans")
provided that the aggregate amount of Swingline Loans outstanding at
any time will not (i) exceed $5,000,000; (ii) when added to the
principal amount of Agent's other Revolving Credit Loans then
outstanding plus Agent's Revolving Loan Percentage of the LC Amount,
exceed Agent's Revolving Credit Commitment; or (iii) when added to the
principal amount of all other Revolving Credit Loans then outstanding
plus the LC Amount, exceed the Borrowing Base. Within the foregoing
limits, each Borrower may borrow, repay and reborrow Swingline Loans.
All Swingline Loans shall be treated as Revolving Credit Loans for
purposes of this
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Agreement, except that (a) all Swingline Loans shall be Base Rate
Revolving Portions and (b) notwithstanding anything herein to the
contrary (other than as set forth in the next succeeding sentence), all
principal and interest paid with respect to Swingline Loans shall be
for the sole account of Agent in its capacity as the lender of
Swingline Loans. Notwithstanding the foregoing, not more than 2
Business Days after (1) Lenders receive notice from Agent that a
Swingline Loan has been advanced in respect of a drawing under a Letter
of Credit or LC Guaranty or (2) in any other circumstance, demand is
made by Agent during the continuance of an Event of Default, each
Lender shall irrevocably and unconditionally purchase and receive from
Agent, without recourse or warranty from Agent, an undivided interest
and participation in each Swingline Loan to the extent of such Lender's
Revolving Loan Percentage thereof, by paying to Agent, in same day
funds, an amount equal to such Lender's Revolving Loan Percentage of
such Swingline Loan. Swingline Loans will be settled between the Agent
and the Lenders in the manner set forth in subsection 3.1.3.
1.1.5 Agent Loans.
Upon the occurrence and during the continuance of an Event of
Default, Agent, in its sole discretion, may make Revolving Credit Loans
on behalf of Lenders, in an aggregate amount not to exceed $3,000,000
(such maximum amount being reduced by the outstanding balance of any
Overadvances that have been authorized by Agent alone pursuant to
subsection 1.1.2), if Agent, in its reasonable business judgment, deems
that such Revolving Credit Loans are necessary or desirable (i) to
protect all or any portion of the Collateral, (ii) to enhance the
likelihood, or maximize the amount of, repayment of the Loans and the
other Obligations, or (iii) to pay any other amount chargeable to any
Borrower pursuant to this Agreement, including without limitation
costs, fees and expenses as described in Sections 2.8 and 2.9
(hereinafter, "Agent Loans"); provided, that in no event shall (a) the
maximum principal amount of the Revolving Credit Loans exceed the
aggregate Revolving Loan Commitments and (b) Majority Lenders may at
any time revoke Agent's authorization to make Agent Loans. Any such
revocation must be in writing and shall become effective prospectively
upon Agent's receipt thereof. Each Lender shall be obligated to advance
its Revolving Loan Percentage of each Agent Loan. If Agent Loans are
made pursuant to the preceding sentence, then (a) the Borrowing Base
shall be deemed increased by the amount of such permitted Agent Loans,
but only for so long as Agent allows such Agent Loans to be
outstanding, and (b) notwithstanding any terms contained herein to the
contrary (including, without limitation, the terms of subsection
10.2.2), all Lenders that have committed to make Revolving Credit Loans
shall be bound to make, or permit to remain outstanding, such Agent
Loans based upon their Revolving Loan Percentages in accordance with
the terms of this Agreement.
1.2 Letters of Credit; LC Guaranties.
1.2.1 Issuance of Letters of Credit and LC Guarantees.
Subject to the terms and conditions hereof, each of Agent and,
if applicable, any Lender designated by Agent and Neenah as a Letter of
Credit Issuer (each such Lender, a "Letter of Credit Issuer") agrees,
if requested by a Borrower, to (i) issue its, or, in the case of Agent,
cause to be issued by Bank or another Affiliate of Agent, on the date
requested by such Borrower, Letters of Credit for the account of a
Borrower or (ii) execute LC Guaranties by which Agent, such
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Letter of Credit Issuer, Bank, or another Affiliate of Agent, on the
date requested by a Borrower, shall guaranty the payment or performance
by a Borrower of its reimbursement obligations with respect to letters
of credit issued for a Borrower's account by other Persons; provided
that the LC Amount shall not exceed $5,000,000 at any time. No Letter
of Credit or LC Guaranty may have an expiration date after the last day
of the Term.
1.2.2 Lender Participation. Immediately upon the issuance of a
Letter of Credit or an LC Guaranty under this Agreement, each Lender
shall be deemed to have irrevocably and unconditionally purchased and
received from Agent, without recourse or warranty, an undivided
interest and participation therein equal to the applicable LC
Obligations multiplied by such Lender's Revolving Loan Percentage.
Agent will notify each Lender on a weekly basis, or if determined by
Agent, a more frequent basis, upon presentation to it of a draw under a
Letter of Credit or a demand for payment under a LC Guaranty. On a
weekly basis, or more frequently if requested by Agent, each Lender
shall make payment to Agent in immediately available funds, of an
amount equal to such Lender's pro rata share of the amount of any
payment made by Agent in respect to any Letter of Credit or LC
Guaranty. The obligation of each Lender to reimburse Agent under this
subsection 1.2.2 shall be unconditional, continuing, irrevocable and
absolute, except in respect of indemnity claims arising out of Agent's
gross negligence or willful misconduct. In the event that any Lender
fails to make payment to Agent of any amount due under this subsection
1.2.2, Agent shall be entitled to receive, retain and apply against
such obligation the principal and interest otherwise payable to such
Lender hereunder until Agent receives such payment from such Lender or
such obligation is otherwise fully satisfied; provided, however, that
nothing contained in this sentence shall relieve such Lender of its
obligation to reimburse the Agent for such amount in accordance with
this subsection 1.2.2.
1.2.3 Reimbursement. Notwithstanding anything to the contrary
contained herein, Borrowers, Agent, each Letter of Credit Issuer and
Lenders hereby agree that all LC Obligations and all obligations of
each Borrower relating thereto shall be satisfied by the prompt
issuance of one or more Revolving Credit Loans that are Base Rate
Revolving Portions, which Borrowers hereby acknowledge are requested
and Lenders hereby agree to fund. In the event that Revolving Credit
Loans are not, for any reason, promptly made to satisfy all then
existing LC Obligations, each Lender hereby agrees to pay to Agent, on
demand, an amount equal to such LC Obligations multiplied by such
Lender's Revolving Loan Percentage, and until so paid, such amount
shall be secured by the Collateral and shall bear interest and be
payable at the same rate and in the same manner as Base Rate Revolving
Portions. In no event shall Agent or any Lender make any Revolving
Credit Loan in respect of any Obligation that has already been
satisfied by any Borrower.
1.3 Term Loan.
Each Lender, severally and not jointly, agrees to make a term
loan (collectively, the "Term Loan") to Borrowers on the Closing Date, in the
aggregate principal amount of such Lender's Term Loan Commitment, which shall be
repayable in accordance with the terms hereof and the terms of the Term Notes
and shall be secured by all of the Collateral. The proceeds of
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the Term Loan shall be used solely for the purposes for which the proceeds of
the Revolving Credit Loans are authorized to be used.
1.4 Borrowing Agent.
For ease of administration of this Agreement, each Borrower
other than Neenah hereby appoints Neenah as its borrowing agent hereunder. In
such capacity, Neenah will request all Revolving Credit Loans to be made
pursuant to Section 1.1, will request all Letters of Credit and LC Guaranties to
be issued pursuant to Section 1.2 and will submit all LIBOR Requests with
respect to obtaining any LIBOR Portion pursuant to subsection 3.1.7, converting
any Base Rate Portion into a LIBOR Portion pursuant to subsection 3.1.8 or
continuing any LIBOR Portion into a subsequent Interest Period pursuant to
subsection 3.1.9, in each case pursuant to the procedures set forth in Section
3.1. Notwithstanding anything to the contrary contained in this Agreement, no
Borrower other than Neenah shall be entitled to request any Revolving Credit
Loans, Letters of Credit or LC Guaranties or to submit any LIBOR Requests
hereunder. The proceeds of all Revolving Credit Loans made hereunder shall be
advanced to or at the direction of Neenah and used solely for the purposes
described in subsection 1.1.3.
SECTION 2. INTEREST, FEES AND CHARGES
2.1 Interest.
2.1.1 Rates of Interest. Interest shall accrue on the
principal amount of the Base Rate Revolving Portions and the Base Rate
Term Portions outstanding at the end of each day at a fluctuating rate
per annum equal to the Applicable Margin then in effect for the Base
Rate Revolving Portions or the Base Rate Term Portions, as applicable
plus the Base Rate. Said rate of interest shall increase or decrease by
an amount equal to any increase or decrease in the Base Rate, effective
as of the opening of business on the day that any such change in the
Base Rate occurs. If a Borrower exercises its LIBOR Option as provided
in Section 3.1, interest shall accrue on the principal amount of the
LIBOR Revolving Portions and the LIBOR Term Portions outstanding at the
end of each day at a rate per annum equal to the Applicable Margin then
in effect for the LIBOR Revolving Portions or the LIBOR Term Portions,
as applicable plus the LIBOR applicable to each LIBOR Portion for the
corresponding Interest Period.
2.1.2 Default Rate of Interest. At the option of Agent or the
Majority Lenders, upon and after the occurrence of an Event of Default
arising under subsection 10.1.1, subsection 10.1.3 (as a result of a
breach of subsection 8.1.3, subsection 8.1.4, subsection 8.2.4,
subsection 8.2.6, subsection 8.2.7, subsection 8.2.8, subsection 8.2.12
or Section 8.3) or subsection 10.1.8, and during the continuation
thereof, the principal amount of all Loans shall bear interest at a
rate per annum equal to 2.0% plus the interest rate otherwise
applicable thereto (the "Default Rate").
2.1.3 Maximum Interest. In no event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under the Notes
and charged or collected pursuant to the terms of this Agreement or
pursuant to the Notes exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final
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determination, deem applicable hereto. If any provisions of this
Agreement or the Notes are in contravention of any such law, such
provisions shall be deemed amended to conform thereto (the "Maximum
Rate"). If at any time, the amount of interest paid hereunder is
limited by the Maximum Rate, and the amount at which interest accrues
hereunder is subsequently below the Maximum Rate, the rate at which
interest accrues hereunder shall remain at the Maximum Rate, until such
time as the aggregate interest paid hereunder equals the amount of
interest that would have been paid had the Maximum Rate not applied.
2.2 Computation of Interest and Fees.
Interest, Letter of Credit and LC Guaranty fees and Unused
Line Fees hereunder shall be calculated daily and shall be computed on the
actual number of days elapsed over a year of 360 days.
2.3 Fee Letter.
Borrowers shall jointly and severally pay to Agent certain
fees and other amounts in accordance with the terms of the fee letter among
Borrowers and Agent (the "Fee Letter").
2.4 Letter of Credit and LC Guaranty Fees.
Borrowers shall jointly and severally pay to Agent:
(i) for standby Letters of Credit and LC
Guaranties of standby letters of credit, for the ratable
benefit of Lenders a per annum fee equal to the Applicable
Margin then in effect for LIBOR Revolving Portions multiplied
by the weighted average daily balance of the aggregate undrawn
face amount of such Letters of Credit and LC Guaranties
outstanding from time to time during the term of this
Agreement, plus all normal and customary charges associated
with the issuance thereof, which fees and charges shall be
deemed fully earned upon issuance of each such Letter of
Credit or LC Guaranty, shall be due and payable in arrears on
the first Business Day of each month and shall not be subject
to rebate or proration upon the termination of this Agreement
for any reason; provided that at any time that the Default
Rate is in effect, the fee applicable under this subsection
shall be equal to the otherwise applicable fee plus 2.00%;
(ii) for documentary Letters of Credit and LC
Guaranties of documentary letters of credit, for the ratable
benefit of Lenders a per annum fee equal to the Applicable
Margin then in effect for LID OR Revolving Portions multiplied
by the weighted average daily balance of the aggregate undrawn
face amount of such Letters of Credit and LC Guaranties
outstanding from time to time during the term of this
Agreement, plus all normal and customary charges associated
with the issuance and administration of each such Letter of
Credit or LC Guaranty (which fees and charges shall be fully
earned upon issuance, renewal or extension (as the case may
be) of each such Letter of Credit or LC Guaranty, shall be due
and payable in arrears on the first Business Day of each
month, and shall not be subject to rebate or proration upon
the termination of this
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Agreement for any reason); provided that at any time that the
Default Rate is in effect, the fee applicable under this
subsection shall be equal to the otherwise applicable fee plus
2.00%;
(iii) with respect to all Letters of Credit and LC
Guaranties issued by Agent, Bank or another Affiliate of
Agent, for the account of Agent only, a fronting fee equal to
0.125% per annum of the weighted average daily balance of the
aggregate undrawn face amount of such Letters of Credit and LC
Guaranties outstanding from time to time during the term of
this Agreement issued by such Person, which fronting fees
shall be due and payable monthly in arrears on the first
Business Day of each month and shall not be subject to rebate
or proration upon the termination of this Agreement for any
reason; and
(iv) with respect to all Letters of Credit and LC
Guaranties issued by a Letter of Credit Issuer, for the
account of such Letter of Credit Issuer only, a fronting fee
equal to 0.125% per annum of the weighted average daily
balance of the aggregate undrawn face amount of such Letters
of Credit and LC Guaranties outstanding from time to time
during the term of this Agreement issued by such Letter of
Credit Issuer, which fronting fees shall be due and payable
monthly in arrears on the first Business Day of each month and
shall not be subject to rebate or proration upon the
termination of this Agreement for any reason.
2.5 Unused Line Fee.
Borrowers shall jointly and severally pay to Agent, for the
ratable benefit of Lenders, a fee (the "Unused Line Fee") equal to the
Applicable Margin per annum for the Unused Line Fee multiplied by the average
daily amount by which the Revolving Credit Maximum Amount exceeds the sum of (i)
the outstanding principal balance of the Revolving Credit Loans plus (ii) the LC
Amount; provided, that for purposes of allocating the Unused Line Fee among
Lenders, outstanding Swingline Loans shall not be included as part of the
outstanding balance of the Loans for purposes of calculating such fees owed to
Lenders other than Agent. The Unused Line Fee shall be payable monthly in
arrears on the first day of each month hereafter.
2.6 Prepayment Fee.
Upon the termination of this Agreement by Borrowers pursuant
to subsection 4.2.2, upon any optional prepayment of the Term Loan pursuant to
subsection 3.3.5 or upon any optional reduction of the Revolving Loan
Commitments pursuant to subsection 3.3.6, Borrowers shall jointly and severally
pay to Agent, for the ratable benefit of the Lenders (in addition to the then
outstanding principal, accrued interest and other charges then due and owing
under the terms of this Agreement and any of the other Loan Documents and any
amounts then due and owing pursuant to subsection 3.2.5), as liquidated damages
for the loss of the bargain and not as a penalty, an amount equal to (i) 1% of
the sum of the aggregate amount of the Revolving Loan Commitments then being
reduced or terminated and the outstanding amount of the Term Loan then being
prepaid, if such termination, prepayment or reduction occurs during the first 12
month period of the Term (October 8, 2003 through October 7, 2004) and (ii)
0.50% of the sum of the
8
aggregate amount of the Revolving Loan Commitments then being reduced or
terminated and the outstanding amount of the Term Loan then being prepaid, if
such termination, prepayment or reduction occurs during the second 12 month
period or the third 12 month period of the Term (October 8, 2004 through October
7, 2006). Notwithstanding the foregoing, no such prepayment fee resulting from a
prepayment of the Term Loan pursuant to subsection 3.3.5 shall be payable unless
the aggregate Revolving Loan Commitments are being simultaneously, or have
previously been, reduced by any amount pursuant to subsection 3.3.6. In
addition, if such termination, prepayment or reduction occurs on or after
October 8, 2006, no such prepayment fee shall be payable.
2.7 Audit Fees.
Borrowers shall jointly and severally pay to Agent audit fees
in accordance with Agent's current schedule of fees in effect from time to time
in connection with audits of the books and records and Properties of each
Borrower and its Subsidiaries and such other matters as Agent shall deem
appropriate in its reasonable credit judgment, plus all reasonable out-of-pocket
expenses incurred by Agent in connection with such audits; provided, that so
long as no Event of Default has occurred and is continuing, Borrowers shall not
be liable for such audit fees incurred in connection with more than three
complete audits during any fiscal year, whether such audits are conducted by
employees of Agent or by third parties hired by Agent. Such audit fees and
out-of-pocket expenses shall be payable on the first day of the month following
the date of issuance by Agent of a request for payment thereof to Neenah. Agent
may, in its discretion, provide for the payment of such amounts by making
appropriate Revolving Credit Loans to one or more Borrowers and charging the
appropriate Loan Account or Loan Accounts therefor.
2.8 Reimbursement of Expenses.
If, at any time or times regardless of whether or not an Event
of Default then exists, (i) Agent or Arranger incurs reasonable and documented
legal or accounting expenses or any other costs or out-of-pocket expenses in
connection with (1) the negotiation and preparation of this Agreement or any of
the other Loan Documents, any amendment of or modification of this Agreement or
any of the other Loan Documents, or any syndication or attempted syndication of
the Obligations (including, without limitation, printing and distribution of
materials to prospective Lenders and all costs associated with bank meetings,
but excluding any closing fees paid to Lenders in connection therewith) or (2)
the administration of this Agreement or any of the other Loan Documents and the
transactions contemplated hereby and thereby; or (ii) Agent or any Lender incurs
reasonable and documented legal or accounting expenses or any other costs or
out-of-pocket expenses in connection with (I) any litigation, contest, dispute,
suit, proceeding or action (whether instituted by Agent, any Lender, any
Borrower or any other Person) relating to the Collateral, this Agreement or any
of the other Loan Documents or any Borrower's, any of its Subsidiaries' or any
Guarantor's affairs; (2) any amendment, modification, waiver or consent with
respect to the Loan Documents that is requested of Lenders at a time when an
Event of Default is in existence (provided, that Borrowers shall only be
responsible under this clause (2) for the reasonable and documented fees of one
law firm, acting on behalf of all Lenders other than Fleet), (3) any attempt to
enforce any rights of Agent or any Lender against any Borrower or any other
Person which may be obligated to Agent or any Lender by virtue of this Agreement
or any of the other Loan Documents, including, without limitation, the Account
Debtors; or (4) any
9
attempt to inspect, verify, protect, preserve, restore, collect, sell, liquidate
or otherwise dispose of or realize upon the Collateral; then all such legal and
accounting expenses, other costs and out of pocket expenses of Agent or any
Lender, as applicable, shall be charged to Borrowers on a joint and several
basis; provided, that Borrowers shall not be responsible for such expenses,
costs and out-of-pocket expenses to the extent incurred because of the gross
negligence, bad faith or willful misconduct (as determined by a court of
competent jurisdiction in a final nonappealable judgment) of Agent or any Lender
seeking reimbursement. All amounts chargeable to Borrowers under this Section
2.8 shall be Obligations secured by all of the Collateral, shall be payable
within 15 days following demand to Agent or such Lender, as the case may be, and
shall bear interest from the date due and owing until paid in full at the rate
applicable to Base Rate Revolving Portions from time to time. Borrowers shall
also jointly and severally reimburse Agent for expenses incurred by Agent in its
administration of the Collateral to the extent and in the manner provided in
Sections 2.9 and 2.10 hereof
2.9 Bank Charges.
Borrowers shall jointly and severally pay to Agent and each
applicable Lender, on demand, any and all fees, costs or expenses which Agent or
any such Lender pays to a bank or other similar institution arising out of or in
connection with (i) the forwarding to any Borrower or any other Person on behalf
of any Borrower, by Agent or any Lender, of proceeds of Loans made to any
Borrower pursuant to this Agreement and (ii) the depositing for collection by
Agent or any Lender of any check or item of payment received or delivered to
Agent or any Lender on account of the Obligations.
2.10 Collateral Protection Expenses; Appraisals.
All out-of-pocket expenses incurred in protecting, storing,
warehousing, insuring, handling, maintaining and shipping the Collateral, and
any and all excise, property, sales, and use taxes imposed by any state,
federal, or local authority on any of the Collateral or in respect of the sale
thereof shall be jointly and severally borne and paid by Borrowers. If Borrowers
fail to promptly pay any portion thereof when due, Agent may, at its option, but
shall not be required to, pay the same and charge one or more Borrowers
therefor. On an annual basis, Agent shall, at Borrowers' joint and several
expense, obtain an appraisal of the Inventory of Borrowers from a third party
appraiser reasonably acceptable to Agent, which appraisal shall include an
assessment of the net orderly liquidation percentage of each category or type of
Eligible Inventory. Further, if average Availability (as determined by Agent in
its reasonable credit judgment) for any thirty (30) day period during a fiscal
year is less than $10,000,000, Agent may, and, at the request of Majority
Lenders, shall obtain updated appraisals of the Equipment and real Property of
Borrowers for such fiscal year at Borrowers' joint and several expense, which
updated appraisals shall provide an assessment of the fair market value and the
net orderly liquidation value of such Equipment and real Property; provided,
that Borrowers shall only be obligated to pay for one such updated appraisal of
such Equipment and real Property per year pursuant to this sentence.
Additionally, from time to time, if obtaining appraisals is necessary in order
for Agent or any Lender to comply with applicable laws or regulations, and at
any time if an Event of Default shall have occurred and be continuing, Agent
may, at Borrowers' joint and several expense, obtain appraisals from appraisers
(who may be personnel of Agent), stating the then current fair market value
and/or net orderly liquidation value of all or any portion of the real Property
or
10
personal Property of any Borrower or any of its Subsidiaries, including without
limitation the Inventory of any Borrower or any of its Subsidiaries.
2.11 Payment of Charges.
All amounts chargeable to any Borrower under this Agreement
shall be Obligations secured by all of the Collateral, shall be, unless
specifically otherwise provided, payable on demand and shall bear interest from
the date demand was made or such amount is due, as applicable, until paid in
full at the rate applicable to Base Rate Revolving Portions from time to time.
2.12 No Deductions.
2.12.1 Any and all payments or reimbursements made hereunder
shall be made free and clear of and without deduction for any and all
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto; excluding, however, the following:
taxes imposed on the income of Agent or any Lender or franchise taxes
by the jurisdiction under the laws of which Agent or any Lender is
organized or doing business or any political subdivision thereof and
taxes imposed on its income by the jurisdiction of Agent's or such
Lender's applicable lending office or any political subdivision thereof
or franchise taxes (all such taxes, levies, imposts, deductions,
charges or withholdings and all liabilities with respect thereto but
excluding such taxes imposed on net income, "Tax Liabilities"). If any
Borrower shall be required by law to deduct any such Tax Liabilities
from or in respect of any sum payable hereunder to Agent or any Lender,
then the sum payable hereunder by Borrowers shall be increased as may
be necessary so that, after all required deductions are made, Agent or
such Lender receives an amount equal to the sum it would have received
had no such deductions been made.
2.12.2 Each Lender that is organized in a jurisdiction outside
the United States hereby agrees that it shall, no later than the
Closing Date or, if later, the date on which such Lender became a party
hereto (and from time to time thereafter, upon reasonable request of
Borrowers or Agent), (i) furnish to Borrowers and Agent two accurate,
complete and signed copies of either United States Internal Revenue
Service Form W-8BEN or United States Internal Revenue Service Form
W-8ECI (on which such Lender claims entitlement to complete exemption
from United States federal withholding tax on all interest payments
hereunder) and (ii) to the extent that such Lender is legally able to
do so, provide Borrowers and Agent a new Form W-8BEN or Form W -8ECI
upon the obsolescence of any previously delivered form, duly executed
and completed by such Lender, and comply with all applicable United
States laws and regulations as in effect from time to time with regard
to such withholding tax exemption. Notwithstanding anything to the
contrary in this Section 2.12, for the avoidance of doubt, (A)
Borrowers shall be entitled, to the extent they are required to do so
by law, to deduct or withhold Taxes imposed by the United States (or
any political subdivision or taxing authority thereof or therein) from
any amounts payable hereunder to any Lender that is not a United States
person (as defined in Section 770l(a)(30) of the Internal Revenue Code
of 1986, as amended) to the extent the Lender has not provided to
Borrowers the United States Internal Revenue Service forms described
above, and (B) after the date a Lender
11
becomes a party hereto, Borrowers shall have no obligation to make
additional payments under this Section 2.12 to any Lender organized
outside the United States if the Lender has not provided such forms to
the Borrower.
2.13 Joint and Several Obligations.
Each Borrower acknowledges that it is jointly and severally
liable for all of the Obligations and as a result hereby unconditionally
guaranties the full and prompt payment when due, whether at maturity or earlier
by reason of acceleration or otherwise, and at all times thereafter, of all
indebtedness, liabilities and obligations of every kind and nature of each other
Borrower to Agent and Lenders and, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, joint or several, now or
hereafter existing, or due or to become due, and howsoever owned, held or
acquired by Agent or any Lender. Each Borrower agrees that if this guaranty, or
any Liens securing this guaranty, would, but for the application of this
sentence, be unenforceable under applicable law, this guaranty and each such
Lien shall be valid and enforceable to the maximum extent that would not cause
this guaranty or such Lien to be unenforceable under applicable law, and this
guaranty shall automatically be deemed to have been amended accordingly at all
relevant times.
Each Borrower hereby agrees that its obligations under this
guaranty shall be unconditional, irrespective of (a) the validity or
enforceability of the Obligations or any part thereof, or of any promissory note
or other document evidencing all or any part of the Obligations, (b) the absence
of any attempt to collect the Obligations from any other Borrower or any
Guarantor or other action to enforce the same, ( c) the waiver or consent by
Agent or any Lender with respect to any provision of any agreement, instrument
or document evidencing or securing all or any part of the Obligations, or any
other agreement, instrument or document now or hereafter executed by any other
Borrower and delivered to Agent or any Lender (other than a waiver, forgiveness
or consent by Agent and Lenders that reduces the amount of any of the
Obligations), (d) the failure by Agent or any Lender to take any steps to
perfect and maintain its security interest in, or to preserve its rights to, any
security or Collateral for the Obligations, for its benefit, (e) Agent's or any
Lender's election, in any proceeding instituted under the United States
Bankruptcy Code or any other similar bankruptcy or insolvency legislation, of
the application of Section 1111 (b )(2) of the United States Bankruptcy Code or
any other similar bankruptcy or insolvency legislation, (f) any borrowing or
grant of a security interest by any Borrower as debtor-in-possession, under
Section 364 of the United States Bankruptcy Code or any other similar bankruptcy
or insolvency legislation, (g) the disallowance, under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Bankruptcy Code or any other similar bankruptcy or insolvency
legislation, of all or any portion of Agent's or any Lender's claim(s) for
repayment of the Obligations or (h) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a borrower or a
guarantor.
Each Borrower hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of receivership or
bankruptcy of any Borrower, protest or notice with respect to the Obligations
and all demands whatsoever, and covenants that this guaranty will not be
discharged, except by complete and irrevocable payment and performance of the
Obligations. No notice to any Borrower or any other party shall be required for
Agent or any Lender to make demand hereunder. Such demand shall constitute a
mature and liquidated
12
claim against the applicable Borrower. Upon the occurrence of any Event of
Default, Agent or any Lender may, in its sole election, proceed directly and at
once, without notice, against all or any Borrower to collect and recover the
full amount or any portion of the Obligations, without first proceeding against
any other Borrower or any other Person, or any security or collateral for the
Obligations. During the existence of an Event of Default, Agent and each Lender
shall have the exclusive right to determine the application of payments and
credits, if any from any Borrower, any other Person or any security or
collateral for the Obligations, on account of the Obligations or of any other
liability of any Borrower to Agent or any Lender.
Each Borrower expressly waives all rights it may have now or
in the future under any statute, or at common law, or at law or in equity, or
otherwise, to compel Agent or Lenders to marshal assets or to proceed in respect
of the Obligations guaranteed hereunder against any other Borrower or any
Guarantor, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Borrower. It is agreed among each Borrower, Agent and
Lenders that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Loan Documents and that, but for
the provisions of this Section 2.13 and such waivers, Agent and Lenders would
decline to enter into this Agreement.
Notwithstanding anything to the contrary set forth in this
Section 2.13, it is the intent of the parties hereto that the liability incurred
by each Borrower in respect of the Obligations of the other Borrowers (and any
Lien granted by each Borrower to secure such Obligations), not constitute a
fraudulent conveyance under Section 548 of the United States Bankruptcy Code or
a fraudulent conveyance or fraudulent transfer under the provisions of any
applicable law of any state or other governmental unit ("Fraudulent
Conveyance"). Consequently, each Borrower, Agent and each Lender hereby agree
that if a court of competent jurisdiction determines that the incurrence of
liability by any Borrower in respect of the Obligations of any other Borrower
(or any Liens granted by such Borrower to secure such Obligations) would, but
for the application of this sentence, constitute a Fraudulent Conveyance, such
liability (and such Liens) shall be valid and enforceable only to the maximum
extent that would not cause the same to constitute a Fraudulent Conveyance, and
this Agreement and the other Loan Documents shall automatically be deemed to
have been amended accordingly.
SECTION 3. LOAN ADMINISTRATION.
3.1 Manner of Borrowing Revolving Credit Loans/LIBOR Option.
Borrowings under the credit facility established pursuant to
Section 1 hereof shall be as follows:
3.1.1 Loan Requests.
A request for a Revolving Credit Loan shall be made, or shall
be deemed to be made, in the following manner: (a) subject to the terms
of Section 1.4, a Borrower may give Agent notice of its intention to
borrow, in which notice such Borrower shall specify the amount of the
proposed borrowing of a Revolving Credit Loan and the proposed
borrowing date, which shall be a Business Day, no later than 11:00 a.m.
(Chicago, Illinois time) on the proposed borrowing date (or in
accordance with subsection 3.1.7, 3.1.8 or 3.1.9, as applicable, in the
case of a request for a LIBOR
13
Revolving Portion); and (b) the becoming due and payable of any amount
required to be paid under this Agreement, or the Notes, whether as
interest or for any other Obligation, shall be deemed irrevocably to be
a request by a Borrower for a Revolving Credit Loan on the due date in
the amount required to pay such interest or other Obligation in
accordance with subsection 3.1.4.
3.1.2 Disbursement.
Each Borrower hereby irrevocably authorizes Agent to disburse
the proceeds of each Loan requested, or deemed to be requested,
pursuant to subsection 3.1.1 as follows: (i) the proceeds of each
Revolving Credit Loan requested under subsection 3.1.1(a) shall be
disbursed by Agent in lawful money of the United States of America in
immediately available funds, in the case of the initial borrowing, in
accordance with the terms of the written disbursement letter from
Borrowers, and in the case of each subsequent borrowing, by wire
transfer to such bank account as may be agreed upon by Borrowers and
Agent from time to time (it being agreed and understood that such bank
account may be any operating account of Borrowers, with no requirement
that such amount that is disbursed to an operating account be deposited
in a Dominion Account) or elsewhere if pursuant to a written direction
from a Borrower and (ii) the proceeds of each Revolving Credit Loan
deemed requested under subsection 3.1.1 (b) shall be disbursed by Agent
by way of direct payment of the relevant interest or other Obligation.
If at any time any Loan is funded by Agent or Lenders in excess of the
amount requested or deemed requested by a Borrower, such Borrower
agrees to repay the excess to Agent immediately upon the earlier to
occur of (a) such Borrower's discovery of the error and (b) notice
thereof to such Borrower from Agent or any Lender.
3.1.3 Payment by Lenders.
Promptly, and in no event later than 12:00 p.m. (Chicago time)
on a proposed borrowing date, Agent shall give to each Lender written
notice by facsimile, telex or cable of the receipt by Agent from a
Borrower of any request for a Revolving Credit Loan. Each such notice
shall specify the requested date and amount of such Revolving Credit
Loan, whether such Revolving Credit Loan shall be subject to the LIBOR
Option, and the amount of each Lender's advance thereunder (in
accordance with its applicable Revolving Loan Percentage). Each Lender
shall, not later than 2:00 p.m. (Chicago time) on such requested date,
wire to a bank designated by Agent the amount of that Lender's
Revolving Loan Percentage of the requested Revolving Credit Loan. The
failure of any Lender to make the Revolving Credit Loans to be made by
it shall not release any other Lender of its obligations hereunder to
make its Revolving Credit Loan. Neither Agent nor any other Lender
shall be responsible for the failure of any other Lender to make the
Revolving Credit Loan to be made by such other Lender. The foregoing
notwithstanding, Agent, in its sole discretion, may from its own funds
make a Revolving Credit Loan on behalf of any Lender. In such event,
the Lender on behalf of whom Agent made the Revolving Credit Loan shall
reimburse Agent for the amount of such Revolving Credit Loan made on
its behalf, on a weekly (or more frequent, as determined by Agent in
its sole discretion) basis. In addition, Agent shall notify Lenders on
a weekly (or more frequent, as determined by Agent in its sole
discretion) basis regarding settlement of the Swingline Loans, and
promptly following such notice, each Lender shall reimburse Agent (in
accordance with its applicable Revolving Loan Percentage) for the
amount of the Swingline Loans outstanding. Notwithstanding the
foregoing or any other provision of this Agreement to the contrary,
14
subject to the terms of subsection 1.1.2 and subsection 1.1.5 no Lender
shall be required to reimburse Agent for any Revolving Credit Loans or
Swingline Loans that are made on behalf of such Lender after such
Lender has delivered a written notice of the type provided for under
subsection 10.2.2 for so long as such written notice remains in effect.
On each such settlement date, Agent will pay to each Lender the net
amount owing to such Lender in connection with such settlement,
including without limitation amounts relating to Loans, fees, interest
and other amounts payable hereunder. The entire amount of interest
attributable to such Revolving Credit Loan for the period from the date
on which such Revolving Credit Loan was made by Agent on such Lender's
behalf until Agent is reimbursed by such Lender, shall be paid to Agent
for its own account.
3.1.4 Authorization. Each Borrower hereby irrevocably
authorizes Agent, in Agent's sole discretion, to advance to Neenah or
another Borrower, and to charge to the appropriate Borrower's Loan
Account hereunder as a Revolving Credit Loan (which shall be a Base
Rate Portion), a sum sufficient to pay all interest accrued on the
Obligations during the immediately preceding month, to pay all
regularly scheduled payments of principal and mandatory prepayments of
principal due and payable at any time and to pay all fees, costs and
expenses and other Obligations due and payable at any time by Borrowers
to Agent or any Lender hereunder.
3.1.5 Letter of Credit and LC Guaranty Requests. A request for
a Letter of Credit or LC Guaranty shall be made in the following
manner: a Borrower shall give Agent and Bank (or, if the same is to be
issued by a Letter of Credit Issuer, Agent and such Letter of Credit
Issuer) a written notice of its request for the issuance of a Letter of
Credit or LC Guaranty, not later than 11:00 a.m. (Chicago, Illinois
time), at least one Business Day before the proposed issuance date
thereof, in which notice such Borrower shall specify the proposed
issuer, issuance date and format and wording for the Letter of Credit
or LC Guaranty being requested (which shall be satisfactory to Agent
and the Person being asked to issue such Letter of Credit or LC
Guaranty). Such request shall be accompanied by an executed application
and reimbursement agreement in form and substance satisfactory to Agent
and the Person being asked to issue the Letter of Credit or LC
Guaranty, as well as any required corporate resolutions or other
documents reasonably requested by Agent or the Person being asked to
issue the Letter of Credit or LC Guaranty. In the event of any
inconsistency or conflict between any such application and
reimbursement agreement between a Borrower and the Person issuing a
Letter of Credit or LC Guaranty, and this Agreement, the terms and
provisions of this Agreement shall govern and control.
3.1.6 Method of Making Requests. As an accommodation to
Borrowers, unless a Default or an Event of Default is then in
existence, (i) Agent shall permit telephonic or electronic requests for
Revolving Credit Loans to Agent, (ii) Agent and Bank, or a Letter of
Credit Issuer, as applicable, may, in their discretion, permit
electronic transmittal of requests for Letters of Credit and LC
Guaranties to them, and (iii) Agent may, in Agent's discretion, permit
electronic transmittal of instructions, authorizations, agreements or
reports to Agent. Unless a Borrower specifically directs Agent, Bank or
a Letter of Credit Issuer, as applicable in writing not to accept or
act upon telephonic or electronic communications from such Borrower
(which direction shall only be applicable to the
15
Persons who have received the same in writing), neither Agent, Bank,
any Letter of Credit Issuer, nor any Lender shall have any liability to
any Borrower for any loss or damage suffered by any Borrower as a
result of Agent's, Bank's or a Letter of Credit Issuer's honoring of
any requests, execution of any instructions, authorizations or
agreements or reliance on any reports communicated to it telephonically
or electronically and purporting to have been sent to Agent, Bank or a
Letter of Credit Issuer by any Borrower (except for any such loss or
damage resulting From Agent's, Bank's or any Letter of Credit Issuer's
gross negligence or willful misconduct), and neither Agent, Bank nor
any Letter of Credit Issuer shall have any duty to verify the origin of
any such communication or the authority of the Person sending it. Each
telephonic request for a Letter of Credit or LC Guaranty accepted by
Agent, Bank or a Letter of Credit Issuer, as applicable, hereunder
shall be promptly followed by a written confirmation of such request
from the applicable Borrower to Agent and Bank or such Letter of Credit
Issuer, if applicable.
3.1.7 LIBOR Portions. In the event a Borrower desires to
obtain a LIBOR Portion, such Borrower shall give Agent a LIBOR Request
no later than 11:00 a.m. (Chicago, Illinois time) on the third Business
Day prior to the requested borrowing date; provided, that neither Agent
nor any Lender shall be obligated to honor such request if a Default or
Event of Default exists as of the date of the LIBOR Request or as of
the first day of the Interest Period for the requested LIBOR Portion.
Each LIBOR Request shall be irrevocable and binding on Borrowers. In no
event shall Borrowers be permitted to have outstanding at anyone time
LIBOR Portions with more than seven (7) different Interest Periods.
3.1.8 Conversion of Base Rate Portions. Provided that as of
both the date of the LIBOR Request and the first day of the Interest
Period, no Default or Event of Default exists, a Borrower may, on any
Business Day, convert any Base Rate Portion of such Borrower into a
LIBOR Portion. If a Borrower desires to convert a Base Rate Portion,
such Borrower shall give Agent a LIBOR Request no later then 11 :00
a.m. (Chicago, Illinois time) on the third Business Day prior to the
requested conversion date. After giving effect to any conversion of
Base Rate Portions to LIBOR Portions, Borrowers shall not be permitted
to have outstanding at anyone time LIBOR Portions with more than seven
(7) different Interest Periods.
3.1.9 Continuation of LIBOR Portions. Provided that as of both
the date of the LIBOR Request and the first day of the Interest Period,
no Default or Event of Default exists, a Borrower may, on any Business
Day, continue any LIBOR Portions of such Borrower into a subsequent
Interest Period of the same or a different permitted duration. If a
Borrower desires to continue a LIBOR Portion, such Borrower shall give
Agent a LIBOR Request no later than 11:00 a.m. (Chicago, Illinois time)
on the second Business Day prior to the requested continuation date.
After giving effect to any continuation of LIBOR Portions, Borrowers
shall not be permitted to have outstanding at anyone time LIBOR
Portions with more than seven (7) different Interest Periods. If a
Borrower shall fail to give timely notice of its election to continue
any LIBOR Portion or portion thereof as provided above, or if such
continuation shall not be permitted, such LIBOR Portion or portion
thereof, unless such LIBOR Portion shall be repaid, shall automatically
be
16
converted into a Base Rate Portion at the end of the Interest Period
then in effect with respect to such LIBOR Portion.
3.1.10 Inability to Make LIBOR Portions.
Notwithstanding any other provision hereof, if any applicable
law, treaty, regulation or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for any
Lender (for purposes of this subsection 3.1.10, the term "Lender" shall
include the office or branch where such Lender or any corporation or
bank then controlling such Lender makes or maintains any LIBOR
Portions) to make or maintain its LIBOR Portions, or if with respect to
any Interest Period, Agent is unable to determine the LIBOR relating
thereto, or adverse or unusual conditions in, or changes in applicable
law relating to, the London interbank market make it, in the reasonable
judgment of Agent, impracticable to fund therein any of the LIBOR
Portions, or make the projected LIBOR unreflective of the actual costs
of funds therefor to any Lender, the obligation of Agent and Lenders to
make or continue LIBOR Portions or convert Base Rate Portions to LIBOR
Portions hereunder shall forthwith be suspended during the pendency of
such circumstances and the applicable Borrower shall, if any affected
LIBOR Portions are then outstanding, promptly upon request from Agent,
convert such affected LIBOR Portions into Base Rate Portions.
3.2 Payments.
Except where evidenced by notes or other instruments issued or
made by one or more Borrowers to any Lender and accepted by such Lender
specifically containing payment instructions that are in conflict with this
Section 3.2 (in which case the conflicting provisions of said notes or other
instruments shall govern and control), the Obligations shall be payable as
follows:
3.2.1 Principal.
(i) Revolving Credit Loans. Principal on account
of Revolving Credit Loans shall be payable by Borrowers to
Agent for the ratable benefit of Lenders immediately upon the
earliest of (i) at any time when a Dominion Period is in
effect, the receipt by Agent or any Borrower of any proceeds
of any of the Collateral (except as otherwise provided
herein), including without limitation as required pursuant to
subsections 3.3.1 and 6.2.4, to the extent of said proceeds,
subject to Borrowers' rights to reborrow such amounts in
compliance with subsection 1.1.1 hereof, (ii) the acceleration
of the Revolving Credit Loans in accordance with the terms of
Section 10.2, (iii) subject to the provisions of subsection
1.1.2 and the proviso to this subsection 3.2.1, at all times
that the calculations set forth in subsection 1.1.1 reflect a
negative amount, to the extent of such amount on demand by
Agent or Majority Lenders therefor, or (iv) termination of
this Agreement pursuant to Section 4 hereof; provided,
however, that, if an Overadvance shall exist at any time,
Borrowers shall, on demand therefor (or, in the case of an
Overadvance caused by, and created at the time of, Agent's
establishment of a new reserve or a new eligibility criterion,
within 5 days of demand therefor), jointly and severally repay
the Overadvance. Each payment (including principal prepayment)
by a Borrower on account of principal of the
17
Revolving Credit Loans shall be applied first to Base Rate
Revolving Portions and then to LIBOR Revolving Portions.
(ii) Term Loan. Principal on account of the Term
Loan shall be payable jointly and severally by Borrowers as
follows: (i) as required pursuant to subsections 3.3.1, 3.3.2
and 3.3.3, (ii) in 20 consecutive quarterly installments on
each January 1, April 1, July I and October 1 commencing on
January 1, 2004, each in the amount of $788,750, and (iii) a
final installment in the amount of the remaining principal
balance of the Term Loan on October 8, 2008. Notwithstanding
the foregoing, the entire unpaid principal balance of the Term
Loan shall be due and payable upon the termination of this
Agreement.
3.2.2 Interest.
(i) Base Rate Portion. Interest accrued on Base
Rate Portions shall be due and payable on the earliest of (1)
the first calendar day of each month (for the immediately
preceding month), computed through the last calendar day of
the preceding month, (2) the acceleration of such Base Rate
Portion in accordance with the terms of Section 10.2 or (3)
termination of this Agreement pursuant to Section 4 hereof.
(ii) LIBOR Portion. Interest accrued on each
LIBOR Portion shall be due and payable on each LIBOR Interest
Payment Date and on the earlier of (I) the acceleration of
such LIBOR Portion in accordance with the terms of Section
10.2 or (2) termination of this Agreement pursuant to Section
4 hereof
3.2.3 Costs, Fees and Charges. Costs, fees and charges payable
pursuant to this Agreement shall be jointly and severally payable by
Borrowers to Agent, as and when provided in Section 2 or Section 3
hereof, as applicable to Agent or a Lender, as applicable, or to any
other Person designated by Agent or such Lender in writing.
3.2.4 Other Obligations. The balance of the Obligations (other
than unasserted contingent indemnity obligations) requiring the payment
of money, if any, shall be jointly and severally payable by Borrowers
to Agent for distribution to Lenders, as appropriate, as and when
provided in this Agreement, the Other Agreements or the Security
Documents, or on demand, whichever is later.
3.2.5 Prepayment of/Failure to Borrow LIBOR Portions.
Borrowers may prepay a LIBOR Portion only upon at least three (3)
Business Days prior written notice to Agent (which notice shall be
irrevocable). Subject to the terms of subsection 3.3.4, in the event of
(i) the payment of any principal of any LIBOR Portion other than on the
last day of the Interest Period applicable thereto (including as a
result of an Event of Default), (ii) the conversion of any LIBOR
Portion other than on the last day of the Interest Period applicable
thereto, or (iii) the failure to borrow, convert, continue or prepay
any LIBOR Portion on the date specified in any notice delivered
pursuant hereto, then, in any such event, Borrowers shall compensate
each Lender for the actual loss, cost and expense
18
incurred by such Lender that is attributable to such event, together
with any normal, reasonable and customary administrative charges
applicable thereto.
3.3 Mandatory and Optional Prepayments.
3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation of
Collateral.
Except for dispositions of assets permitted by subsection
8.2.9(ii) and dispositions in accordance with this Agreement of assets
that are subject to a Lien permitted by subsection 8.2.5(iv) (in each
case, the proceeds of which shall, at any time when a Dominion Period
is in effect, be applied to reduce the outstanding principal balance of
the Revolving Credit Loans, but shall not permanently reduce the
Revolving Loan Commitments), if any Borrower or any of its Subsidiaries
sells any of the Collateral or if any of the Collateral is lost,
damaged or destroyed or taken by condemnation (in each case excluding,
at any time when a Dominion Period is not in effect, Accounts,
Inventory, the Non-Core Fixed Assets described in clauses (iii) through
(v) of the definition thereof and Non-Core Fixed Assets consisting of
the equity of ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ - Ashland), the applicable Borrower
shall, unless otherwise agreed by Majority Lenders, pay to Agent for
the ratable benefit of Lenders as and when received by such Borrower or
such Subsidiary and as a mandatory prepayment of the Loans, as herein
provided, a sum equal to the proceeds (including insurance payments but
net of costs and taxes incurred in connection with such sale or event)
received by such Borrower or such Subsidiary from such sale, loss,
damage, destruction or condemnation.
To the extent that such Collateral sold, lost, damaged,
destroyed or condemned consists of Equipment, real Property, or other
Property other than Accounts, Inventory, the Non-Core Fixed Assets
described in clauses (iii) through (v) of the definition thereof and
Non-Core Fixed Assets consisting of the equity of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ -
Ashland, the applicable prepayment shall be applied first, to Agent's
costs and expenses relating to the relevant transaction, second, to the
installments of principal due under the Term Notes ratably, to be
applied to future installment payments on a ratable basis (exclusive of
the final installment payment that is due on October 8, 2008) until
such future installment payments are paid in full, third, to the final
installment of principal due under the Term Notes on October 8, 2008
ratably until paid in full, and fourth, to repay outstanding principal
of Revolving Credit Loans, but not as a permanent reduction of the
Revolving Loan Commitments.
To the extent that the Collateral sold, lost, damaged,
destroyed or condemned consists of Accounts, Inventory, the Non-Core
Fixed Assets described in clauses (iii) through (v) of the definition
thereof or Non-Core Fixed Assets consisting of the equity of ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇ - Ashland and a Dominion Period is in effect, subject to the
third sentence of subsection 3.4.1 the applicable prepayment shall be
applied to reduce the outstanding principal balance of the Revolving
Credit Loans, but shall not permanently reduce the Revolving Loan
Commitments (it being understood that prepayments required to be made
pursuant to subsection 3.3.3 shall also be applied as set forth in this
sentence). In addition, if the Collateral subject to such sale, loss,
damage, destruction or condemnation consists of Eligible Accounts or
Eligible Inventory and a Dominion Period
19
is in effect, such prepayment shall be specifically applied against the
portion of the Borrowing Base predicated on such Collateral.
Notwithstanding the foregoing, if any Borrower or a Subsidiary
of a Borrower receives any cash proceeds of insurance (net of costs and
taxes incurred) with respect to any loss or destruction of Equipment or
real Property, together with the aggregate amount of any other such
proceeds during the then current fiscal year of Borrowers, (i) are less
than $2,000,000, unless an Event of Default is then in existence, Agent
shall remit such proceeds to the applicable Borrower (or its applicable
Subsidiary) for use in replacing or repairing the applicable Property,
so long as the applicable Borrower (or its applicable Subsidiary) has
committed to acquire replacement Property within 180 days of such loss,
damage or destruction and has actually acquired replacement Property
within 360 days of such loss, damage or destruction, free and clear of
Liens other than Permitted Liens that are not Purchase Money Liens (it
being agreed and understood that if the applicable Borrower (or its
applicable Subsidiary) fails to commit to replace or rebuild the
damaged Property within such 180 day period or fails to actually
replace or rebuild such damaged Property within such 360 day period,
Borrowers shall prepay the Obligations in the manner specified in the
second sentence of this subsection 3.3.1), (ii) are greater than or
equal to $2,000,000 and less than $5,000,000, unless an Event of
Default is then in existence, subject to the third sentence of
subsection 3.4.1 such amounts shall be provisionally applied to reduce
the outstanding principal balance of the Revolving Credit Loans and a
Rebuild Reserve shall be created in the amount of such proceeds, until
the earliest of (I) Borrowers' decision not to repair or replace the
damaged Property, (2) the expiration of one hundred eighty days (180)
days from the receipt of such amount, if the applicable Borrower or
Subsidiary has not yet committed to acquire replacement Collateral or
(3) the expiration of three hundred sixty (360) days from the receipt
of such amount (with such amount being applied to the Obligations in
the manner specified in the second sentence of this subsection 3.3.1
until payment thereof in full in the event that the foregoing period
ends pursuant to clause (1) or clause (2)), or (iii) are equal to or
greater than $5,000,000, and Borrowers have requested that Agent and
Majority Lenders agree to permit the applicable Borrower or Subsidiary
to repair or replace the damaged Property, subject to the third
sentence of subsection 3.4.1 such amounts shall be provisionally
applied to reduce the outstanding principal balance of the Revolving
Credit Loans and a Rebuild Reserve shall be created in the amount of
such proceeds, until the earliest of (1) Agent's and Majority Lenders'
decision with respect thereto, (2) the expiration of one hundred eighty
(180) days from the date of such request, unless the applicable
Borrower or Subsidiary has committed to replace or rebuild the damaged
Property, or (3) the expiration of three hundred sixty (360) days from
such request. If Borrowers decide and commit to repair or replace the
applicable Property as provided in clause (ii) above or if Agent and
Majority Lenders agree, in their reasonable judgment, to permit any
such repair or replacement under clause (iii) above, the applicable
amount shall, unless an Event of Default is in existence, be released
from the Rebuild Reserve (with the amount of the Rebuild Reserve being
reduced on a dollar-for-dollar basis for each dollar that is so
released) to the applicable Borrower or Subsidiary as needed for use in
replacing or repairing the damaged Property during such three hundred
sixty (360) day period, with any remaining amount at the end of such
three hundred sixty (360) day period applied to the Obligations in the
manner specified in the second sentence of this subsection 3.3.1
20
until payment thereof in full; and in the case of clause (iii) above,
if either Agent or Majority Lenders decline to permit any such repair
or replacement or fail to respond to Borrowers within such three
hundred sixty (360) day period, or if the applicable Borrower or
Subsidiary has failed to commit to replace or rebuild the damaged
Property within such one hundred eighty (180) day period, such amount
shall be released from the Rebuild Reserve and applied to the
Obligations in the manner specified in the second sentence of this
subsection 3.3.1 until payment thereof in full. It is acknowledged and
agreed that any of the one hundred eighty (180) day or three hundred
sixty (360) day periods set forth in this subsection 3.3.1 may be
extended with the approval of Majority Lenders.
Nothing in this subsection 3.3.1 shall be construed to
constitute Agent's or any Lender's consent to the consummation of any
disposition or other transaction that is not otherwise permitted by
another provision of this Agreement (including, without limitation,
subsection 8.2.9 hereof) or another Loan Document.
3.3.2 Proceeds from Issuance of Additional Indebtedness or
Equity.
If Ultimate Parent, Parent or any Borrower issues any
additional Indebtedness or issues any additional equity for cash (other
than equity (including stock options) issued to officers and employees
in connection with incentive plans, equity resulting in proceeds used
to make Capital Expenditures and equity resulting in proceeds used to
consummate a Permitted Acquisition, in each case to the extent that the
proceeds of such equity are promptly used as consideration for all or a
portion of the purchase price for such Capital Expenditure or Permitted
Acquisition) in a manner permitted under this Agreement, Borrowers
shall pay to Agent for the ratable benefit of Lenders, when and as
received by Ultimate Parent, Parent or any Borrower and as a mandatory
prepayment of the Obligations, a sum equal to 50% of the net proceeds
to Ultimate Parent, Parent or such Borrower of the issuance of such
Indebtedness or equity; provided, that the foregoing shall not apply in
connection with an issuance of Indebtedness or equity to a Person that
is a Related Person of a Borrower. Any such prepayment shall be applied
to the Loans in the manner specified in the second sentence of
subsection 3.3.1 until payment thereof in full.
3.3.3 Other Mandatory Prepayments.
At any time when a Dominion Period is in effect, if any
Borrower or any Subsidiary receives any cash proceeds from any tax
refunds actually received, indemnity payments or pension plan
reversions, Borrowers shall jointly and severally pay to Agent for the
benefit of Lenders, when and as received by such Borrower or such
Subsidiary, and as a mandatory prepayment of the Obligations, a sum
equal to 100% of such proceeds of such tax refund, indemnity payment or
pension plan reversions. Any such prepayment shall be applied to the
Obligations in the manner specified in the third sentence of subsection
3.3.1 until payment thereof in full.
3.3.4 LIBOR Portions.
If the application of any payment made in accordance with the
provisions of this Section 3.3 at a time when no Event of Default has
occurred and is continuing would result in termination of a LIBOR
Portion prior to the last day of the Interest Period for such LIBOR
Portion, the amount of such prepayment shall not be applied to such
LIBOR Portion, but will, at Borrowers' option, be held by Agent in a
non-
21
interest bearing account at a Lender or another bank satisfactory to
Agent in its discretion, which account is in the name of Agent and from
which account only Agent can make any withdrawal, in each case to be
applied as such amount would otherwise have been applied under this
Section 3.3 at the earlier to occur of (i) the last day of the relevant
Interest Period or (ii) the occurrence of a Default or an Event of
Default.
3.3.5 Optional Prepayments.
Borrowers may, at their option from time to time upon not less
than 3 days prior written notice to Agent, prepay installments of the
Term Notes, provided that the amount of any such prepayment is at least
$500,000 and in integral multiples of $100,000 above $500,000, and that
such prepayments are made ratably with respect to all Term Notes. Each
such prepayment shall be applied first, to the future installments of
principal due under the Term Notes on a ratable basis (exclusive of the
final installment of principal that is due on October 8, 2008) until
such future installments of principal are paid in full and second, to
the final installment of principal due under the Term Notes on October
8, 2008 until paid in full. Except for charges applicable to
prepayments of LIBOR Term Portions and except for charges payable under
Section 2.6, such prepayments shall be without premium or penalty.
3.3.6 Optional Reductions of Revolving Loan Commitments.
Borrowers may, at their option from time to time upon not less
than 3 Business Days' prior written notice to Agent, terminate in whole
or permanently reduce ratably in part, the unused portion of the
Revolving Loan Commitments, provided however, that (i) each such
partial reduction shall be in an amount of $2,000,000 or integral
multiples of $1,000,000 in excess thereof and (ii) unless the Agreement
is terminated pursuant to subsection 4.2.2, the aggregate of all
optional reductions to the Revolving Credit Commitments may not exceed
$10,000,000 during any 12 month period or $20,000,000 during the Term.
Except for charges under subsection 3.2.5 applicable to prepayments of
LIBOR Revolving Portions and except for charges payable under Section
2.6, such prepayments shall be without premium or penalty.
3.4 Application of Payments and Collections.
3.4.1 Collections.
All items of payment received by Agent in immediately
available funds by 12:00 noon, Chicago, Illinois, time, on any Business
Day shall be deemed received on that Business Day. All items of payment
received after 12:00 noon, Chicago, Illinois, time, on any Business Day
shall be deemed received on the following Business Day. If as the
result of collections of Accounts as authorized by subsection 6.2.4
hereof or otherwise (including, without limitation, as authorized under
subsection 3.3.3 and under subsection 6.1.2), a credit balance exists
in the Loan Account, such credit balance shall not accrue interest in
favor of Borrowers, but shall be disbursed to a Borrower or otherwise
at a Borrower's direction in the manner set forth in subsection 3.1.2,
upon a Borrower's request at any time, so long as no Event of Default
then exists (it being acknowledged and agreed that such Borrower may
direct the disbursement of such credit balance to an operating account,
with no requirement that such amount that is disbursed to such
operating account be deposited in a Dominion Account). Agent may at its
option, offset such credit balance against any of the Obligations upon
and during the continuance of an Event of Default.
22
3.4.2 Apportionment, Application and Reversal of Payments.
Principal and interest payments shall be apportioned ratably among
Lenders (according to the unpaid principal balance of the Loans to
which such payments relate held by each Lender). All payments shall be
remitted to Agent and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific
fees, and all proceeds of Accounts, or, except as provided in
subsection 3.3.1, other Collateral received by Agent, including without
limitation all amounts deposited in a Dominion Account, shall be
applied, ratably, subject to the provisions of this Agreement and
whether or not an Event of Default exists, first, to pay any fees,
indemnities, or expense reimbursements (other than amounts related to
Product Obligations) then due to Agent or Lenders from any Borrower;
second, to pay interest due from Borrowers in respect of all Loans,
including Swingline Loans and Agent Loans; third, to pay or prepay
principal of Swingline Loans and Agent Loans; fourth, to pay or prepay
principal of the Revolving Credit Loans (other than Swingline Loans and
Agent Loans) and unpaid reimbursement obligations in respect of Letters
of Credit; fifth, to pay an amount to Agent equal to all outstanding
Letter of Credit Obligations to be held as cash Collateral for such
Obligations (in an amount of 105% of the aggregate amount thereof);
sixth, to payor prepay principal of the Term Loan seventh, to the
payment of any other Obligation (other than amounts related to Product
Obligations) due to the Agent or any Lender by any Borrower; and
eighth, to pay any amounts owing in respect of Product Obligations. As
between Agent and Borrowers, after the occurrence and during the
continuance of an Event of Default, Agent shall have the continuing
exclusive right to apply and reapply any and all such payments and
collections received at any time or times hereafter by Agent or its
agent against the Obligations, in such manner as Agent may deem
advisable, notwithstanding any entry by Agent or any Lender upon any of
its books and records.
3.5 All Loans to Constitute One Obligation.
The Loans, Letters of Credit and LC Guarantees shall
constitute one general joint and several Obligation of Borrowers, and shall be
secured by Agent's Lien upon all of the Collateral.
3.6 Loan Account.
Agent shall enter all Loans as debits to one or more loan
accounts (each, a "Loan Account") and shall also record in the Loan Account all
payments made by or on behalf of each Borrower on any Obligations and all
proceeds of Collateral which are finally paid to Agent, and may record therein,
in accordance with customary accounting practice, other debits and credits,
including interest and all charges and expenses properly chargeable to each
Borrower.
3.7 Statements of Account.
Agent will account to Borrowers monthly with a statement of
Loans, charges and payments made pursuant to this Agreement during the
immediately preceding month, and such account rendered by Agent shall be deemed
final, binding and conclusive upon Borrowers absent demonstrable error unless
Agent is notified by Borrowers in writing to the contrary within 90
23
days of the date each accounting is received by Borrowers. Such notice shall
only be deemed an objection to those items specifically objected to therein.
3.8 Increased Costs.
If any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law, but if not having the force of law, being a guideline or directive with
which such Lender is accustomed to comply) adopted or implemented after the date
of this Agreement and having general applicability to all banks or finance
companies within the jurisdiction in which any Lender operates (excluding, for
the avoidance of doubt, the effect of and phasing in of capital requirements or
other regulations or guidelines passed prior to the date of this Agreement), or
any interpretation or application thereof by any governmental authority charged
with the interpretation or application thereof, or the compliance of such Lender
therewith, shall:
(i) (I) subject such Lender to any United States
taxes with respect to this Agreement (other than (a) any tax
based on or measured by net income or otherwise in the nature
of a net income tax, including, without limitation, any
franchise tax or any similar tax based on capital, net worth
or comparable basis for measurement and (b) any tax collected
by a withholding on payments and which neither is computed by
reference to the net income of the payee nor is in the nature
of an advance collection of a tax based on or measured by the
net income of the payee) or (2) change the basis of taxation
of payments to such Lender of principal, fees, interest or any
other amount payable hereunder or under any Loan Documents
(other than in respect of ( a) any tax based on or measured by
net income or otherwise in the nature of a net income tax,
including, without limitation, any franchise tax or any
similar tax based on capital, net worth or comparable basis
for measurement and (b) any tax collected by a withholding on
payments and which neither is computed by reference to the net
income of the payee nor is in the nature of an advance
collection of a tax based on or measured by the net income of
the payee; provided, that in either case the Lender shall have
complied with the requirements of Section 2.12.2 to the extent
applicable to such Lender);
(ii) impose, modify or hold applicable any
reserve (except any reserve taken into account in the
determination of the applicable LIBOR), special deposit,
assessment or similar requirement against assets held by, or
deposits in or for the account of, advances or loans by, or
other credit extended by, any office of such Lender, including
(without limitation) pursuant to Regulation D of the Board of
Governors of the Federal Reserve System; or
(iii) impose on such Lender or the London
interbank market any other condition with respect to any Loan
Document;
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining Loans hereunder or the result of any of the
foregoing is to reduce the rate of return on such Lender's capital as a
consequence of its obligations hereunder, or the result of any
24
of the foregoing is to reduce the amount of any payment (whether of principal,
interest or otherwise) in respect of any of the Loans, then, in any such case,
Borrowers shall jointly and severally pay such Lender, upon demand and
certification not later than sixty (60) days following its receipt of notice of
the imposition of such increased costs, such additional amount as will
compensate such Lender for such additional cost or such reduction, as the case
may be, to the extent such Lender has not otherwise been compensated, with
respect to a particular Loan, for such increased cost as a result of an increase
in the Base Rate or the LIBOR. An officer of the applicable Lender shall
reasonably determine the amount of such additional cost or reduced amount using
reasonable averaging and attribution methods and shall certify the amount of
such additional cost or reduced amount to Borrowers, which certification shall
include a written explanation of such additional cost or reduction to Borrowers.
Such certification shall be conclusive absent manifest error. If a Lender claims
any additional cost or reduced amount pursuant to this Section 3.8, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to designate a different lending office (and update the Register,
as applicable) or to file any certificate or document reasonably requested by
Borrowers, or take any other action requested by Borrowers that is not
inconsistent with such Lender's internal policies, if the making of such
designation or filing or the taking of such action would avoid the need for, or
reduce the amount of, any such additional cost or reduced amount and would not
in good faith, in the sole reasonable discretion of such Lender, be otherwise
disadvantageous to such Lender.
3.9 Basis for Determining Interest Rate Inadequate.
In the event that Agent or any Lender shall have determined
that:
(i) reasonable means do not exist for
ascertaining the LIBOR for any Interest Period; or
(ii) Dollar deposits in the relevant amount and
for the relevant maturity are not available in the London
interbank market with respect to a proposed LIBOR Portion, or
a proposed conversion of a Base Rate Portion into a LIBOR
Portion; then
Agent or such Lender shall give Borrowers prompt written, telephonic or
electronic notice of the determination of such effect. If such notice is given,
(i) any such requested LIBOR Portion shall be made as a Base Rate Portion,
unless Borrowers shall notify Agent no later than 10:00 a.m. (Chicago, Illinois
time) three (3) Business Days prior to the date of such proposed borrowing that
the request for such borrowing shall be canceled or made as an unaffected type
of LIBOR Portion, and (ii) any Base Rate Portion which was to have been
converted to an affected type of LIBOR Portion shall be continued as or
converted into a Base Rate Portion, or, if Borrowers shall notify Agent, no
later than 10:00 a.m. (Chicago, Illinois time) three (3) Business Days prior to
the proposed conversion, shall be maintained as an unaffected type of LIBOR
Portion.
3.10 Sharing of Payments, Etc.
If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Loan made by it in excess of
25
its ratable share of payments on account of Loans made by all Lenders, such
Lender shall forthwith purchase from each other Lender such participation in
such Loan as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each other Lender; provided, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lenders the purchase price to the extent of such
recovery, together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. Borrowers agree that any Lender so purchasing
a participation from another Lender pursuant to this Section 3.10 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-oft) with respect to such participation as fully as if such
Lender were the direct creditor of each Borrower in the amount of such
participation. Notwithstanding anything to the contrary contained herein, all
purchases and repayments to be made under this Section 3.10 shall be made
through Agent.
3.11 Optional Prepayment/Replacement of Lenders.
If (a) Borrowers are required to pay increased sums to a
particular Lender pursuant to the last sentence of subsection 2.12.1 or Section
3.8, (b) Borrowers are notified that a Lender will not make or maintain LIBOR
Portions pursuant to subsection 3.1.10 or Section 3.9, ( c) a particular Lender
refuses or fails to execute a waiver of any provision hereof or a consent to any
amendment hereto that has been requested by Borrowers and approved by Majority
Lenders or (d) a particular Lender has exercised its option to refuse to fund
additional Revolving Credit Loans during the existence of a Default or Event of
Default pursuant to subsection 10.2.2 at a time when Majority Lenders continue
funding Revolving Credit Loans notwithstanding the existence of such Default or
Event of Default (any such Lender, an "Affected Lender"), Borrowers may obtain,
at Borrowers' expense, a replacement Lender ("Replacement Lender") for such
Affected Lender, which Replacement Lender shall be reasonably satisfactory to
Agent. In the event Borrowers obtain a Replacement Lender that will refinance
all outstanding Obligations owed to such Affected Lender and assume its entire
Revolving Loan Commitment hereunder within one hundred twenty (120) days
following notice of Borrowers' intention to do so, the Affected Lender shall
sell and assign all of its rights and delegate all of its obligations under this
Agreement to such Replacement Lender in accordance with the provisions of
subsection 11.9.1, provided that Borrowers have reimbursed such Affected Lender
for (1) any fees owing by such Affected Lender under subsection 11.9.1 and (2)
the amount of fees and expenses as to which such Affected Lender is entitled to
reimbursement by Borrowers hereunder through the date of such sale and
assignment.
SECTION 4. TERM AND TERMINATION
4.1 Term of Agreement.
Subject to the right of Lenders to cease making Loans to
Borrowers during the continuance of any Default or Event of Default, this
Agreement shall be in effect for a period of 5 years from the date hereof,
through and including October 8, 2008 (the "Term"), unless terminated as
provided in Section 4.2 hereof.
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4.2 Termination.
4.2.1 Termination by Lenders.
Agent may, and at the direction of Majority Lenders shall,
terminate this Agreement upon notice during the continuance of an Event
of Default.
4.2.2 Termination by Borrowers.
Upon at least 10 days prior written notice to Agent and
Lenders, Borrowers may, at their option, terminate this Agreement;
provided, however, no such termination shall be effective until
Borrowers have paid or collateralized to Agent's reasonable
satisfaction all of the Obligations (other than unasserted contingent
indemnity obligations) in immediately available funds, all Letters of
Credit and LC Guaranties have expired, terminated or have been cash
collateralized (in an amount equal to 105% of the LC Amount) to Agent's
reasonable satisfaction and Borrowers have complied with subsection
3.2.5. Without limiting Borrowers' right to reduce the amount of the
Revolving Loan Commitments pursuant to subsection 3.3.6, Borrowers may
elect to terminate this Agreement in its entirety only. No section of
this Agreement or type of Loan available hereunder may be terminated
singly.
4.2.3 Effect of Termination.
All of the Obligations shall be immediately due and payable
upon the termination date stated in any notice of termination of this
Agreement. All undertakings, agreements, covenants, warranties and
representations of Borrowers contained in the Loan Documents shall
survive any such termination and Agent shall retain its Liens in the
Collateral and Agent and each Lender shall retain all of its rights and
remedies under the Loan Documents notwithstanding such termination
until Borrowers have paid or collateralized to Agent's reasonable
satisfaction all of the Obligations (other than unasserted contingent
indemnity obligations) in immediately available funds, all Letters of
Credit and LC Guaranties have expired, terminated or have been cash
collateralized (in an amount equal to 105% of the LC Amount) to Agent's
reasonable satisfaction and Borrowers have complied with subsection
3.2.5; and, upon such payments and other events having occurred,
Agent's Liens on the Collateral shall terminate (other than Collateral
specifically retained to collateralize outstanding Obligations) and
Agent shall, at the expense of Borrowers, execute and deliver any and
all termination statements, releases and other documents reasonably
requested by Borrowers to evidence such termination. Notwithstanding
the foregoing, Agent shall not be required to terminate its Liens in
the Collateral unless, solely to the extent necessary to protect
against any loss or damage Agent may incur as a result of dishonored
checks or other returned items of payment received by Agent from any
Borrower or any Account Debtor and applied to the Obligations, Agent
shall, at its option, (i) have received a written agreement reasonably
satisfactory to Agent, executed by Borrowers and by any Person whose
loans or other advances to any Borrower are used in whole or in part to
satisfy the Obligations, indemnifying Agent and each Lender from any
such loss or damage or (ii) have retained cash Collateral or other
Collateral for such period of time as Agent, in its reasonable
discretion, may deem necessary to protect Agent and each Lender from
any such loss or damage.
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SECTION 5. SECURITY INTERESTS
5.1 Security Interest in Collateral.
To secure the prompt payment and performance to Agent and each
Lender of the Obligations, each Borrower hereby grants to Agent for the benefit
of itself and each Lender a continuing Lien upon all of such Borrower's assets,
including all of the following Property and interests in Property of such
Borrower, whether now owned or existing or hereafter created, acquired or
arising and wheresoever located:
(i) Accounts;
(ii) Certificated Securities;
(iii) Chattel Paper;
(iv) Computer Hardware and Software and all
rights with respect thereto, including, any and all licenses,
options, warranties, service contracts, program services, test
rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications, and any
substitutions, replacements, additions or model conversions of
any of the foregoing;
(v) Contract Rights;
(vi) Deposit Accounts;
(vii) Documents;
(viii) Equipment;
(ix) Financial Assets;
(x) Fixtures;
(xi) General Intangibles, including Payment
Intangibles and Software;
(xii) Goods (including all of its Equipment,
Fixtures and Inventory), and all accessions, additions,
attachments, improvements, substitutions and replacements
thereto and therefor;
(xiii) Instruments;
(xiv) Intellectual Property;
(xv) Inventory;
(xvi) Investment Property;
(xvii) money (of every jurisdiction whatsoever);
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(xviii) Letter-of-Credit Rights;
(xix) Payment Intangibles;
(xx) Security Entitlements;
(xxi) Software;
(xxii) Supporting Obligations;
(xxiii) Uncertificated Securities; and
(xxiv) to the extent not included in the foregoing,
all other personal property of any kind or description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided, that to the extent that the provisions of any lease,
license, contract, permit, Document or Instrument expressly prohibit (which
prohibition is enforceable under applicable law) any assignment thereof (unless
such prohibition specifically excludes from its scope an assignment for
collateral security purposes) or the grant of a Lien therein, (i) Agent will not
enforce its Lien in the applicable Borrower's rights under such lease, license,
contract, permit, Document or Instrument (other than in respect of the Proceeds
thereof) for so long as such prohibition continues, and (ii) to the extent a
violation of any such prohibition caused by the Lien under this Section 5.1
would allow the counterparty to any such lease, license, contract, permit,
Document or Instrument to terminate the same under applicable law, then such
lease, license, contract, permit, Document or Instrument (other than in respect
of the Proceeds thereof) shall not constitute Collateral for so long as such
prohibition continues; it being understood that upon request of Agent, such
Borrower will in good faith use reasonable efforts to obtain consent
for the creation of a Lien in favor of Agent (and to Agent's enforcement of such
Lien) in any lease, license, contract, permit, Document or Instrument that
prohibits any assignment thereof or the grant of a Lien therein; and provided,
further, that no Lien is granted in any "intent to use" trademark applications
until such time as a verified statement of use is filed.
5.2 Other Collateral.
5.2.1 Commercial Tort Claims. The applicable Borrower shall
promptly notify Agent in writing upon having a Commercial Tort Claim
that arises after the Closing Date against any third party and, upon
request of Agent, promptly enter into an amendment to this Agreement
and take such other action reasonably deemed necessary by Agent to give
Agent a security interest in any such Commercial Tort Claim. Each
Borrower represents and warrants that as of the date of this Agreement,
to its knowledge, it does not have any Commercial Tort Claims.
5.2.2 Other Collateral. The applicable Borrower shall promptly
notify Agent in writing upon acquiring or otherwise obtaining any
Collateral after the date hereof consisting of Deposit Accounts,
Investment Property or Letter-of-Credit Rights in (or
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relating to) an amount in excess of $250,000 or Electronic Chattel
Paper in (or relating to) an amount in excess of $1,000,000 and, upon
the request of Agent, promptly execute such other documents, and do
such other acts or things deemed appropriate by Agent to deliver to
Agent control with respect to such Collateral; promptly notify Agent in
writing upon acquiring or otherwise obtaining any Collateral after the
date hereof consisting of Documents or Instruments in (or relating to)
an amount in excess of $250,000 and, upon the request of Agent, will
promptly execute such other documents, and take such other action
deemed appropriate by Agent to deliver to Agent possession of such
Documents which are negotiable and Instruments, and, with respect to
nonnegotiable Documents, to have such nonnegotiable Documents issued in
the name of Agent; and with respect to Collateral having a value in
excess of $250,000 that is in the possession of a third party, other
than Certificated Securities and Goods covered by a Document, obtain an
acknowledgement from the third party that it is holding the Collateral
for the benefit of Agent.
5.3 Lien Perfection; Further Assurances.
Each Borrower shall execute such instruments, assignments or
documents as are necessary to perfect Agent's Lien upon any of the Collateral
and shall take such other action as may be required to perfect or to continue
the perfection of Agent's Lien upon the Collateral. Unless prohibited by
applicable law, each Borrower hereby authorizes Agent to execute and file any
such financing statement, including, without limitation, financing statements
that indicate the Collateral (i) as all assets of such Borrower or words of
similar effect, or (ii) as being of an equal or lesser scope, or with greater or
lesser detail, than as set forth in Section 5.1, on such Borrower's behalf. Each
Borrower also hereby ratifies its authorization for Agent to have filed in any
jurisdiction any like financing statements or amendments thereto if filed prior
to the date hereof. The parties agree that a carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement and
may be filed in any appropriate office in lieu thereof. At Agent's request, each
Borrower shall also promptly execute or cause to be executed and shall deliver
to Agent any and all documents, instruments and agreements reasonably deemed
necessary by Agent to give effect to or carry out the terms of the Loan
Documents.
5.4 Lien on Realty.
The due and punctual payment and performance of the
Obligations shall also be secured by the Lien created by Mortgages upon all real
Property of each Borrower now or hereafter owned (it being agreed and understood
that ▇▇▇▇▇▇▇ will not execute and deliver a Mortgage with respect to the ▇▇▇▇▇▇▇
Parcel unless and until it has title to the ▇▇▇▇▇▇▇ Parcel sufficient to allow
▇▇▇▇▇▇▇ to provide such a Mortgage). Each Mortgage shall be executed by the
applicable Borrower in favor of Agent. Each Mortgage shall be duly recorded, at
Borrowers' joint and several expense, in each office where such recording is
required to constitute a fully perfected first Lien on the real Property covered
thereby. If so requested by Agent or Majority Lenders, the applicable Borrower
shall deliver to Agent, at Borrowers' joint and several expense, mortgagee title
insurance policies issued by a title insurance company that is selected by
Borrowers and reasonably satisfactory to Agent, which policies shall be in form
and substance reasonably satisfactory to Agent and shall insure a valid first
Lien in favor of Agent, for the benefit of itself and the Lenders, on the
Property covered by each Mortgage (other than with
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respect to the ▇▇▇▇▇▇▇ Parcel, the Ashland Parcel and the real Property of
Neenah located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in Neenah, Wisconsin), subject only to
those exceptions reasonably acceptable to Agent and its counsel. The applicable
Borrower shall deliver to Agent such other documents, including, without
limitation, as-built survey prints of the real Property, as Agent and its
counsel may reasonably request relating to the real Property subject to the
Mortgages, other than with respect to the ▇▇▇▇▇▇▇ Parcel, the Ashland Parcel and
the real Property of Neenah located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in Neenah,
Wisconsin.
SECTION 6. COLLATERAL ADMINISTRATION
6.1 General.
6.1.1 Location of Collateral. All Collateral, other than Goods
in transit, motor vehicles, Goods (other than Eligible Inventory) in
the possession of employees in the ordinary course of business and
other miscellaneous immaterial items of Collateral not having a value
that exceeds $250,000 in the aggregate, will at all times be kept by a
Borrower or one of its Subsidiaries, or a bailee, distributor,
consignee, warehousemen or similar party of a Borrower or one of its
Subsidiaries, at one or more of the business locations set forth in
Exhibit 6.1.1 hereto, as updated by Borrowers providing prior written
notice to Agent of any new location.
6.1.2 Insurance of Collateral. Borrowers shall maintain and
pay for insurance upon all Collateral wherever located and with respect
to the business of each Borrower and each of its Subsidiaries, covering
casualty, hazard, public liability, workers' compensation, business
interruption and such other risks in such amounts and with such
insurance companies as are reasonably satisfactory to Agent. Borrowers
shall deliver certified copies of such policies to Agent as promptly as
practicable, with satisfactory lender's loss payable endorsements,
naming Agent (on behalf of the Lenders) as a loss payee, assignee or
additional insured, as appropriate, as its interest may appear, showing
only such other loss payees, assignees and additional insureds as are
satisfactory to Agent and with respect to business interruption
insurance, an executed collateral assignment thereof. Each policy of
insurance or endorsement shall contain a clause requiring the insurer
to give not less than 10 days' prior written notice to Agent in the
event of cancellation of the policy for nonpayment of premium and not
less than 30 days' prior written notice to Agent in the event of
cancellation of the policy for any other reason whatsoever and a clause
specifying that the interest of Agent shall not be impaired or
invalidated by any act or neglect of any Borrower, any of its
Subsidiaries or the owner of the Property or by the occupation of the
premises for purposes more hazardous than are permitted by said policy.
Borrowers agree to deliver to Agent, promptly as rendered, true copies
of all reports made in any reporting forms to insurance companies. At
any time when a Dominion Period is in effect, all net proceeds of
business interruption insurance (if any) of each Borrower and its
Subsidiaries shall be remitted to Agent for application to the
outstanding balance of the Revolving Credit Loans (subject to the third
sentence of subsection 3.4.1).
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By its execution of this Agreement, Agent acknowledges that,
as of the date hereof, the insurance coverages of Borrowers and its
Subsidiaries and the insurance companies providing such coverages are
satisfactory to Agent in its reasonable judgment.
Unless Borrowers provide Agent with evidence of the insurance
coverage required by this Agreement, Agent may purchase insurance at
Borrowers' joint and several expense to protect Agent's interests in
the Properties of each Borrower and its Subsidiaries. This insurance
may, but need not, protect the interests of each Borrower and its
Subsidiaries. The coverage that Agent purchases may not pay any claim
that a Borrower or any Subsidiary of such Borrower makes or any claim
that is made against a Borrower or any such Subsidiary in connection
with said Property. Borrowers may later cancel any insurance purchased
by Agent, but only after providing Agent with evidence that Borrowers
and their Subsidiaries have obtained insurance as required by this
Agreement If Agent purchases insurance, Borrowers will be jointly and
severally responsible for the costs of that insurance, including
interest and any other charges Agent may impose in connection with the
placement of insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to
the Obligations. The costs of the insurance may be more than the cost
of insurance that Borrowers and the Subsidiaries may be able to obtain
on their own.
6.1.3 Protection of Collateral. Neither Agent nor any Lender
shall be liable or responsible in any way for the safekeeping of any of
the Collateral or for any loss or damage thereto (except for reasonable
care in the custody thereof while any Collateral is in Agent's or any
Lender's actual possession) or for any diminution in the value thereof,
or for any act or default of any warehouseman, carrier, forwarding
agency, or other person whomsoever, but the same shall be at Borrowers'
sole risk.
6.2 Administration of Accounts.
6.2.1 Records, Schedules and Assignments of Accounts. Each
Borrower shall keep accurate and complete records in all material
respects of its Accounts and all payments and collections thereon and
shall submit to Agent on such periodic basis as Agent shall reasonably
request a sales and collections report for the preceding period, in
form consistent with the reports currently prepared by such Borrower
with respect to such information. Concurrently with the delivery of
each Borrowing Base Certificate described in subsection 8.1.4, or more
frequently as reasonably requested by Agent, from and after the date
hereof, each Borrower shall deliver to Agent a detailed aged trial
balance of all of its Accounts, specifying the names, addresses, face
values, dates of invoices and due dates for each Account Debtor
obligated on an Account so listed ("Schedule of Accounts"), and upon
Agent's request therefor, copies of proof of delivery and the original
copy of all documents, including, without limitation, repayment
histories and present status reports relating to the Accounts so
scheduled and such other matters and information relating to the status
of then existing Accounts as Agent shall reasonably request. During the
continuance of an Event of Default, if requested by Agent, each
Borrower shall execute and deliver to Agent formal written assignments
of all of its Accounts weekly, which shall include all Accounts that
have been created since the date
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of the last assignment, together with copies of invoices or invoice
registers related thereto.
6.2.2 Discounts, Allowances, Disputes. If a Borrower grants
any discounts, allowances or credits that are not shown on the face of
the invoice for the Account involved, such Borrower shall report such
discounts, allowances or credits, as the case may be, to Agent as part
of the next required Schedule of Accounts.
6.2.3 Account Verification. Any of Agent's officers, employees
or agents shall have the right, at any time or times hereafter, in the
name of Agent, any designee of Agent or a Borrower, to verify the
validity and amount of any Accounts by mail, telephone, electronic
communication or otherwise; provided, that Agent shall conduct Account
verifications with appropriate discretion in accordance with its
customary practices and procedures solely to verify the validity and
amounts of Accounts and, so long as no Event of Default has occurred
and is continuing, (a) Agent shall provide Borrowers with at least 1
Business Day's prior notice that Agent will be conducting Account
verifications pursuant to this subsection 6.2.3 (it being understood
that Agent shall have no duty to identify any of the specific Account
Debtors to be contacted by Agent in connection therewith) and (b) Agent
shall afford Borrowers the opportunity to have an observational role
with respect to any Account verifications conducted pursuant to this
subsection 6.2.3 (it being understood that Borrowers shall have no
right to be an active participant with respect to any such Account
verifications). Each Borrower shall cooperate with all reasonable
requests of Agent in an effort to facilitate and promptly conclude any
such verification process.
6.2.4 Maintenance of Dominion Account. Each Borrower shall
maintain a Dominion Account or Accounts pursuant to lockbox and blocked
account arrangements acceptable to Agent with such banks as may be
selected by such Borrower and be acceptable to Agent. Each Borrower
shall issue to any such banks an irrevocable letter of instruction
directing such banks to deposit all payments or other remittances
received in the lockbox and blocked accounts to the Dominion Account.
Each Borrower shall obtain the agreement by the applicable banks in
favor of Agent to waive any recoupment, setoff rights, and any security
interest in, or against, the funds so deposited. All funds deposited in
the Dominion Account shall be available to Borrowers at their
discretion unless a Dominion Period is in effect. If a Dominion Period
(including, without limitation, the Initial Dominion Period) is in
effect, all funds in the Dominion Account shall (i) immediately become
the property of Agent, for the ratable benefit of Lenders and (ii) be
applied on account of the Obligations as provided in subsection 3.2.1.
If a Dominion Event occurs at any time after the Initial Dominion
Period, Agent may, and at the direction of Majority Lenders Agent
shall, send the appropriate notice to Borrowers to commence a new
Dominion Period.
6.2.5 Collection of Accounts, Proceeds of Collateral. Each
Borrower agrees that all invoices rendered and other requests made by
such Borrower for payment in respect of Accounts shall contain a
written statement directing payment in respect of such Accounts to be
paid to a lockbox or a blocked account established pursuant to
subsection 6.2.4. To expedite collection, each Borrower shall endeavor
in the first instance to make
33
collection of its Accounts for Agent in a manner that is consistent
with the ordinary course of its business. All remittances received by
each Borrower on account of Accounts, together with the proceeds of any
other Collateral, shall be immediately deposited in kind in the
Dominion Account and shall, at any time when a Dominion Period is in
effect, be held by such Borrower until such deposit has occurred as
trustee of an express trust on behalf of Agent (for its benefit and the
benefit of the Lenders). Agent retains the right at all times after the
occurrence and during the continuance of an Event of Default to notify
Account Debtors that each Borrower's Accounts have been assigned to
Agent and to collect each Borrower's Accounts directly in its own name,
or in the name of Agent's agent, and to charge the collection costs and
expenses, including attorneys' fees, jointly and severally to
Borrowers.
6.2.6 Taxes. If an Account includes a charge for any tax
payable to any governmental taxing authority, Agent is authorized, in
its sole discretion, to pay the amount thereof to the proper taxing
authority for the account of any Borrower and to charge that Borrower
for such tax, except for taxes that (i) are being actively contested in
good faith and by appropriate proceedings and for which the applicable
Borrower maintains reasonable reserves on its books and (ii) would not
reasonably be expected to result in any Lien other than a Permitted
Lien. In no event shall Agent or any Lender be liable for any taxes of
any Borrower due and payable to any governmental taxing authority.
6.3 Administration of Inventory.
Each Borrower shall keep records of its Inventory which
records shall be complete and accurate in all material respects. Each Borrower
shall furnish to Agent Inventory reports concurrently with the delivery of each
Borrowing Base Certificate described in subsection 8.1.4 or more frequently as
reasonably requested by Agent, which reports will be in such other format and
detail as Agent shall reasonably request and shall include a current list of all
locations of such Borrower's Inventory. Each Borrower shall conduct a physical
inventory no less frequently than annually and shall provide to Agent a report
based on each such physical inventory promptly thereafter, together with such
supporting information as Agent shall reasonably request.
6.4 Administration of Equipment.
Each Borrower shall keep records of its Equipment which shall
be complete and accurate in all material respects itemizing and describing the
kind, type, quality, quantity and book value of its Equipment and all
dispositions made in accordance with subsection 8.2.9 hereof, and each Borrower
shall, and shall cause each of its Subsidiaries to, furnish Agent with a current
schedule containing the foregoing information on at least an annual basis and
more often during the continuance of an Event of Default if reasonably requested
by Agent. Promptly after the request therefor by Agent, each Borrower shall
deliver to Agent any and all evidence of ownership, if any, of any of its
Equipment.
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6.5 Payment of Charges.
All amounts chargeable to any Borrower under Section 6 hereof
shall be Obligations secured by all of the Collateral, shall be payable on
demand and shall bear interest from the date such advance was made until paid in
full at the rate applicable to Base Rate Revolving Portions from time to time.
SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 General Representations and Warranties.
To induce Agent and each Lender to enter into this Agreement
and to make advances hereunder, each Borrower warrants, represents and covenants
to Agent and each Lender that:
7.1.1 Qualification. Each Borrower and each of its
Subsidiaries is a corporation, limited partnership or limited liability
company duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization. Each
Borrower and each of its Subsidiaries is duly qualified and is
authorized to do business and is in good standing as a foreign limited
liability company, limited partnership or corporation, as applicable,
in (a) as of the date hereof, each state or jurisdiction listed on
Exhibit 7.1.1 hereto and (b) all states and jurisdictions in which the
failure of such Borrower or any of its Subsidiaries to be so qualified
would reasonably be expected to have a Material Adverse Effect.
7.1.2 Power and Authority. Each Borrower and each of its
Subsidiaries is duly authorized and empowered to enter into, execute,
deliver and perform this Agreement and each of the other Loan Documents
to which it is a party. The execution, delivery and performance of this
Agreement and each of the other Loan Documents have been duly
authorized by all necessary corporate or other relevant action and do
not and will not (i) require any consent or approval of the
shareholders of such Borrower or any of the shareholders, partners or
members, as the case may be, of any Subsidiary of such Borrower; (ii)
contravene such Borrower's or any of its Subsidiaries' charter,
articles or certificate of incorporation, partnership agreement,
certificate of formation, by-laws, limited liability agreement,
operating agreement or other organizational documents (as the case may
be); (iii) violate, or cause such Borrower or any of its Subsidiaries
to be in default under, any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award in
effect having applicability to such Borrower or any of its
Subsidiaries, the violation of which would reasonably be expected to
have a Material Adverse Effect; (iv) result in a breach of or
constitute a default under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which such Borrower or any
of its Subsidiaries is a party or by which it or its Property may be
bound or affected, the breach of or default under which could
reasonably be expected to have a Material Adverse Effect; or (v) result
in, or require, the creation or imposition of any Lien (other than
Permitted Liens) upon or with respect to any of the Property now owned
or hereafter acquired by such Borrower or any of its Subsidiaries.
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7.1.3 Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement
will be, a legal, valid and binding obligation of each Borrower and
each of its Subsidiaries party thereto, enforceable against it in
accordance with its respective terms, subject to the effects of
applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting creditors' rights generally and equitable
principles of general applicability (regardless of whether such
enforceability is considered in a proceeding at law or in equity).
7.1.4 Capital Structure. Exhibit 7.1.4 hereto states, as of
the date hereof, (i) the correct name of each of the Subsidiaries of
each Borrower, its jurisdiction of incorporation or organization and
the percentage of its Voting Stock owned by such Borrower, (ii) the
name of each Borrower's and each of its Subsidiaries' corporate or
joint venture relationships and the nature of the relationship, (iii)
the number, nature and holder of all outstanding Securities of each
Borrower and the holder of Securities of each Subsidiary of such
Borrower and (iv) the number of authorized, issued and treasury
Securities of each Borrower. Each Borrower has good title to all of the
Securities it purports to own of each of such Subsidiaries, free and
clear in each case of any Lien other than Permitted Liens. All such
Securities have been duly issued and are fully paid and non-assessable.
As of the date hereof, there are no outstanding options to purchase, or
any rights or warrants to subscribe for, or any commitments or
agreements to issue or sell any Securities or obligations convertible
into, or any powers of attorney relating to any Securities of any
Borrower or any of its Subsidiaries. Except as set forth on Exhibit
7.1.4, as of the date hereof, there are no outstanding agreements or
instruments binding upon any of any Borrower's or any of its
Subsidiaries' partners, members or shareholders, as the case may be,
relating to the ownership of its Securities.
7.1.5 Names; Organization. As of the date hereof, within the
last five years neither any Borrower nor any of its Subsidiaries has
been known as or has used any legal, fictitious or trade names except
those listed on Exhibit 7.1.5 hereto. Except as set forth on Exhibit
7.1.5, during the last 5 years neither any Borrower nor any of its
Subsidiaries has been the surviving entity of a merger or consolidation
or has acquired all or substantially all of the assets of any Person.
As of the date hereof, each Borrower's and each of its Subsidiaries'
state(s) of incorporation or organization, Type of Organization and
Organizational I.D. Number is set forth on Exhibit 7.1.5. As of the
date hereof, the exact legal name of each Borrower and each of its
Subsidiaries is set forth on Exhibit 7.1.5.
7.1.6 Business Locations; Agent for Process. Each Borrower's
and each of its Subsidiary's chief executive office, location of books
and records and other places of business are as listed on Exhibit 6.1.1
hereto, as updated from time to time by Borrowers in accordance with
the provisions of subsection 6.1.1. During the preceding six-month
period, neither any Borrower nor any of its Subsidiaries has had a
principal place of business, chief executive office or location of
tangible Collateral (except for miscellaneous immaterial items of
Collateral not having a value that exceeds $250,000 in the aggregate),
other than as listed on Exhibit 6.1.1. All tangible Collateral is kept
by a Borrower and its Subsidiaries in accordance with subsection 6.1.1.
Except for miscellaneous immaterial items of Collateral not having a
value that exceeds $250,000 in
36
the aggregate or as shown on Exhibit 6.1.1, as of the date hereof, no
Inventory is stored with a bailee, distributor, warehouseman or similar
party, nor is any Inventory consigned to any Person.
7.1.7 Title to Properties: Priority of Liens. Each Borrower
and each of its Subsidiaries has good, indefeasible and marketable
title to and fee simple ownership of, or, to the extent relating to the
leased location at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ in Wheatland, Pennsylvania or at
any leased property that involves rental payments exceeding $50,000 in
the aggregate per fiscal year, valid leasehold interests in, all of its
real Property, and good title to all of the Collateral and all of its
other Property, in each case, free and clear of all Liens except
Permitted Liens. Each Borrower and each of its Subsidiaries has paid or
discharged all lawful claims that are due and payable which, if unpaid,
would reasonably be expected to become a Lien against any of such
Borrower's or such Subsidiary's Properties that is not a Permitted
Lien. The Liens granted to Agent under Section 5 hereof are first
priority Liens, subject only to Permitted Liens.
7.1.8 Accounts. Agent may rely, in determining which Accounts
are Eligible Accounts, on all statements and representations made by
each Borrower with respect to any Account or Accounts. With respect to
each of each Borrower's Eligible Accounts, unless otherwise disclosed
to Agent in writing:
(i) It is genuine and in all respects what it
purports to be, and it is not evidenced by a judgment;
(ii) It arises out of a completed, bona fide sale and
delivery of goods or rendition of services by such Borrower,
in the ordinary course of its business and in accordance with
the material terms and conditions of all purchase orders,
contracts or other documents relating thereto and forming a
part of the contract between such Borrower and the Account
Debtor;
(iii) It is for a liquidated amount maturing as
stated in the duplicate invoice covering such sale or
rendition of services, a copy of which has been furnished or
is available to Agent;
(iv) There are no facts, events or occurrences
which in any material way impair the validity or
enforceability of any Eligible Accounts or tend to reduce the
amount payable thereunder from the face amount of the invoice
and statements delivered or made available to Agent with
respect thereto;
(v) To the best of such Borrower's knowledge,
the Account Debtor thereunder (1) had the capacity to contract
at the time any contract or other document giving rise to the
Eligible Account was executed and (2) such Account Debtor is
Solvent; and
(vi) To the best of such Borrower's knowledge,
there are no proceedings or actions which are threatened or
pending against the Account Debtor thereunder which would
reasonably be expected to result in any material
37
adverse change in such Account Debtor's financial condition or
the collectibility of such Account.
7.1.9 [INTENTIONALLY OMITTED].
7.1.10 Financial Statements; Fiscal Year. The Consolidated and
consolidating balance sheets of Borrowers and Borrowers' Subsidiaries
(including the accounts of all Subsidiaries of Borrowers and their
respective Subsidiaries for the respective periods during which a
Subsidiary relationship existed) as of April 30, 2003, and the related
statements of income, changes in shareholder's equity, and changes in
financial position for the period ended on such date, have been
prepared in accordance with GAAP, and present fairly in all material
respects the financial positions of Borrowers and such Subsidiaries,
taken as a whole, at such date and the results of Borrowers' and such
Subsidiaries' operations, taken as a whole, for such period. As of the
date hereof, since April 30, 2003, there has been no material adverse
change in the financial position of Borrowers and such Subsidiaries,
taken as a whole, as reflected in the balance sheets as of such date,
it being understood that (i) changes, events of effects primarily
attributable to (a) the bankruptcy filing of the Chapter 11 Debtors or
(b) the public announcement of such filing or the transactions
contemplated thereby, and (ii) changes or events affecting general
economic conditions, but not otherwise materially and adversely
affecting the business, assets or financial condition of Borrowers' and
Borrowers' Subsidiaries, shall not be considered material adverse
changes for purposes of the foregoing. As of the date hereof, the
fiscal year of Parent and each of its Subsidiaries ends on September 30
of each year.
7.1.11 Full Disclosure. The financial statements referred to
in subsection 7.1.10 hereof do not, nor does this Agreement, the Plan
of Reorganization, the Disclosure Statement, or any other written
statement of any Borrower to Agent or any Lender contain any untrue
statement of a material fact or omit a material fact necessary to make
the statements contained therein or herein not misleading in light of
the circumstances in which they were made. To the best of Borrowers'
knowledge after reasonable inquiry, there is no fact which any Borrower
has failed to disclose to Agent or any Lender in writing which would
reasonably be expected to have a Material Adverse Effect.
7.1.12 Solvent Financial Condition. After giving effect to the
initial Loans to be made and the initial Letters of Credit and LC
Guaranties to be issued hereunder, the issuance of the Secured Bonds
and the Subordinated Bonds and the consummation of the other
transactions contemplated hereby, each of Ultimate Parent, Parent,
Borrowers and the Subsidiaries of Borrowers will be Solvent on a
consolidated basis (after giving effect to all rights of contribution
and the like).
7.1.13 Surety Obligations. Except as set forth on Exhibit
7.1.13, as of the date hereof, neither any Borrower nor any of its
Subsidiaries is obligated as surety or indenmitor under any surety or
similar bond or other contract issued for the benefit of any Person
(including without limitation a Borrower or a Subsidiary of a Borrower)
that in any case involves an amount exceeding $50,000, or has issued or
entered into any agreement to assure payment, performance or completion
of performance of any
38
undertaking or obligation of any Person (including, without limitation,
a Borrower or a Subsidiary of a Borrower) that in any case involves an
amount exceeding $50,000, except as otherwise expressly permitted
hereunder.
7.1.14 Taxes. Each Borrower and each of its Subsidiaries has
filed all applicable federal, state and local tax returns and other
reports relating to taxes it is required by law to file, other than
such returns and reports where the amounts due and payable as shown do
not exceed $100,000 individually or $250,000 in the aggregate, and each
Borrower and each of its Subsidiaries has paid when due and payable, or
made provision for the payment of when due and payable, all taxes shown
on its returns and all assessments, fees, levies and other governmental
charges shown thereon or therein, other than taxes, assessments, fees,
levies and other governmental charges that do not exceed $100,000
individually or $250,000 in the aggregate, unless and to the extent any
thereof are being actively contested in good faith and by appropriate
proceedings and each Borrower and each of its Subsidiaries maintains
reasonable reserves on its books therefor. The provision for taxes on
the books of each Borrower and its Subsidiaries is adequate for the
current fiscal year.
7.1.15 Brokers. Except as shown on Exhibit 7.1.15 hereto,
there are no claims for brokerage commissions, finder's fees or
investment banking fees payable by any Borrower or any of its
Subsidiaries in connection with the transactions contemplated by this
Agreement, including, without limitation, the issuance of the Secured
Bonds and the Subordinated Bonds.
7.1.16 Patents, Trademarks, Copyrights and Licenses. Each
Borrower and each of its Subsidiaries owns, possesses or licenses or
has the right to use all the patents, trademarks, service marks, trade
names, copyrights, licenses and other Intellectual Property necessary
for the present and planned future conduct of its business without any
known conflict with the rights of others, except for such conflicts as
could not reasonably be expected to have a Material Adverse Effect. All
patents, U.S. federally registered trademarks, U.S. federally
registered service marks, U.S. federally registered trade names, U.S.
federally registered copyrights, material licenses, and other material
similar rights owned by a Borrower or a Subsidiary of a Borrower as of
the date hereof (and not abandoned) are listed on Exhibit 7.1.16
hereto, as updated from time to time by notice to Agent. As of the date
hereof, no claim has been asserted to any Borrower or any of its
Subsidiaries which is currently pending that their use of their
Intellectual Property or the conduct of their business does or may
infringe upon the Intellectual Property rights of any third party. To
the knowledge of each Borrower and except as set forth on Exhibit
7.1.16 hereto, as of the date hereof, no Person is engaging in any
activity that infringes in any material respect upon any Borrower's or
any of its Subsidiaries material Intellectual Property. Except as set
forth on Exhibit 7.1.16, each Borrower's and each of its Subsidiaries'
(i) material trademarks, service marks, and copyrights are registered
with the US. Patent and Trademark Office or in the U.S. Copyright
Office, as applicable and (ii) neither any Borrower nor any of its
Subsidiaries has any material license agreements. The consummation and
performance of the transactions and actions contemplated by this
Agreement and the other Loan Document, including without limitation,
the exercise by Agent of any of its rights or remedies under Section
10, will not result in the termination
39
or impairment of any of any Borrower's or any of its Subsidiaries
ownership or rights relating to its Intellectual Property, except for
such Intellectual Property rights the loss or impairment of which could
not reasonably be expected to have a Material Adverse Effect.
7.1.17 Governmental Consents. Except as disclosed on Exhibit
7.1.17, each Borrower and each of its Subsidiaries has, and is in good
standing with respect to, all governmental consents, approvals,
licenses, authorizations, permits, certificates, inspections and
franchises necessary to continue to conduct its business as heretofore
or proposed to be conducted by it and to own or lease and operate its
Property as now owned or leased by it, except where the failure to
obtain, possess or so maintain such rights, consents, approvals,
licenses, authorizations, permits, certificates, inspections and
franchises would not reasonably be expected to have a Material Adverse
Effect.
7.1.18 Compliance with Laws. Each Borrower and each of its
Subsidiaries has duly complied, and its Property, business operations
and leaseholds are in compliance with, the provisions of all federal,
state and local laws, rules and regulations applicable to such Borrower
or such Subsidiary, as applicable, its Property or the conduct of its
business, except for such non-compliance as would not reasonably be
expected to have a Material Adverse Effect, and there have been no
citations, notices or orders of noncompliance issued to any Borrower or
any of its Subsidiaries under any such law, rule or regulation, except
where such noncompliance would not reasonably be expected to have a
Material Adverse Effect or as disclosed on Exhibit 7.1.18. No Inventory
has been produced in violation of the Fair Labor Standards Act (29
U.S.C. Section 201 et seq.), as amended.
7.1.19 Restrictions. Neither any Borrower nor any of its
Subsidiaries is a party or subject to any contract or agreement which
by its terms limits the right or ability of such Borrower or such
Subsidiary to incur Indebtedness, other than as set forth on Exhibit
7.1.19 hereto, none of which prohibit the execution of or compliance
with this Agreement or the other Loan Documents by any Borrower or any
of its Subsidiaries, as applicable.
7.1.20 Litigation. Except as set forth on Exhibit 7.1.20
hereto, there are no actions, suits, proceedings or investigations
pending, or to the knowledge of each Borrower, threatened, against or
affecting any Borrower or any of its Subsidiaries, or the business,
operations, Property, prospects, profits or condition of any Borrower
or any of its Subsidiaries which, singly or in the aggregate, would
reasonably be expected to have a Material Adverse Effect. Neither any
Borrower nor any of its Subsidiaries is in default with respect to any
order, writ, injunction, judgment, decree or rule of any court,
governmental authority or arbitration board or tribunal, which, singly
or in the aggregate, would reasonably be expected to have a Material
Adverse Effect, except as disclosed on Exhibit 7.1.20.
7.1.21 No Defaults. No event has occurred and no condition
exists which would, upon or after the execution and delivery of this
Agreement or any Borrower's performance hereunder, constitute a Default
or an Event of Default. Neither any Borrower nor any of its
Subsidiaries is in default in (and no event has occurred and no
condition exists which constitutes, or which the passage of time or the
giving of notice or
40
both would constitute, a default in) the payment of any Indebtedness to
any Person in excess of $500,000.
7.1.22 Leases. Exhibit 7.1.22 hereto is a complete listing as
of the date hereof of all capitalized and operating personal property
leases of each Borrower and its Subsidiaries and all real property
leases of each Borrower and its Subsidiaries, in each case having
annual lease payments in excess of $150,000. Each Borrower and each of
its Subsidiaries is not in breach or default under any of its
respective capitalized and operating leases, except where the failure
to so comply would not reasonably be expected to have a Material
Adverse Effect or except as disclosed on Exhibit 7.1.22.
7.1.23 Pension Plans. As of the date hereof, except as
disclosed on Exhibit 7.1.23 hereto, neither any Borrower nor any of its
Subsidiaries has any Plan. Each Borrower and each of its Subsidiaries
is in compliance with the requirements of ERISA with respect to each
Plan, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. No fact or situation that
could reasonably be expected to result in a Material Adverse Effect
exists in connection with any Plan. Except as disclosed on Exhibit
7.1.23 hereto, neither any Borrower nor any of its Subsidiaries has any
withdrawal liability in connection with a Multiemployer Plan.
7.1.24 Trade Relations. There exists no actual or, to each
Borrower's knowledge, threatened termination, cancellation or
limitation of, or any modification or change in, the business
relationship between any Borrower or any of its Subsidiaries and any
customer or any group of customers whose purchases individually or in
the aggregate are material to the business of such Borrower and its
Subsidiaries, or with any material supplier, except in each case, where
the same could not reasonably be expected to have a Material Adverse
Effect, and there exists no present condition or state of facts or
circumstances which would prevent any Borrower or any of its
Subsidiaries from conducting such business after the consummation of
the transactions contemplated by this Agreement in substantially the
same manner in which it has heretofore been conducted.
7.1.25 Labor Relations. Except as described on Exhibit 7.1.25
hereto, as of the date hereof, neither any Borrower nor any of its
Subsidiaries is a party to any collective bargaining agreement. Except
as described on Exhibit 7.1.25 hereto, there are no material
grievances, disputes or controversies with any union or any other
organization of any Borrower's or any of its Subsidiaries' employees,
or, to the best of Borrowers' knowledge after reasonable inquiry,
threats of strikes, work stoppages or any asserted pending demands for
collective bargaining by any union or organization, except those that
would not reasonably be expected to have a Material Adverse Effect.
7.1.26 Plan of Reorganization. Borrowers have delivered to
Agent a true and correct copy of the Plan of Reorganization (as
amended) and the Plan of Reorganization delivered has not been amended
or modified. The Plan of Reorganization has been confirmed pursuant to
the Confirmation Order, Borrowers have delivered to Agent a true and
correct copy of the Confirmation Order, the Confirmation Order has not
been amended or modified, no objections to the Plan of Reorganization
were raised at the
41
confirmation hearing before the Bankruptcy Court at which the
Confirmation Order was issued, and the Plan of Reorganization has
become effective in accordance with its terms.
7.1.27 Business Activity. As of the date hereof, neither
Ultimate Parent, Parent nor any Inactive Subsidiary is engaged in any
active operating business or incurs any Indebtedness other than the
ownership of the equity interests of Parent (in the case of Ultimate
Parent) and Neenah (in the case of Parent), the ownership of the
▇▇▇▇▇▇▇ Parcel (in the case of ▇▇▇▇▇▇▇), the ownership of the Ashland
Parcel (in the case of ▇▇▇▇▇▇ - Ashland), the performance of the
Obligations, the performance of the Indebtedness evidenced by the
Secured Bonds and the Subordinated Bonds, the guaranty of Indebtedness
incurred by a Borrower or an active Subsidiary, and the performance of
its obligations under intercompany agreements and agreements with its
shareholders that have been disclosed to Agent in writing.
7.1.28 MACT Standards. Borrowers have furnished (or have
caused to be furnished) or made available to Agent all relevant
material reports and related materials that Borrowers and their
consultants and advisors have produced in respect of Borrowers'
implementation of programs for compliance with MACT Standards and the
potential costs thereof (and such reports comprehensively detail all
material potential costs associated with Borrowers' implementation of
such programs for compliance with MACT Standards).
7.2 Continuous Nature of Representations and Warranties.
Each representation and warranty contained in this Agreement
and the other Loan Documents shall be deemed to have been remade at the time of
each request for a Loan, Letter of Credit or LC Guaranty hereunder and at the
time that any Loan is deemed to have been made under subsection 3.1.1. Each such
request for a Loan, Letter of Credit or LC Guaranty (and the making of any Loan
deemed to have been made under subsection 3.1.1) shall constitute a
representation by Borrowers that such representations and warranties remain
accurate, complete and not misleading at such time, except to the extent that
such representations and warranties relate solely to an earlier date and except
for changes in the nature of a Borrower's or one of such Borrower's Subsidiary's
business or operations that would render the information in any exhibit attached
hereto or to any other Loan Document either inaccurate, incomplete or
misleading, so long as Majority Lenders have consented to such changes, such
changes are expressly permitted by this Agreement, or such changes have been
indicated in an update to an Exhibit that has been made in accordance with
subsection 8.1.12.
7.3 Survival of Representations and Warranties.
All representations and warranties of each Borrower contained
in this Agreement or any of the other Loan Documents shall survive the
execution, delivery and acceptance thereof by Agent and each Lender and the
parties thereto and the closing of the transactions described therein or related
thereto.
42
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
8.1 Affirmative Covenants.
During the Term, and thereafter for so long as there are any
Obligations (other than unasserted contingent indemnity obligations)
outstanding, Borrowers jointly and severally covenant that they shall:
8.1.1 Visits and Inspections; Lender Meeting; Permit. (i)
representatives of Agent, and during the continuation of any Event of
Default, any Lender, from time to time, as often as may be reasonably
requested, but only during normal business hours, to visit and inspect
the Properties of each Borrower and each of its Subsidiaries, inspect,
audit and make extracts from its books and records, and discuss with
its officers and its independent accountants, each Borrower's and each
of its Subsidiaries' business, assets, liabilities, financial
condition, business prospects and results of operations; provided that
(a) unless an Event of Default is in existence, Borrowers shall not
have a reimbursement obligation with respect to more than three such
visits and inspections during any fiscal year, (b) Neenah shall be
afforded the reasonable opportunity to be involved in any such
discussions or communications with such independent accountants and (c)
Agent and, to the extent applicable, Lenders, shall use their
respective best efforts not to interfere with the business of any
Borrower or any Subsidiary of a Borrower in conducting any such visits,
inspections or discussions and (ii) appraisers engaged pursuant to
Section 2.10 (whether or not personnel of Agent), from time to time,
but only during normal business hours, to visit and inspect the
Properties of each Borrower and each of its Subsidiaries, to the extent
necessary to complete the appraisals that are specifically provided for
under Section 2.10. Agent, if no Event of Default then exists, shall
give the applicable Borrower reasonable prior notice of any such
inspection or audit. Without limiting the foregoing, Borrowers will
participate and will cause their key management personnel to
participate in a meeting with Agent and Lenders once during each fiscal
year (except that during the continuation of an Event of Default such
meetings may be held more frequently as requested by Agent or Majority
Lenders), which meeting(s) shall be held at such times at Neenah's
principal place of business as may be reasonably requested by Agent. It
is agreed and understood that so long as no Event of Default has
occurred and is continuing, a failure by Borrowers to comply with any
reasonable request made pursuant to the terms of this subsection 8.1.1
shall not constitute a breach of this subsection 8.1.1 unless such
failure has continued for more than 1 Business Day.
8.1.2 Notices. Promptly notify Agent, any Letter of Credit
Issuers and Lenders in writing of the occurrence of a Default or an
Event of Default.
8.1.3 Financial Statements. Keep, and cause each of its
Subsidiaries, Ultimate Parent and Parent to keep, adequate records and
books of account with respect to its business activities in which
proper entries are made in accordance with customary accounting
practices reflecting all its material financial transactions; and cause
to be prepared and furnished to Agent (with Agent then promptly
furnishing the same to the Lenders), the following, all to be prepared
in accordance with GAAP applied on a
43
consistent basis, unless Parent's certified public accountants concur in any
change therein and such change is disclosed to Agent and is consistent with
GAAP:
(i) not later than 90 days after the close of
each fiscal year of Parent, unqualified (except for a
qualification for a change in accounting principles with which
the accountant concurs) audited financial statements of
Parent, Borrowers and Borrowers' Subsidiaries as of the end of
such year, on a Consolidated and consolidating basis,
certified by a firm of independent certified public
accountants of recognized standing selected by Parent but
acceptable to Agent and, within a reasonable time thereafter a
copy of any management letter issued in connection therewith;
(ii) not later than 30 days after the end of each
month hereafter, including the last month of each fiscal year
of Parent, unaudited interim financial statements of Parent,
Borrowers and Borrowers' Subsidiaries as of the end of such
month and of the portion of the fiscal year then elapsed, on a
Consolidated and consolidating basis, certified by the chief
financial officer of Parent as prepared in accordance with
GAAP and fairly presenting in all material respects the
financial position and results of operations of Parent,
Borrowers and Borrowers' Subsidiaries for such month and
period subject only to changes from audit and year-end
adjustments and except that such statements need not contain
notes;
(iii) together with each delivery of financial
statements pursuant to clause (i) of this subsection 8.1.3, a
management report (1) setting forth in comparative form the
corresponding figures for the corresponding periods of the
previous fiscal year and the corresponding figures from the
most recent Projections for the current fiscal year delivered
pursuant to subsection 8.1.7 and (2) identifying the reasons
for any significant variations. The information above shall be
presented in reasonable detail and shall be certified by the
chief financial officer of Parent to the effect that such
information fairly presents in all material respects the
financial position and the results of operation of Parent,
Borrowers and Borrowers' Subsidiaries as of the dates and for
the periods indicated;
(iv) promptly after the sending or filing
thereof, as the case may be, copies of any proxy statements,
financial statements or reports and copies of any regular,
periodic and special reports or registration statements which
Ultimate Parent, Parent, any Borrower or any Subsidiary of
such Borrower files with the Securities and Exchange
Commission or any governmental authority which may be
substituted therefor, or any national securities exchange;
(v) upon request of Agent, copies of any annual
report to be filed pursuant to ERISA in connection with each
Plan; and
(vi) within a reasonably prompt time after
request therefor, such other data and information (financial
and otherwise) as Agent or any Lender, from time to time, may
reasonably request, bearing upon or related to the Collateral
or
44
Ultimate Parent's, Parent's, any Borrower's or any of its
Subsidiaries' financial position or results of operations.
Concurrently with the delivery of the financial statements
described in paragraph (i) and (ii) (but solely for the last month of
each fiscal quarter of Borrowers) of this subsection 8.1.3, or more
frequently if reasonably requested by Agent, Borrowers shall cause to
be prepared and furnished to Agent a Compliance Certificate in the form
of Exhibit 8.1.3 hereto executed by the Chief Financial Officer of
Parent (a "Compliance Certificate") in such Person's capacity as such.
8.1.4 Borrowing Base Certificates. On or before the 15th day
of each month from and after the date hereof, Borrowers shall deliver
to Agent, in form acceptable to Agent, a Borrowing Base Certificate as
of the last day of the immediately preceding month, with such
supporting materials as Agent shall reasonably request which shall
include, without limitation, a report of Eligible Inventory on a
category-by-category basis and a location-by-location basis. If
Borrowers deem it advisable, or if Agent or Majority Lenders so request
at any time that Availability (as determined by Agent in its reasonable
credit judgment) is less than $10,000,000, Borrowers shall execute and
deliver to Agent Borrowing Base Certificates more frequently than
monthly. Such Borrowing Base Certificates shall reflect all information
for each Borrower on a Consolidated and consolidating basis.
8.1.5 Landlord, Processor and Storage Agreements. Provide
Agent with copies of all agreements between any Borrower or any of its
Subsidiaries and any landlord, processor, distributor, warehouseman or
consignee which owns any premises at which any Collateral having a
value in excess of $250,000 may, from time to time, be kept.
8.1.6 Guarantor Financial Statements. Deliver or cause to be
delivered to Agent financial statements, if any, for each Guarantor (to
the extent not consolidated with the financial statements delivered to
Agent under subsection 8.1.3) in form and substance satisfactory to
Agent at such intervals and covering such time periods as Agent may
request.
8.1.7 Projections. No later than the last day of each fiscal
year of Borrowers, deliver to Agent (with Agent then promptly
furnishing the same to the Lenders) Projections of Parent, Borrowers
and Borrowers' Subsidiaries for the forthcoming fiscal year, on a
month-by-month basis and for the remaining portion of the Term, on a
year-by-year basis (provided, that a Default (but not an Event of
Default) arising solely due a breach of this subsection 8.1.7 shall not
be used as a basis by Agent or any Lender to refuse to honor a request
for a Loan hereunder that otherwise complies with the terms and
conditions hereof).
8.1.8 Subsidiaries. Cause each of its newly created domestic
Subsidiaries, promptly upon Agent's request therefor, to execute and
deliver to Agent a Guaranty Agreement and a security agreement pursuant
to which such domestic Subsidiary guaranties the payment of all
Obligations and grants to Agent a first priority Lien (subject only to
Permitted Liens) on all of its Properties (of the types, and subject to
the
45
exclusions, described in Section 5). Additionally, each Borrower and
Parent shall execute and deliver to Agent a Pledge Agreement pursuant
to which such Person grants to Agent a first priority Lien (subject
only to Permitted Liens) with respect to all of the issued and
outstanding Securities of each Subsidiary of such Person. In connection
with the foregoing documentation, Borrowers shall also cause Agent to
be provided with such legal opinions, certificates and corporate
authority materials that Agent may reasonably request.
8.1.9 Deposit and Brokerage Accounts. For each deposit account
(other than payroll and trust accounts) or brokerage account that any
Borrower at any time opens or maintains, such Borrower shall, pursuant
to an agreement in form and substance reasonably satisfactory to Agent,
cause the depository bank or securities intermediary, as applicable, to
agree to comply at any time that an Event of Default has occurred and
is continuing with instructions from Agent to such depository bank or
securities intermediary, as applicable, directing the disposition of
funds from time to time credited to such deposit or brokerage account
to the Dominion Account (with respect to accounts covered by subsection
6.2.4) or to such other accounts as Agent may direct, without further
consent of such Borrower.
8.1.10 Compliance with Plan of Reorganization. Each Borrower,
each of its Subsidiaries, Ultimate Parent and Parent shall consummate
the Plan of Reorganization in accordance with its respective terms.
8.1.11 Intercompany Loans. Upon request by Agent from time to
time, Borrowers shall provide Agent with written statements, with
reasonable detail, of the current balances of the Intercompany Loans.
At all times, Borrowers shall cause the Intercompany Loans to be
evidenced by revolving promissory notes, in form and substance
reasonably satisfactory to Agent, which notes are assigned to Agent as
security for the Obligations.
8.1.12 Updated Information. Promptly notify Agent in writing
of (a) each state or jurisdiction in which any Borrower or any
Subsidiary qualifies to do business after the date hereof, (b) the use
by any Borrower or any Subsidiary of a legal, fictitious or trade name
not listed on Exhibit 7.1.5 hereto, (c) any change after the date
hereof in the tax identification number of any Borrower or any of its
Subsidiaries, (d) any change after the date hereof in the list of
surety obligations listed on Exhibit 7.1.13, (e) on a quarterly basis,
the ownership by any Borrower or any Subsidiary of any registered
patent, registered trademark, registered service ▇▇▇▇, registered trade
name, registered copyright, material license or other similar material
rights not listed on Exhibit 7.1.16, (f) the assertion by any Person in
writing of a claim against any Borrower or any Subsidiary that its use
of its Intellectual Property or the conduct of its business does or may
infringe upon the Intellectual Property rights of any third party, (g)
any change after the date hereof in the list of capitalized and
operating personal property leases and real property leases of any
Borrower or any Subsidiary listed on Exhibit 7.1.22 hereto, (h) any
change after the date hereof in the list of Plans listed on Exhibit
7.1.23 hereto and (i) any change after the date hereof in the list of
collective bargaining agreements listed on Exhibit 7.1.25 hereto.
46
8.1.13 Equipment. Keep the Equipment of each Borrower and each
Subsidiary of a Borrower in good operating condition and repair,
reasonable wear and tear excepted; prevent any material Equipment of a
Borrower or a Subsidiary of a Borrower from becoming affixed to any
real Property leased to such Borrower or such Subsidiary such that an
interest arises therein under the real estate laws of the applicable
jurisdiction, unless the landlord of such real Property has executed a
landlord waiver or leasehold mortgage in favor of and in form
reasonably acceptable to Agent; and prevent any material Equipment of a
Borrower or a Subsidiary of a Borrower from becoming an accession to
any personal Property other than Equipment that is subject to first
priority (except for Permitted Liens) Liens in favor of Agent.
8.1.14 Utilization of Bank. With respect to its primary
collection and disbursement accounts, consider transferring such
accounts to Bank if such Borrower determines that it is commercially
reasonable to do so.
8.2 Negative Covenants.
During the Term, and thereafter for so long as there are any
Obligations (other than unasserted contingent indemnity obligations)
outstanding, Borrowers jointly and severally covenant that they shall not:
8.2.1 Mergers; Consolidations; Acquisitions; Structural
Changes. Merge or consolidate, or permit any of its Subsidiaries to
merge or consolidate, with any Person; nor change its or any of its
Subsidiaries' state of incorporation or organization, Type of
Organization or Organizational I.D. Number; nor change its or any of
its Subsidiaries' legal name; nor acquire, nor permit any of its
Subsidiaries to acquire, all or any substantial part of the Properties
of any Person, except for:
(i) mergers of any wholly-owned Subsidiary of a
Borrower into such Borrower or another wholly-owned Subsidiary
of such Borrower;
(ii) acquisitions of assets consisting of fixed
assets or real property that constitute Capital Expenditures
permitted under subsection 8.2.8;
(iii) liquidations or dissolutions of Subsidiary
Guarantors, so long as Agent has received prior written notice
of any such liquidation or dissolution and any assets of any
such Subsidiary Guarantor to be liquidated or dissolved have
been transferred to a Borrower or to another Subsidiary
Guarantor;
(iv) Permitted Acquisitions; and
(v) mergers and consolidations permitted under
subsection 8.2.9(iv)(B).
8.2.2 Loans. Make, or permit any of its Subsidiaries to make,
any loans or other advances of money to any Person, other than (i) for
salary, travel advances, entertainment, relocation, advances against
commissions and other similar advances to employees in the ordinary
course of business, (ii) extensions of trade credit in the
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, (▇▇▇) deposits with financial institutions
permitted under this Agreement, (iv) prepaid expenses, (v) extensions
of credit consisting of Investments not prohibited by subsection
8.2.12, (vi) non-cash loans made to managers to enable such managers to
acquire stock issued in connection with incentive plans and (vii) loans
by a Borrower to another Borrower or to any domestic wholly-owned
Subsidiary (other than any Inactive Subsidiary) of a Borrower
("Intercompany Loans").
8.2.3 Total Indebtedness. Create, incur, assume, or suffer to
exist, or permit any of its Subsidiaries to create, incur or suffer to
exist, any Indebtedness, except:
(i) Obligations owing to Agent or any Lender
under this Agreement or any of the other Loan Documents;
(ii) Indebtedness evidenced by the Subordinated
Bonds and the other Subordinated Bond Documents (each as in
effect as of the date hereof), so long as such Indebtedness
remains subordinated to the Obligations pursuant to the
subordination provisions included in Article XI of the
Subordinated Bond Indenture (as amended in accordance with the
terms of such Article XI);
(iii) Indebtedness evidenced by the Secured Bonds
and the other Secured Bond Documents (each as in effect as of
the date hereof subject to clause (xiii) below);
(iv) Indebtedness, including without limitation
Subordinated Debt and intercompany indebtedness, existing as
of the date of this Agreement and listed on Exhibit 8.2.3;
(v) Capitalized Lease Obligations and Permitted
Purchase Money Indebtedness not to exceed $7,500,000 in the
aggregate at any time outstanding;
(vi) contingent liabilities arising out of
endorsements of checks and other negotiable instruments for
deposit or collection in the ordinary course of business;
(vii) guaranties of any Indebtedness permitted
under this subsection 8.2.3;
(viii) Indebtedness in respect of Intercompany
Loans;
(ix) unsecured Derivative Obligations incurred in
the ordinary course of business in respect of the Loans
hereunder;
(x) unsecured Subordinated Debt not otherwise
permitted under this subsection 8.2.3 which does not exceed at
any time, in the aggregate, $5,000,000;
(xi) Indebtedness incurred in the ordinary course
of business with respect to surety and appeal bonds,
performance bonds and other similar obligations not to exceed
$2,000,000 in the aggregate at any time outstanding;
48
(xii) Indebtedness not included in paragraphs (i)
through (xi) above which does not exceed at any time, in the
aggregate, $2,000,000; and
(xiii) Subject to the limitations set forth in
subsection 8.2.6, refinancing of any Indebtedness permitted
under this subsection 8.2.3, so long as (a) such refinancing
Indebtedness has a maximum principal amount not in excess of
the sum of the principal amount of, and accrued interest in
respect of, the Indebtedness is secured only by Liens on
assets, if any, that secured the Indebtedness being
refinanced, (c) the average weighted average life to maturity
of the refinancing Indebtedness is not shorter than that of
the Indebtedness being refinanced, (d) the refinancing
Indebtedness has terms that are not more adverse in any
material respect to Agent, Lenders or the applicable Borrower
or Subsidiary of a Borrower than the Indebtedness being
refinanced (it being understood that the foregoing restriction
shall not prohibit refinancing Indebtedness from having (1) a
term that is longer, or that ends later, than the term of the
Indebtedness being refinanced or (2) a then current market
rate of interest that is not more than 200 basis points higher
than the interest rate applicable to the Indebtedness being
refinanced; provided, that a then current market rate of
interest that is more than 200 basis points higher than the
interest rate applicable to the Indebtedness being refinanced
shall also be permitted if, on a pro forma basis after giving
effect to such refinancing Indebtedness and the interest rate
applicable thereto, Borrowers would be in compliance with the
Fixed Charge Coverage Ratio as of the last day of the most
recently completed fiscal quarter)and (e) if such Indebtedness
being refinanced (it being understood that the foregoing
restriction shall not prohibit refinancing Indebtedness from
having (1) a term that is longer, or that ends later, than the
term of the Indebtedness being refinanced or (2) a then
current market rate of interest that is not more than 200
basis points higher than the interest rate applicable to the
Indebtedness being refinanced; provided, that a then current
market rate of interest that is more than 200 basis points
higher than the interest rate applicable to the Indebtedness
being refinanced shall also be permitted if, on a pro forma
basis after giving effect to such refinancing Indebtedness and
the interest rate applicable thereto, Borrowers would be in
compliance with the Fixed Charge Coverage Ratio as of the last
day of the most recently completed fiscal quarter)and (e) if
such Indebtedness being refinanced is Subordinated Debt, any
such refinancing Indebtedness includes subordination terms
that are at least as beneficial to Agent and Lenders as the
subordination terms associated with such Subordinated Debt
being refinanced.
8.2.4 Affiliate Transactions. Enter into, or be a party to, or
permit any of its Subsidiaries to enter into or be a party to, any
transaction with any Affiliate of any Borrower or any holder of any
Securities of any Borrower or any of its Subsidiaries, including
without limitation any management, consulting or similar fees, except
(i) in the ordinary course of and pursuant to the reasonable
requirements of such Borrower's or such Subsidiary's business and upon
fair and reasonable terms which are fully disclosed to Agent and are no
less favorable to such Borrower or such Subsidiary than would be
obtained in a comparable arms-length transaction with a Person not an
Affiliate or Security holder of such Borrower or such Subsidiary, as
determined and certified by the
49
applicable Borrower's or Subsidiary's board of directors in good faith
(provided, that with respect to any transaction involving aggregate
payments exceeding $20,000,000, except for any such transaction that
results in the repayment of the Obligations (other than unasserted
contingent indemnity obligations) in full, Agent shall have received an
opinion as to the fairness to the applicable Borrower or Subsidiary
from a financial point of view issued by a nationally recognized
independent financial advisor), (ii) employment agreements and other
incentive compensation with management shareholders approved from time
to time by the board of directors of such Borrower and employee
arrangements and related incentive compensation arrangements entered
into with other full time employees of such Borrower or such Subsidiary
in the ordinary course of business, (iii) reasonable directors' fees
and expenses approved from time to time by the board of directors of
such Borrower, (iv) with respect to Intercompany Loans, (v) with
respect to the Secured Bonds and the Subordinated Bonds, (vi)
non-exclusive intercompany licenses of Intellectual Property, (vii)
with respect to Indebtedness permitted hereunder that is provided by an
Affiliate, (viii) with respect to equity issued in compliance with the
terms hereof that is issued to an Affiliate and (ix) the agreements
listed on Exhibit 8.2.4.
8.2.5 Limitation on Liens. Create or suffer to exist, or
permit any of its Subsidiaries to create or suffer to exist, any Lien
upon any of its Property, income or profits, whether now owned or
hereafter acquired, except:
(i) Liens at any time granted in favor of Agent
for the benefit of Agent and Lenders;
(ii) Liens for taxes, assessments or governmental
charges (excluding any Lien imposed pursuant to any of the
provisions of ERISA, but including, without limitation, those
for non-delinquent taxes or assessments in respect of real
Property) not yet due, or being contested in the manner
described in subsection 7.1.14 hereto;
(iii) Liens arising in the ordinary course of the
business of such Borrower or any of its Subsidiaries by
operation of law or regulation (including, without limitation,
mechanic's liens, materialmen's liens, warehousemen's liens
and the like) but only if (a) payment in respect of any such
Lien is not at the time required or is being contested in good
faith by appropriate proceedings (with appropriate reserves
established in respect thereof in accordance with GAAP) and
(b) such Liens do not, in the aggregate, materially detract
from the value of the Property of such Borrower or any of its
Subsidiaries or materially impair the use thereof in the
operation of the business of such Borrower or any of its
Subsidiaries;
(iv) Purchase Money Liens securing Permitted
Purchase Money Indebtedness and Liens securing Capitalized
Lease Obligations permitted to be incurred under subsection
8.2.3 so long as such Liens are confined to the assets that
are the subject of such Capitalized Lease Obligations;
(v) such other Liens as appear on Exhibit 8.2.5
hereto;
50
(vi) Liens incurred or deposits or pledges made
in the ordinary course of business in connection with (1)
worker's compensation, social security, unemployment insurance
and other like laws or (2) sales contracts, leases, statutory
obligations, work in progress advances and other similar
obligations not incurred in connection with the borrowing of
money or the payment of the deferred purchase price of
property;
(vii) reservations, easements, covenants, zoning
and other land use regulations, title exceptions or
encumbrances that are granted in the ordinary course of
business or shown on surveys or inspections that have been
required by, delivered to and accepted by Agent (or, if not
required by Agent, that would be disclosed by an accurate
surveyor inspection), affecting real Property owned or leased
by a Borrower or any of its Subsidiaries; provided that such
exceptions do not or would not in the aggregate materially
interfere with the use of such Property in the ordinary course
of such Borrower's or such Subsidiary's business;
(viii) judgment Liens that do not give rise to an
Event of Default under subsection 10.1.15;
(ix) Liens created under the Secured Bond
Documents on the Collateral and on the Securities of Neenah
and the Subsidiaries of Neenah, so long as such Liens remain
subordinated to the Liens securing the Obligations pursuant to
the terms of the Secured Bond Lien Subordination Agreement;
(x) Liens in favor of customs and revenues
authorities which secure payment of customs duties in
connection with the importation of Inventory;
(xi) Liens on insurance policies and the proceeds
thereof securing the financing of the premiums with respect
thereto;
(xii) Liens consisting of rights of set-off of a
customary nature or banker's liens on amounts on deposit in
accounts of such Borrower or any of its Subsidiaries (other
than in a Dominion Account), whether arising by contract or
operation of law, incurred in the ordinary course of business;
(xiii) Liens on fixed assets acquired in compliance
with the terms of this Agreement to the extent that such Liens
existed prior to such acquisition;
(xiv) Liens incurred or deposits made to secure
the performance of bids, tenders, leases, trade contracts
(other than Indebtedness), public or statutory obligations,
surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course
of business;
(xv) Leases or subleases and licenses and
sublicenses granted to others in the ordinary course of such
Borrower's or such Subsidiary's business which do not
interfere in any material respect with the business of such
Borrower or such Subsidiary, and any interest or title of a
lessor, licensor, sublessor or sublicensor under a lease or
license;
51
(xvi) Liens arising from the filing of UCC
financing statements for precautionary purposes relating
solely to operating leases under which such Borrower or any of
its Subsidiaries is a lessee; and
(xvii) such other Liens as Majority Lenders may
hereafter approve in writing.
8.2.6 Payments and Amendments of Certain Debt.
(i) make or permit any of its Subsidiaries to
make any payment of any part or all of the Subordinated Debt
evidenced by the Subordinated Bonds and the other Subordinated
Bond Documents (including, without limitation, any mandatory
or voluntary prepayment, purchase or redemption), except (a)
payments of Deferrable Interest that are satisfied by
deferring the amount thereof until the maturity date of the
Subordinated Bonds, (b) regularly scheduled cash payments of
interest pursuant to the Subordinated Bond Documents (each as
in effect as of the date hereof) at a rate of 5% per annum and
the regularly scheduled payment of principal on the maturity
date of the Subordinated Bonds, so long as any such payment of
interest is made in accordance with the subordination terms
included in Article XI of the Subordinated Bond Indenture, (c)
cash payments of Deferrable Interest on each "Interest Payment
Date" under and as defined in the Subordinated Bond Indenture
(as in effect as of the date hereof) accrued for the six month
period ended thereon (or, in the case of the payment scheduled
for January 1, 2004, accrued for the period beginning on the
Closing Date and ending on January 1, 2004) pursuant to the
Subordinated Bond Documents (each as in effect as of the date
hereof), so long as both immediately prior to and after giving
effect to any such payment of Deferrable Interest, (1) no
Event of Default exists, (2) average Availability (as
determined by Agent in its reasonable credit judgment) for the
thirty (30) day period ending on the date of any such payment
(giving effect to such payment of Deferrable Interest for each
day in such thirty (30) day period) is not less than
$17,500,000 and (3) actual Availability (as determined by
Agent in its reasonable credit judgment) on the date of any
such payment is not less than $17,500,000 and (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 $15,000,000 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
52
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;
(ii) fail to defer until the maturity date of the
Subordinated Bonds any Deferrable Interest (other than current
payments of Deferrable Interest that are permitted to be made
in cash under sub-clause (c) or sub-clause (d) of the
foregoing clause (i) of this subsection 8.2.6);
(iii) make or permit any of its Subsidiaries to
make any payment of any part or all of the Indebtedness
evidenced by the Secured Bonds and the other Secured Bond
Documents (including, without limitation, any mandatory or
voluntary prepayment, purchase or redemption), except
regularly scheduled cash payments of interest pursuant to the
Secured Bond Documents (each as in effect as of the date
hereof) at a rate of 11% per annum and the regularly scheduled
payment of principal on the maturity date of the Secured
Bonds;
(iv) with respect to any Subordinated Debt other
than that evidenced by the Subordinated Bonds and the other
Subordinated Bond Documents, make or permit any of its
Subsidiaries to make any payment of any part or all of any
Subordinated Debt or take any other action or omit to take any
other action in respect of any Subordinated Debt, except in
accordance with the subordination agreement relative thereto
or the subordination provisions thereof; or
(v) amend or modify any Secured Bond Document or
amend or modify any Subordinated Bond Document or any
agreement, instrument or document evidencing or relating to
any other Subordinated Debt, in each case to the extent that
any such amendment or modification would (a) increase the
interest rate on such Indebtedness or the principal amount of
such Indebtedness; provided, that satisfying payments of
Deferrable Interest by deferring the amount thereof until the
maturity date of the Subordinated Bonds shall not be
considered an increase in the principal amount of the
Indebtedness under the Subordinated Bond Documents for this
purpose; (b) move forward the dates upon which any payments of
principal or interest on such Indebtedness are due; (c) add
any event of default or make more restrictive any existing
event of default with respect to such Indebtedness; (d) add or
make more restrictive any covenant with respect to such
Indebtedness; (e) move forward any redemption or prepayment
dates with respect to such Indebtedness or increase any
redemption or prepayment amounts; (f) change the subordination
provisions applicable to such Indebtedness; (g) change or
amend any other term if such change or amendment would
materially increase the obligations of the obligor or confer
additional material rights on the holder of such Indebtedness
in a manner adverse to any Borrower or Lenders; or (h) require
to be paid in cash any Deferrable Interest (other than on the
maturity date of the Subordinated Bonds) or any interest which
may be paid in kind instead of cash.
53
8.2.7 Distributions. Declare or make, or permit any of its
Subsidiaries to declare or make, any Distributions, except for:
(i) Distributions by any Subsidiary of a
Borrower (including any such Subsidiary that is a Borrower) to
such Borrower;
(ii) Distributions paid solely in Securities of a
Borrower or any of its Subsidiaries;
(iii) Distributions by each Borrower in amounts
necessary to permit such Borrower to repurchase Securities of
such Borrower from employees of such Borrower or any of its
Subsidiaries upon the termination of their employment, so long
as no Default or Event of Default exists at the time of or
would be caused by the making of such Distributions and the
aggregate cash amount of all such Distributions by all
Borrowers, measured at the time when made, does not exceed
$250,000 in any fiscal year of Borrowers;
(iv) Distributions by each Borrower in an amount
sufficient to permit Ultimate Parent to pay its consolidated
combined unitary U.S. federal, state or local tax liabilities
relating to the business of Borrowers and Borrowers'
Subsidiaries; provided that Ultimate Parent applies the amount
of such Distributions for such purpose at such time; and
(v) Distributions by Borrowers to the extent
necessary to permit Parent and Ultimate Parent to (a) pay
administrative costs and expenses related to the business of
Borrowers and Borrowers' Subsidiaries, (b) make payments in
respect of its indemnification obligations owing to directors
and officers and (c) make payments in respect of
indemnification obligations and cost and expenses incurred by
Ultimate Parent in connection with any offering of common
stock of Ultimate Parent, in all cases not to exceed $350,000
in the aggregate in any fiscal year of Borrowers, so long as
Parent or Ultimate Parent, as applicable, applies the amount
of such Distributions for such purposes.
8.2.8 Capital Expenditures. Make Capital Expenditures
(including, without limitation, by way of capitalized leases, but
excluding (i) MACT Capital Expenditures, (ii) Capital Expenditures made
using the proceeds of equity securities issued in compliance with the
terms hereof and (iii) the principal portion of Capitalized Lease
Obligations incurred in compliance with the terms hereof) which, in the
aggregate, as to all Borrowers and all of Borrowers' Subsidiaries,
exceed $25,000,000 during the fiscal year of Borrowers ending on
September 30, 2004 or $20,000,000 during any fiscal year of Borrowers
thereafter, except that 75% of the unused portion of the Capital
Expenditure allowance for any fiscal year may be carried over to the
immediately succeeding fiscal year only, to be used in such succeeding
fiscal year after all of the Capital Expenditure allowance for that
year has been used.
8.2.9 Disposition of Assets. Sell, lease or otherwise dispose
of any of, or permit any of its Subsidiaries to sell, lease or
otherwise dispose of any of, its Properties,
54
including any disposition of Property as part of a sale and leaseback
transaction, to or in favor of any Person, except for:
(i) sales of Inventory and collections of
Accounts in the ordinary course of business;
(ii) transfers of Property to a Borrower by
another Borrower or by a wholly-owned Subsidiary of such
Borrower;
(iii) dispositions of investments described in
paragraphs (iv), (v), (vi) and (vii) of the definition of the
term "Restricted Investments";
(iv) (A) sales, leases, transfers and other
dispositions of Non-Core Fixed Assets, (B) the merger or
consolidation of any Inactive Subsidiary or any Person that
does not own any assets other than Non-Core Fixed Assets with
any other Person that is a Borrower or a Subsidiary Guarantor
(provided that such other Person that is a Borrower or
Subsidiary Guarantor is the Person surviving such merger or
consolidation) and (C) the liquidation, dissolution or winding
up of any Inactive Subsidiary;
(v) sales, leases and other dispositions of
Property with a fair market value of up to $2,500,000 in the
aggregate in any fiscal year, in each case so long as (a) no
Event of Default is in existence or would result therefrom and
(b) the consideration received in respect thereof is all cash
and is equal to the fair market value thereof;
(vi) so long as no Event of Default exists,
sales, leases or other dispositions of Equipment or other
fixed assets that are worn, excess, damaged or obsolete or
consist of scrap and that (other than in the case of scrap)
are replaced with Equipment or other fixed assets that are
usable in the ordinary course of business of the applicable
Borrower or Subsidiary of a Borrower; and
(vii) licenses of Intellectual Property in the
ordinary course of business.
8.2.10 Securities of Subsidiaries. Permit any of its
Subsidiaries to issue any additional Securities except to such Borrower
and except for director's qualifying Securities.
8.2.11 ▇▇▇▇-and-Hold Sales, Etc. Except for sales to customers
in the ordinary course of Borrowers' business consistent with past
practice, make, or permit any of its Subsidiaries to make, a sale to
any customer on a ▇▇▇▇-and-hold, guaranteed sale, sale and return, sale
on approval, repurchase or return or consignment basis.
8.2.12 Restricted Investment. Make or have, or permit any of
its Subsidiaries of such Borrower to make or have, any Restricted
Investment.
8.2.13 Subsidiaries and Joint Ventures. Create, acquire or
otherwise suffer to exist, or permit any Subsidiary of such Borrower to
create, acquire or otherwise suffer to
55
exist, any Subsidiary or joint venture arrangement not in existence as
of the date hereof, except in connection with a Permitted Acquisition.
8.2.14 Tax Consolidation. File or consent to the filing of any
consolidated income tax return with any Person other than Ultimate
Parent, Parent, Borrowers and Borrowers' Subsidiaries.
8.2.15 Organizational Documents. Agree to, or suffer to occur,
any amendment, supplement or addition to its or any of its
Subsidiaries' charter, articles or certificate of incorporation,
certificate of formation, limited partnership agreement, bylaws,
limited liability agreement, operating agreement or other
organizational documents (as the case may be), that would reasonably be
expected to have a Material Adverse Effect.
8.2.16 Fiscal Year End. Change, or permit any of its
Subsidiaries, Ultimate Parent or Parent to change, its fiscal year end.
8.2.17 Negative Pledges. Enter into any agreement (other than
the Loan Documents, the Secured Bond Documents and the Subordinated
Bond Documents) limiting the ability of such Borrower or any of its
Subsidiaries to (i) voluntarily create Liens upon any of its Property,
(ii) pay dividends or make any other Distributions on its Securities;
(iii) make loans or advances to any Borrower or any Subsidiary; (iv)
pay any Indebtedness owed to any Borrower or any Subsidiary of a
Borrower; or ( v) transfer any of its Property to any Borrower or any
Subsidiary.
8.2.18 Plan of Reorganization. Agree to, or suffer to occur,
any amendment, supplement or addition to, or any other modification of,
the Plan of Reorganization or the Confirmation Order, unless otherwise
agreed to by Agent in writing.
8.2.19 Leases. Become, or permit any of its Subsidiaries to
become, a lessee under any operating lease (other than a lease under
which such Borrower or such Subsidiary is lessor) of Property if the
aggregate Rentals payable during any current or future period of twelve
(12) consecutive months under the lease in question and an other leases
under which any Borrowers or any of its Subsidiaries is then lessee
would exceed $3,000,000. The term "Rentals" means, as of the date of
determination, all payments which the lessee is required to make by the
terms of any lease.
8.2.20 Business Activity. Permit Ultimate Parent, Parent or
any Inactive Subsidiary to engage in any business activity or incur any
Indebtedness other than the ownership of the equity interests of Parent
(in the case of Ultimate Parent) and Neenah (in the case of Parent),
having an interest in the ▇▇▇▇▇▇▇ Parcel (in the case of ▇▇▇▇▇▇▇), the
performance of such Person's obligations under the Loan Documents to
which it is a party (in the case of Parent and the Inactive
Subsidiaries), the performance of the Obligations, the performance of
the Indebtedness evidenced by the Secured Bonds and the Subordinated
Bonds, the guaranty of Indebtedness incurred by a Borrower or an active
Subsidiary in compliance with the terms hereof and the performance of
its obligations under intercompany agreements and agreements with its
shareholders that are permitted hereunder and have been disclosed to
Agent in writing (with Agent disclosing
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to Lenders any such agreements that are disclosed to Agent in writing
and, if requested by a Lender, providing to such Lender copies of any
documents evidencing any such agreements that have been furnished to
Agent).
8.3 Specific Financial Covenants.
During the Term, and thereafter for so long as there are any
Obligations (other than unasserted contingent indemnity obligations)
outstanding, each Borrower covenants that it shall comply with all of the
financial covenants set forth in Exhibit 8.3 hereto. If GAAP changes from the
basis used in preparing the audited financial statements delivered to Agent by
Borrowers on or before the Closing Date, Borrowers will provide Agent with
certificates demonstrating compliance with such financial covenants and will
include, at the election of Borrowers or upon the request of Agent, calculations
setting forth the adjustments necessary to establish Borrowers' compliance with
such financial covenants based upon GAAP as in effect on the Closing Date.
SECTION 9. CONDITIONS PRECEDENT
9.1 Conditions Precedent to Initial Loans and Other Initial
Credit Accommodations.
Notwithstanding any other provision of this Agreement or any
of the other Loan Documents, and without affecting in any manner the rights of
Agent or any Lender under the other sections of this Agreement, no Lender shall
be required to make any Loan on the Closing Date, nor shall Agent or any Letter
of Credit Issuer be required to or issue or procure any Letter of Credit or LC
Guaranty on the Closing Date unless and until each of the following conditions
has been and continues to be satisfied:
9.1.1 Documentation. Agent and the Lenders shall have
received, in form and substance satisfactory to Agent and its counsel
and the Lenders, a duly executed copy of this Agreement and the other
Loan Documents, together with such additional documents, instruments,
opinions and certificates as Agent and its counsel shall reasonably
require in connection therewith from time to time (including, without
limitation, the Secured Bond Documents, the Subordinated Bond
Documents, the Plan of Reorganization, the Disclosure Statement, the
Confirmation Order and the lockbox and blocked account documentation to
be executed on the Closing Date in connection with the requirements of
subsection 6.2.4), all in form and substance satisfactory to Agent and
its counsel and the Lenders.
9.1.2 No Default. No Default or Event of Default shall exist.
9.1.3 Availability. Agent shall have determined in its
reasonable credit judgment that immediately after Lenders have made the
initial Loans and after Agent (or Letter of Credit Issuer, as
applicable) has issued or procured the initial Letters of Credit and LC
Guaranties contemplated hereby, and Borrowers have paid (or, if
accrued, treated as paid), all closing costs incurred in connection
with the transactions contemplated hereby (including, without
limitation, the issuance of the Secured Bonds and the Subordinated
Bonds), and have reserved an amount sufficient to pay all trade
payables
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greater than 60 days past due, Availability shall not be less than
$20,000,000 (or such lesser amount of not less than $17,500,000 that
Agent in its sole discretion may approve).
9.1.4 No Litigation. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any court, governmental agency or legislative body to
enjoin, restrain or prohibit, or to obtain damages in respect of, or
which is materially adversely related to or arises out of this
Agreement, the Secured Bond Documents, the Subordinated Bond Documents
or the Plan of Reorganization or the consummation of the transactions
contemplated hereby or thereby.
9.1.5 Secured Bonds. Neenah shall have received not less than
$110,000,000 in net cash proceeds from the issuance of the Secured
Bonds in accordance with the terms of the Secured Bond Documents and in
compliance with the Plan of Reorganization and all applicable laws; the
net cash proceeds from such issuance of the Secured Bonds shall have
been used by Neenah to satisfy certain existing Indebtedness of
Borrowers, as more particularly set forth in the Plan Of
Reorganization; and a Secured Bond Lien Subordination Agreement
applicable to the Liens created under the Secured Bond Documents shall
have been executed and delivered by the Secured Bond Trustee in favor
of Agent (for its benefit and the benefit of Lenders).
9.1.6 Subordinated Bonds. Neenah shall have issued the
Subordinated Bonds in accordance with the terms of the Subordinated
Bond Documents and in compliance with the Plan of Reorganization and
all applicable laws.
9.1.7 Confirmation Order; Plan of Reorganization. Agent shall
have received the final Confirmation Order confirming the Plan or
Reorganization; such final Confirmation Order shall be in form and
substance satisfactory to Agent and its counsel; the Confirmation shall
have occurred; and the Plan of Reorganization shall have become
effective in accordance with its terms.
9.1.8 Material Adverse Effect. As of the Closing Date, since
July 31,2003, there has not been any material adverse change in the
business, assets or financial condition of Borrowers (taken as a
whole), it being understood that (i) the bankruptcy filing of the
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, (▇▇) the public announcement of such filing or the
transactions contemplated thereby and (iii) changes or events affecting
general economic conditions, but not otherwise materially and adversely
affecting the business, assets or financial condition of Borrowers' and
Borrowers' Subsidiaries, shall not be considered material adverse
changes for purposes of the foregoing.
9.1.9 Audits, Appraisals and Environmental Reports. All of the
appraisals and audits of the real and personal Property and business of
Borrowers being conducted by Agent (or a third party designated by
Agent) prior to the Closing Date, and all of the Phase I environmental
assessments of the real Property of Borrowers being conducted by Agent
(or a third party designated by Agent) prior to the Closing Date, shall
have been completed to Agent's reasonable satisfaction.
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9.2 Conditions Precedent to all Loans and other Credit
Accommodations.
Notwithstanding any other provision of this Agreement or any
other Loan Documents, and without affecting in any manner the rights of any
Agent or any Lender under the other sections of this Agreement, no Lender shall
be required to make any Loan, nor shall Agent or any Letter of Credit Issuer be
required to issue or procure any Letter of Credit or LC Guaranty unless and
until each of the following conditions has been and continues to be satisfied:
9.2.1 No Default. No Default or Event of Default shall exist;
provided, that if Borrowers have disclosed to Agent, any Letter of
Credit Issuers and Lenders the existence of a Default or an Event of
Default in accordance with subsection 8.1.2, (i) each Lender shall
continue to make Revolving Credit Loans until such Lender has delivered
the written notice described in subsection 10.2.2 in respect of such
Default or Event of Default, which notice pursuant to subsection 10.2.2
may be given at any time prior to the deadline for honoring a request
for a Revolving Credit Loan and (ii) each Letter of Credit Issuer and
Agent, as applicable, shall continue to issue and procure Letters of
Credit and LC Guaranties until such Person has delivered the written
notice described in subsection 10.2.2 in respect of such Default or
Event of Default, which notice pursuant to subsection 10.2.2 may be
given at any time prior to the deadline for honoring a request for a
Letter of Credit or LC Guaranty.
9.2.2 No Litigation. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any governmental agency or legislative body to enjoin,
restrain or prohibit, or to obtain damages in respect of, or which is
materially adversely related to or arises out of, any of the Loan
Documents.
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
10.1 Events of Default. The occurrence of one or more of the
following events shall constitute an "Event of Default":
10.1.1 Payment of Obligations. Borrowers shall (i) fail to pay
any of the Obligations hereunder (other than the Obligations described
in the following clause (ii)) or under any Note on the due date thereof
(whether due at stated maturity, on demand, upon acceleration or
otherwise) or (ii) fail to pay any audit fees required to be paid by
Borrowers pursuant to Section 2.7 or satisfy any expenses required to
be satisfied by Borrowers pursuant to subsection 2.8 within five days
following receipt by Borrowers of written notice of such failure.
10.1.2 Misrepresentations. Any representation, warranty or
other statement made or furnished to Agent or any Lender by or on
behalf of any Borrower, any of its Subsidiaries or any Guarantor in
this Agreement, any of the other Loan Documents or any instrument,
certificate or financial statement furnished in compliance with or in
reference thereto proves to have been false or misleading in any
material respect when made, furnished or reaffirmed pursuant to Section
7.2 hereof; provided, that no breach of
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a representation or warranty occurring solely in respect of an Inactive
Subsidiary (other than a breach of the representation and warranty
contained in subsection 7.1.27) shall result in an Event of Default
unless such event would reasonably be expected to have a Material
Adverse Effect.
10.1.3 Breach of Specific Covenants. Borrowers shall fail or
neglect to perform, keep or observe any covenant contained in Section
or subsection 6.2.4, 6.2.5, 8.1.1, 8.1.2, 8.1.3(vi), 8.1.4 (at a time
when Borrowing Base Certificates are required to be delivered more
frequently than monthly), 8.1.10, 8.2 (other than subsection 8.2.20) or
8.3 hereof on the date that Borrowers are required to perform, keep or
observe such covenant, shall fail or neglect to perform, keep or
observe any covenant contained in Section 8.1.4 hereof (at a time when
Borrowing Base Certificates are required to be delivered on a monthly
basis) within 1 Business Day following the date on which Borrowers are
required to perform, keep or observe such covenant, or shall fail or
neglect to perform, keep or observe any covenant contained in
subsection 8.1.3(ii) or 8.1.3(iv) hereof within 5 days following the
date on which Borrowers are required to perform, keep or observe such
covenant.
10.1.4 Breach of Other Covenants. Borrowers shall fail or
neglect to perform, keep or observe any covenant contained in this
Agreement (other than a covenant which is dealt with specifically
elsewhere in Section 10.1 hereof) and the breach of such other covenant
is not cured to Agent's reasonable satisfaction within 30 days after
the sooner to occur of Borrowers' receipt of notice of such breach from
Agent or the date on which such failure or neglect first becomes known
to any officer of any Borrower.
10.1.5 Default Under Security Documents or Other Agreements.
Any event of default shall occur under, or any Borrower, any of its
Subsidiaries or any Guarantor shall default in the performance or
observance of any term, covenant, condition or agreement applicable to
such Person contained in, any of the Security Documents or the Other
Agreements (excluding any representations and warranties set forth in
such Security Documents and Other Agreements) and such default shall
continue, after the sooner to occur of such Person's receipt of notice
of such default from Agent or the date on which such default first
becomes known to any officer of such Person, beyond any applicable
grace period; provided, that no event covered by this subsection 10.1.5
and occurring solely in respect of an Inactive Subsidiary shall result
in an Event of Default unless such event would reasonably be expected
to have a Material Adverse Effect.
10.1.6 Other Defaults. There shall occur any event of default
on the part of any Borrower, any of its Subsidiaries or any Guarantor
under any agreement, document or instrument to which such Borrower,
such Subsidiary or such Guarantor is a party or by which such Borrower,
such Subsidiary or such Guarantor or any of its Property is bound,
evidencing or relating to any Indebtedness (other than the Obligations)
with an outstanding principal balance in excess of $1,000,000, if the
payment or maturity of such Indebtedness is or could be accelerated in
consequence of such event of default or demand for payment of such
Indebtedness is made or could be made in accordance with the terms
thereof; or there shall occur any event which permits the holders of
the Indebtedness under any such agreement, document or instrument to
require the repurchase or redemption of such Indebtedness.
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10.1.7 Uninsured Losses. Any material loss, theft, damage or
destruction of any portion of the Collateral having a fair market value
of $2,000,000, in the aggregate, if not fully covered (subject to such
deductibles and self-insurance retentions as Agent shall have
permitted) by insurance.
10.1.8 Insolvency and Related Proceedings. Ultimate Parent,
Parent, any Borrower, any of its Subsidiaries or any Guarantor shall
cease to be Solvent or shall suffer the appointment of a receiver,
trustee, custodian or similar fiduciary, or shall make an assignment
for the benefit of creditors, or any petition for an order for relief
shall be filed by or against Parent, any Borrower, any of its
Subsidiaries or any Guarantor under U.S. federal bankruptcy laws (if
against Parent, any Borrower, any of its Subsidiaries or any Guarantor
the continuation of such proceeding for more than 60 days), or Parent,
any Borrower, any of its Subsidiaries or any Guarantor shall make any
offer of settlement, extension or composition to their respective
unsecured creditors generally; provided, that no event covered by this
subsection 10.1.8 and occurring solely in respect of an Inactive
Subsidiary shall result in an Event of Default unless such event would
reasonably be expected to have a Material Adverse Effect.
10.1.9 Business Disruption; Condemnation. There shall occur a
cessation of a substantial part of the business of Borrowers and their
Subsidiaries (taken as a whole) for a period which materially adversely
affects the capacity of Borrowers and their Subsidiaries to continue
their business on a profitable basis; or any Borrower, any of its
Subsidiaries or any Guarantor shall suffer the loss or revocation of
any material license or permit now held or hereafter acquired by such
Borrower, such Subsidiary or such Guarantor which is necessary to the
continued or lawful operation of a material portion of the business of
Borrowers and their Subsidiaries (taken as a whole); or any Borrower,
any of its Subsidiaries or any Guarantor shall be enjoined, restrained
or in any way prevented by court, governmental or administrative order
from conducting all or any material part of the business affairs of
Borrowers and their Subsidiaries (taken as a whole); or any material
lease or agreement pursuant to which any Borrower, any of its
Subsidiaries or any Guarantor leases, uses or occupies any Property
shall be canceled or terminated prior to the expiration of its stated
term, except any such lease or agreement the cancellation or
termination of which could not reasonably be expected to have a
Material Adverse Effect; or any material portion of the Collateral
shall be taken through condemnation or the value of such Property shall
be materially impaired through condemnation, except for any such
condemnation that would not reasonably be expected to have a Material
Adverse Effect.
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
61
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; or (g) any "Change of Control"
under and as defined in the Subordinated Bond Indenture shall occur.
10.1.11 ERISA. A Reportable Event shall occur which
constitutes grounds for the termination by the Pension Benefit Guaranty
Corporation of any Plan or for the appointment by the appropriate
United States district court of a trustee for any Plan under Section
4042 of ERISA, or if any Plan shall be terminated or any such trustee
shall be requested or appointed, or any Borrower or any of its
Subsidiaries is in "default" (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan resulting from
such Borrower's or such Subsidiary's complete or partial withdrawal
from such Plan and any such event could reasonably be expected to have
a Material Adverse Effect.
10.1.12 Challenge to Agreement. Parent, any Borrower, any
Subsidiary of any Borrower (other than an Inactive Subsidiary) or any
Guarantor (other than an Inactive Subsidiary), or any Affiliate of any
of them, shall challenge or contest in any action, suit or proceeding
the validity or enforceability of this Agreement or any of the other
Loan Documents, the legality or enforceability of any of the
Obligations or the perfection or priority of any Lien granted to Agent.
10.1.13 Repudiation of or Default Under Guaranty Agreement.
Any Guarantor (other than an Inactive Subsidiary) shall revoke or
attempt to revoke the Guaranty Agreement signed by such Guarantor, or
shall repudiate such Guarantor's liability thereunder or shall be in
default under the terms thereof.
10.1.14 Criminal Forfeiture. Any Borrower or any of its
Subsidiaries shall be criminally indicted or convicted under any law
that could lead to a forfeiture of any Property of such Borrower or
such Subsidiary, except for any Property the forfeiture of which would
not reasonably be expected to have a Material Adverse Effect.
10.1.15 Judgments. Any money judgments, writ of attachment or
similar processes (collectively, "Judgments") are issued or rendered
against any Borrower, any of its Subsidiaries or any Guarantor, or any
of their respective Property (i) in the case of money judgments, in an
amount of $1,000,000 or more for any single judgment, attachment or
process or $2,000,000 or more for all such judgments, attachments or
processes in the aggregate, in each case in excess of any applicable
insurance (or indemnity from a creditworthy source that is reasonably
acceptable to Agent) with respect to which the insurer (or the
indemnifying party, if applicable) has admitted liability, and (ii) in
the case of non-monetary Judgments, such Judgment or Judgments (in the
aggregate) could reasonably be expected to have a Material Adverse
Effect, in each case which Judgment is not stayed, released or
discharged within 60 days; provided, that no event covered by this
subsection 10.1.15 and occurring solely in respect of an Inactive
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Subsidiary shall result in an Event of Default unless such event would
reasonably be expected to have a Material Adverse Effect.
10.2 Acceleration of the Obligations.
10.2.1 Upon or at any time after the occurrence and during the
continuance of an Event of Default, (i) the Revolving Loan Commitments
shall, at the option of Agent or Majority Lenders be terminated and/or
(ii) Agent or Majority Lenders may declare all or any portion of the
Obligations at once due and payable without presentment, demand protest
or further notice by Agent or any Lender, and Borrowers shall forthwith
pay to Agent, the full amount of such Obligations, provided, that upon
the occurrence of an Event of Default specified in subsection 10.1.8
hereof, the Revolving Loan Commitments shall automatically be
terminated and all of the Obligations shall become automatically due
and payable, in each case without declaration, notice or demand by
Agent or any Lender.
10.2.2 If a Default or Event of Default has occurred and is
continuing, a Lender (in the case of Revolving Credit Loans) or Agent
or a Letter of Credit Issuer (in the case of Letters of Credit and LC
Guaranties) may, with written notice to Borrowers and Agent, suspend
for so long as such Default or Event of Default is continuing, its
Revolving Loan Commitment with respect to additional Revolving Credit
Loans and/or the issuance of additional Letters of Credit and the
execution of additional LC Guaranties, as applicable, whereupon any
additional Revolving Credit Loans or Letters of Credit or LC
Guaranties, as applicable, From such Person shall be made, issued or
executed in such Person's sole discretion. Agent shall provide Lenders
with prompt notice of having received a written notice from a Lender of
the type provided for under this subsection 10.2.2.
10.3 Other Remedies.
Upon the occurrence and during the continuance of an Event of
Default, Agent shall have and may exercise from time to time the following other
rights and remedies:
10.3.1 All of the rights and remedies of a secured party under
the UCC or under other applicable law, and all other legal and
equitable rights to which Agent or Lenders may be entitled, all of
which rights and remedies shall be cumulative and shall be in addition
to any other rights or remedies contained in this Agreement or any of
the other Loan Documents, and none of which shall be exclusive.
10.3.2 The right to take immediate possession of the
Collateral, and to (i) require each Borrower and each of its
Subsidiaries to assemble the Collateral, at Borrower's joint and
several expense, and make it available to Agent at a place designated
by Agent which is reasonably convenient to both parties, and (ii) enter
any premises where any of the Collateral shall be located and to keep
and store the Collateral on said premises until sold (and if said
premises be the Property of any Borrower or any of its Subsidiaries,
such Borrower agrees not to charge, or permit such Subsidiary to
charge, Agent for storage thereof).
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10.3.3 The right to sell or otherwise dispose of all or any
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such
notice as may be required by law, in lots or in bulk, for cash or on
credit, all as Agent, in its sole discretion, may deem advisable. Agent
may, at Agent's option, disclaim any and all warranties regarding the
Collateral in connection with any such sale. Each Borrower agrees that
10 days' written notice to such Borrower or any of its Subsidiaries of
any public or private sale or other disposition of Collateral shall be
reasonable notice thereof, and such sale shall be at such locations as
Agent may designate in said notice. Agent shall have the right to
conduct such sales on any Borrower's or any of its Subsidiaries'
premises, without charge therefor, and such sales may be adjourned from
time to time in accordance with applicable law. Agent shall have the
right to sell, lease or otherwise dispose of the Collateral, or any
part thereof, for cash, credit or any combination thereof, and Agent,
on behalf of Lenders, may purchase all or any part of the Collateral at
public or, if permitted by law, private sale and, in lieu of actual
payment of such purchase price, may set off the amount of such price
against the Obligations. The proceeds realized from the sale of any
Collateral shall be applied in the manner provided for in subsection
3.4.2. If any deficiency shall arise, each Borrower and each Guarantor
shall remain jointly and severally liable to Agent and Lenders
therefore. Any surplus shall be remitted to whomsoever shall be legally
entitled to the same.
10.3.4 Agent is hereby granted a non-exclusive license or
other right to use, without charge, effective upon the occurrence and
continuance of an Event of Default, each Borrower's and each of its
Subsidiaries' labels, patents, copyrights, licenses, rights of use of
any name, trade secrets, tradenames, trademarks and advertising matter,
or any Property of a similar nature, as it pertains to the Collateral,
in completing, advertising for sale and selling any Collateral and each
Borrower's and each of its Subsidiaries' rights under all licenses and
all franchise agreements shall inure to Agent's benefit.
10.3.5 Agent may, at its option, require Borrowers to deposit
with Agent funds equal to 105% of the LC Amount and, if Borrowers fail
to promptly make such deposit, Agent may advance such amount as a
Revolving Credit Loan (whether or not an Overadvance is created
thereby). Each such Revolving Credit Loan shall be secured by all of
the Collateral and shall constitute a Base Rate Portion. Any such
deposit or advance shall be held by Agent as a reserve to fund future
payments on such LC Guaranties and future drawings against such Letters
of Credit. At such time as all LC Guaranties have been paid or
terminated and all Letters of Credit have been drawn upon or expired,
any amounts remaining in such reserve shall be applied against any
outstanding Obligations, or, if all Obligations have been indefeasibly
paid in full, returned to Borrowers.
10.4 Set Off and Sharing of Payments.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, during the
continuance of any Event of Default, each Lender is hereby authorized by each
Borrower at any time or from time to time, with prior written consent of Agent
and with reasonably prompt subsequent notice to such Borrower (any prior or
contemporaneous notice to such Borrower being hereby expressly waived) to set
off and
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to appropriate and to apply any and all (i) balances held by such Lender at any
of its offices for the account of such Borrower or any of its Subsidiaries
(regardless of whether such balances are then due to such Borrower or its
Subsidiaries), and (ii) other property at any time held or owing by such Lender
to or for the credit or for the account of such Borrower or any of its
Subsidiaries, against and on account of any of the Obligations. Any Lender
exercising a right to set off shall, to the extent the amount of any such set
off exceeds its Revolving Loan Percentage of the amount set off, purchase for
cash (and the other Lenders shall sell) interests in each such other Lender's
pro rata share of the Obligations as would be necessary to cause such Lender to
share such excess with each other Lender in accordance with their respective
Revolving Loan Percentages. Each Borrower agrees, to the fullest extent
permitted by law, that any Lender may exercise its right to set off with respect
to amounts in excess of its pro rata share of the Obligations and upon doing so
shall deliver such excess to Agent for the benefit of all Lenders in accordance
with the Revolving Loan Percentages.
10.5 Remedies Cumulative; No Waiver.
All covenants, conditions, provisions, warranties, guaranties,
indemnities, and other undertakings of each Borrower contained in this Agreement
and the other Loan Documents, or in any document referred to herein or contained
in any agreement supplementary hereto or in any schedule or in any Guaranty
Agreement given to Agent or any Lender or contained in any other agreement
between any Lender and such Borrower or between Agent and such Borrower
heretofore, concurrently, or hereafter entered into, shall be deemed cumulative
to and not in derogation or substitution of any of the terms, covenants,
conditions, or agreements of such Borrower herein contained. The failure or
delay of Agent or any Lender to require strict performance by any Borrower of
any provision of this Agreement or to exercise or enforce any rights, Liens,
powers, or remedies hereunder or under any of the aforesaid agreements or other
documents or security or Collateral shall not operate as a waiver of such
performance, Liens, rights, powers and remedies, but all such requirements,
Liens, rights, powers, and remedies shall continue in full force and effect
until all Loans and other Obligations owing or to become owing from such
Borrower to Agent and each Lender have been fully satisfied. None of the
undertakings, agreements, warranties, covenants and representations of any
Borrower contained in this Agreement or any of the other Loan Documents and no
Default or Event of Default by any Borrower under this Agreement or any other
Loan Documents shall be deemed to have been suspended or waived by Lenders,
unless such suspension or waiver is by an instrument in writing specifying such
suspension or waiver and is signed by a duly authorized representative of Agent
and directed to Borrowers.
SECTION 11. THE AGENT
11.1 Authorization and Action.
Each Lender hereby appoints and authorizes Agent to take such
action on its behalf and to exercise such powers under this Agreement and the
other Loan Documents as are delegated to Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. Each Lender
hereby acknowledges that Agent shall not have by reason of this Agreement
assumed a fiduciary relationship in respect of any Lender. In performing its
functions and duties under this Agreement, Agent shall act solely as agent of
Lenders and shall
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not in its capacity as such assume, or be deemed to have assumed, any obligation
toward, or relationship of agency or trust with or for, any Borrower. As to any
matters not expressly provided for by this Agreement and the other Loan
Documents (including without limitation enforcement and collection of the
Notes), Agent may, but shall not be required to, exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, whenever such instruction shall be requested by Agent or
required hereunder, or a greater or lesser number of Lenders if so required
hereunder, and such instructions shall be binding upon all Lenders; provided,
that Agent shall be fully justified in failing or refusing to take any action
which exposes Agent to any liability or which is contrary to this Agreement, the
other Loan Documents or applicable law, unless Agent is indemnified to its
satisfaction by the other Lenders against any and an liability and expense which
it may incur by reason of taking or continuing to take any such action. If Agent
seeks the consent or approval of the Majority Lenders (or a greater or lesser
number of Lenders as required in this Agreement), with respect to any action
hereunder, Agent shall send notice thereof to each Lender and shall notify each
Lender at any time that the Majority Lenders (or such greater or lesser number
of Lenders) have instructed Agent to act or refrain from acting pursuant hereto.
11.2 Agent's Reliance, Etc.
Neither Agent, any Affiliate of Agent, nor any of their
respective directors, officers, agents or employees shall be liable in their
capacity as such for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or the other Loan Documents, except for its
or their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Agent: (i) may treat each Lender party hereto as
the holder of Obligations until Agent receives written notice of the assignment
or transfer of such Lender's portion of the Obligations signed by such Lender
and in form reasonably satisfactory to Agent; (ii) may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts, (iii)
makes no warranties or representations to any Lender and shall not be
responsible to any Lender for any recitals, statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Documents; (iv) shall not have any duty beyond Agent's customary practices in
respect of loans in which Agent is the only lender, to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of this Agreement or the other Loan Documents on the part of any Borrower, to
inspect the property (including the books and records) of any Borrower, to
monitor the financial condition of any Borrower or to ascertain the existence or
possible existence or continuation of any Default or Event of Default; (v) shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (vi) shall not be liable to any Lender for any action taken, or
inaction, by Agent upon the instructions of Majority Lenders pursuant to Section
11.1 hereof or refraining to take any action pending such instructions; (vii)
shall not be liable for any apportionment or distributions of payments made by
it in good faith pursuant to Section 3 hereof; (viii) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, consent, certificate, message or other instrument or writing (which
may be by telephone, facsimile, telegram, cable or telex) believed
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in good faith by it to be genuine and signed or sent by the proper party or
parties; and (ix) may assume that no Event of Default has occurred and is
continuing, unless Agent has actual knowledge of the Event of Default, has
received notice from a Borrower or a Borrower's independent certified public
accountants stating the nature of the Event of Default, or has received notice
from a Lender stating the nature of the Event of Default and that such Lender
considers the Event of Default to have occurred and to be continuing. In the
event any apportionment or distribution described in clause (vii) above is
determined to have been made in error, the sole recourse of any Person to whom
payment was due but not made shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled.
11.3 Fleet and Affiliates.
With respect to its commitment hereunder to make Loans, Fleet
shall have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it were not
Agent; and the terms "Lender," "Lenders" or "Majority Lenders" shall, unless
otherwise expressly indicated, include Fleet in its individual capacity as a
Lender. Fleet and its Affiliates may lend money to, and generally engage in any
kind of business with, each Borrower, and any Person who may do business with or
own Securities of each Borrower all as if Fleet were not Agent and without any
duty to account therefor to any other Lender.
11.4 Lender Credit Decision.
Each Lender acknowledges that it has, independently and
without reliance upon Agent or any other Lender and based on the financial
statements referred to herein and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Agent
shall not have any duty or responsibility, either initially or on an ongoing
basis, to provide any Lender with any credit or other similar information
regarding any Borrower.
11.5 Indemnification.
Lenders agree to indemnify Agent and Arranger (to the extent
not reimbursed by Borrowers), in accordance with their respective Aggregate
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Agent or Arranger in any way relating to or arising out of this
Agreement or any other Loan Document or any action taken or omitted by Agent or
Arranger under this Agreement; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse Agent and Arranger promptly upon demand for its
ratable share, as set forth above, of any out-of-pocket expenses (including
reasonable attorneys' fees) incurred by
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Agent or Arranger in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiation, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and each other Loan Document,
to the extent that Agent or Arranger, as applicable, is not reimbursed for such
expenses by Borrowers. The obligations of Lenders under this Section 11.5 shall
survive the payment in full of all Obligations and the termination of this
Agreement. If after payment and distribution of any amount by Agent to Lenders,
any Lender or any other Person, including any Borrower, any creditor of any
Borrower, a liquidator, administrator or trustee in bankruptcy, recovers from
Agent or Arranger any amount found to have been wrongfully paid to Agent or
Arranger or disbursed by Agent or Arranger to Lenders, then Lenders, in
accordance with their respective Aggregate Percentages, shall reimburse Agent or
Arranger, as applicable, for all such amounts.
11.6 Rights and Remedies to be Exercised by Agent Only.
Each Lender agrees that, except as set forth in Section 10.4,
no Lender shall have any right individually (i) to realize upon the security
created by this Agreement or any other Loan Document, (ii) to enforce any
provision of this Agreement or any other Loan Document, or (iii) to make demand
for payment by Borrower or any Guarantor under this Agreement or any other Loan
Document.
11.7 Agency Provisions Relating to Collateral.
Each Lender authorizes and ratifies Agent's entry into this
Agreement and the Security Documents for the benefit of Lenders. Each Lender
agrees that any action taken by Agent with respect to the Collateral in
accordance with the provisions of this Agreement or the Security Documents, and
the exercise by Agent of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all Lenders. Agent is hereby authorized on behalf of all Lenders,
without the necessity of any notice to or further consent From any Lender to
take any action with respect to any Collateral or the Loan Documents which may
be necessary to perfect and maintain perfected Agent's Liens upon the
Collateral, for its benefit and the ratable benefit of Lenders. Lenders hereby
irrevocably authorize Agent, at its option and in its discretion, to release any
Lien granted to or held by Agent upon any Collateral (i) upon termination of the
Agreement and payment and satisfaction of all Obligations; it being understood
that Agent shall release its Lien on the Collateral upon termination of the
Agreement pursuant to release documentation that is reasonably requested by
Borrowers (and Agent agrees with Borrowers to provide such release); or (ii)
constituting property being sold or disposed of if the sale or disposition is
made in compliance with subsection 8.2.9, as it may be amended From time to time
in accordance with the provisions of Section 12.3; it being understood that
Agent shall release its Lien on any Collateral that is sold or otherwise
disposed of in compliance with subsection 8.2.9 pursuant to release
documentation that is reasonably requested by Borrowers (and Agent agrees with
Borrowers to provide such releases); or (iii) constituting property in which no
Borrower owned any interest at the time the Lien was granted or at any time
thereafter; or (iv) in connection with any foreclosure sale or other enforcement
action with respect to Collateral or in connection with the other exercise by
Agent of remedies hereunder or under another Loan Document, in each case after
the occurrence and during the continuation of an Event of Default or (v) if
approved,
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authorized or ratified in writing by Agent at the direction of all Lenders. Upon
request by Agent at any time, Lenders will confirm in writing Agent's authority
to release particular types or items of Collateral pursuant hereto. Agent shall
have no obligation whatsoever to any Lender or to any other Person to assure
that the Collateral exists or is owned by any Borrower or is cared for,
protected or insured or has been encumbered or that the Liens granted to Agent
herein or pursuant to the Security Documents have been properly or sufficiently
or lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of its
rights, authorities and powers granted or available to Agent in this Section
11.7 or in any of the Loan Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto, Agent
may act in any manner it may deem appropriate, in its sole discretion, but
consistent with the provisions of this Agreement, including given Agent's own
interest in the Collateral as a Lender and that Agent shall have no duty or
liability whatsoever to any Lender.
11.8 Agent's Right to Purchase Commitments.
Agent shall have the right, but shall not be obligated, at any
time upon written notice to any Lender and with the consent of such Lender,
which may be granted or withheld in such Lender's sole discretion, to purchase
for Agent's own account all of such Lender's interests in this Agreement, the
other Loan Documents and the Obligations, for the face amount of the outstanding
Obligations owed to such Lender, including without limitation all accrued and
unpaid interest and fees.
11.9 Right of Sale; Assignment; Participations.
Each Borrower hereby consents to any Lender's participation,
sale, assignment, transfer or other disposition, at any time or times hereafter,
of this Agreement and any of the other Loan Documents, or of any portion hereof
or thereof, including, without limitation, such Lender's rights, title,
interests, remedies, powers, and duties hereunder or thereunder subject to the
terms and conditions set forth below:
11.9.1 Sales Assignments. Each Lender hereby agrees that, with
respect to any sale or assignment (i) no such sale or assignment shall
be for an amount of less than $5,000,000 or any integral multiple of
$1,000,000 in excess thereof (or, if less, the aggregate amount of the
Loans and Loan Commitments of such Lender), (ii) Agent and, in the
absence of a Default or Event of Default, Borrowers, must consent, such
consent not to be unreasonably withheld, to each such assignment to a
Person that is not an original signatory to this Agreement, (iii) the
assigning Lender shall pay to Agent a processing and recordation fee of
$3,500 and any out-of-pocket attorneys' fees and expenses incurred by
Agent in connection with any such sale or assignment and (iv) Agent,
the assigning Lender and the assignee Lender shall each have executed
and delivered an Assignment and Acceptance Agreement. After such sale
or assignment has been consummated and the Register is updated (x) the
assignee Lender thereupon shall become a "Lender" for all purposes of
this Agreement and (y) the assigning Lender shall have no further
liability for funding the portion of Revolving Loan Commitments assumed
by such other Lender.
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11.9.2 Participations. Upon the consent of Agent and, in the
absence of an Event of Default, Borrowers (such consent not to be
unreasonably withheld), any Lender may grant participations in its
extensions of credit hereunder to any other Lender or other lending
institution (a "Participant"), provided that (i) no such participation
shall be for an amount of less than $5,000,000 or any integral multiple
of $1,000,000 in excess thereof (or, if less, the aggregate amount of
the Loans and Loan Commitments of such Lender), (ii) no Participant
shall thereby acquire any direct rights under this Agreement, (iii) no
Participant shall be granted any right to consent to any amendment,
except to the extent any of the same pertain to (1) reducing the
aggregate principal amount of, or interest rate on, or fees applicable
to, any Loan or (2) extending the final stated maturity of any Loan or
the stated maturity of any portion of any payment of principal of, or
interest or fees applicable to, any of the Loans; provided, that the
rights described in this subclause (2) shall not be deemed to include
the right to consent to any amendment with respect to or which has the
effect of requiring any mandatory prepayment of any portion of any Loan
or any amendment or waiver of any Default or Event of Default, (iv) no
sale of a participation in extensions of credit shall in any manner
relieve the originating Lender of its obligations hereunder, (v) the
originating Lender shall remain solely responsible for the performance
of such obligations, (vi) Borrowers and Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and
the other Loan Documents, (vii) in no event shall any financial
institution purchasing the participation grant a participation in its
participation interest in the Loans without the prior written consent
of Agent, and, in the absence of a Default or an Event of Default,
Borrowers, which consents shall not unreasonably be withheld and (viii)
all amounts payable by Borrowers hereunder shall be determined as if
the originating Lender had not sold any such participation.
11.9.3 Certain Agreements of Borrowers. Each Borrower agrees
that (i) it will use its commercially reasonable efforts to cooperate
with each Lender to effect the sale of participation in or assignments
of any of the Loan Documents or any portion thereof or interest
therein, including, without limitation, assisting in the preparation of
appropriate disclosure documents and making members of management
available at reasonable times to meet with and answer questions of
potential assignees and Participants; and (ii) subject to the
provisions of Section 12.15 hereof, such Lender may disclose credit
information regarding each Borrower to any potential Participant or
assignee.
11.9.4 Non U.S. Resident Transferees. If, pursuant to this
Section 11.9, any interest in this Agreement or any Loans is
transferred to any transferee which is organized under the laws of any
jurisdiction other than the United States or any state thereof, the
transferor Lender shall cause such transferee (other than any
Participant), and may cause any Participant, concurrently with and as a
condition precedent to the effectiveness of such transfer, to (i)
represent to the transferor Lender (for the benefit of the transferor
Lender, Agent, and Borrowers) that under applicable law and treaties no
taxes will be required to be withheld and paid by Agent, Borrowers or
the transferor Lender with respect to any payments to be made to such
transferee in respect of the interest so transferred and (ii) comply
with the provisions of Section 2.12(b).
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11.9.5 Register. Pursuant to this subsection 11.9.5, Borrowers
hereby designate Agent to serve as agent for the purposes of this
subsection 11.9.5, and Agent agrees, to maintain, or cause to be
maintained at its offices, a listing of the name and address of each
Lender and the Revolving Loan Commitment of, the principal balance of
and stated interest on the Loans owing to, each Lender (the
"Register"). The entries in such listing shall be conclusive and
binding for all purposes, absent manifest error, and Borrowers, Agent
and Lenders shall treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement.
Loans and Commitments may be assigned or sold in whole or in part only
by recordation of such assignment or sale in the Register. The Register
shall be available for inspection by Borrowers and any Lender at any
reasonable time upon reasonable prior notice.
11.10 [INTENTIONALLY OMITTED].
11.11 Resignation of Agent: Appointment of Successor.
Agent may resign as Agent by giving not less than thirty (30)
days' prior written notice to Lenders and Borrowers. If Agent shall resign under
this Agreement, then, (i) subject to the consent of Borrowers (which consent
shall not be unreasonably withheld and which consent shall not be required
during any period in which a Default or an Event of Default exists), Majority
Lenders shall appoint from among Lenders a successor agent for Lenders or (ii)
if a successor agent shall not be so appointed and approved within the thirty
(30) day period following Agent's notice to Lenders and Borrowers of its
resignation, then Agent shall appoint a successor agent who shall serve as Agent
until such time as Majority Lenders appoint a successor agent, subject to
Borrowers' consent as set forth above. Upon its appointment, such successor
agent shall succeed to the rights, powers and duties of Agent and the term
"Agent" shall mean such successor effective upon its appointment, and the former
Agent's rights, powers and duties as Agent shall be terminated without any other
or further act or deed on the part of such former Agent or any of the parties to
this Agreement. After the resignation of any Agent hereunder, the provisions of
this Section 11 shall inure to the benefit of such former Agent and such former
Agent shall not by reason of such resignation be deemed to be released from
liability for any actions taken or not taken by it while it was an Agent under
this Agreement.
11.12 Audit and Examination Reports: Disclaimer by Lenders.
By signing this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish
such Lender, promptly after it becomes available, a copy of
each audit or examination report (each a "Report" and
collectively, "Reports") prepared by or on behalf of Agent;
(b) expressly agrees and acknowledges that Agent (i)
does not make any representation or warranty as to the
accuracy of any Report, and (ii) shall not be liable for any
information contained in any Report;
(c) expressly agrees and acknowledges that the
Reports are not comprehensive audits or examinations, that
Agent or other party performing any audit or examination will
inspect only specific information regarding each
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Borrower and will rely significantly upon each Borrower's
books and records, as well as on representations of each
Borrower's personnel;
(d) agrees to keep all Reports confidential and
strictly for its internal use, and not to distribute except to
its assignees or participants, or use any Report in any other
manner, in accordance with the provisions of Section 12.15;
and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees:
(i) to hold Agent and any such other Lender preparing a Report
harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any
Report in connection with any loans or other credit
accommodations that the indemnifying Lender has made or may
make to any Borrower, or the indemnifying Lender's
participation in, or the indemnifying Lender's purchase of, a
loan or loans of any Borrower; and (ii) to pay and protect,
and indemnify, defend and hold Agent and any such other Lender
preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses and other
amounts (including attorney's fees and expenses) incurred by
Agent and any such other Lender preparing a Report as the
direct or indirect result of any third parties who might
obtain all or part of any Report through the indemnifying
Lender.
11.13 Syndication Agent, Documentation Agent and Arranger.
None of the Syndication Agent, the Documentation Agent or the
Arranger identified in the introductory paragraph of this Agreement, in its
capacity as such, shall have any rights, powers, duties or responsibilities, and
no rights, powers, duties or responsibilities shall be read into this Agreement
or any other Loan Document or otherwise exist on behalf of or against such
entity, in its capacity as such. If any of the Syndication Agent, the
Documentation Agent or the Arranger resigns, in its capacity as such, no
successor Syndication Agent, Documentation Agent or Arranger (as applicable)
shall be appointed.
11.14 Real Property Collateral.
Notwithstanding any provision of this Agreement or any other
Loan Document to the contrary, Agent shall not take any action to foreclose
upon, acquire or take possession of or occupy, or exercise any remedies by which
it will take title or otherwise come into ownership in respect of Collateral
consisting of real Property (the "Affected Collateral") or purchase or otherwise
acquire (including in lieu of actual payment of a purchase price) any stock or
other equity interest in any Borrower or other Person that owns the Affected
Collateral unless and until (i) Lenders have obtained, at Borrowers' joint and
several expense, a Phase II environmental site assessment with respect to the
Affected Collateral, prepared by an environmental consultant reasonably
acceptable to Lenders and (ii) each Lender has confirmed that no remediation is
required by such Lender or that any remediation has been completed to the
satisfaction of such Lender with respect to the Affected Collateral.
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SECTION 12. MISCELLANEOUS
12.1 Power of Attorney.
Each Borrower hereby irrevocably designates, makes,
constitutes and appoints Agent (and all Persons designated by Agent) as such
Borrower's true and lawful attorney (and agent-in-fact), solely with respect to
the matters set forth in this Section 12.1, and Agent, or Agent's agent, may,
without notice to any Borrower and in such Borrower's or Agent's name, but at
the cost and expense of such Borrower:
12.1.1 Subject to the third sentence of subsection 3.4.1 to
the extent that the taking of any action pursuant to this subsection
12.1.1 causes a credit balance to exist in the Loan Account, at such
time or times as Agent or said agent, in its sole discretion, may
determine, endorse such Borrower's name on any checks, notes,
acceptances, drafts, money orders or any other evidence of payment or
proceeds of the Collateral which come into the possession of Agent or
under Agent's control.
12.1.2 At such time or times after the occurrence and during
the continuance of an Event of Default (provided that the occurrence of
an Event of Default shall not be required with respect to clauses (iv),
(vi)(except as set forth below in such clause (vi>>, (viii) and (ix)
below), as Agent or its agent in its sole discretion may determine: (i)
demand payment of the Accounts from the Account Debtors, enforce
payment of the Accounts by legal proceedings or otherwise, and
generally exercise all of such Borrower's rights and remedies with
respect to the collection of the Accounts; (ii) settle, adjust,
compromise, discharge or release any of the Accounts or other
Collateral or any legal proceedings brought to collect any of the
Accounts or other Collateral; (iii) sell or assign any of the Accounts
and other Collateral upon such terms, for such amounts and at such time
or times as Agent deems advisable, and at Agent's option, with all
warranties regarding the Collateral disclaimed; (iv) take control, in
any manner, of any item of payment or proceeds relating to any
Collateral at any time when a Dominion Period is in effect; (v)
prepare, file and sign such Borrower's name to a proof of claim in
bankruptcy or similar document against any Account Debtor or to any
notice of lien, assignment or satisfaction of lien or similar document
in connection with any of the Collateral;
(i) receive, open and dispose of all mail
addressed to such Borrower and, if an Event of Default has
occurred and is continuing, notify postal authorities to
change the address for delivery thereof to such address as
Agent may designate until such time as no Event of Default
exists; provided, that any contents of such mail other than
any checks, notes, acceptances, drafts, money orders or other
evidence of payment or proceeds of the Collateral shall be
furnished by Agent to such Borrower in accordance with written
instructions provided by such Borrower; (vii) endorse the name
of such Borrower upon any of the items of payment or proceeds
relating to any Collateral and deposit the same to the account
of Agent on account of the Obligations; (viii) endorse the
name of such Borrower upon any chattel paper, document,
instrument, invoice, freight ▇▇▇▇, ▇▇▇▇ of lading or similar
document or agreement relating to any Collateral; (ix) use
such Borrower's stationery and sign the name of such Borrower
to verifications of
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the Accounts and notices thereof to Account Debtors (provided
that Agent shall deliver drafts of any such written
communication to such Borrower prior to the delivery thereof
to any Account Debtors); (x) use the information recorded on
or contained in any data processing equipment and Computer
Hardware and Software relating to the Accounts, Inventory,
Equipment and any other Collateral; (xi) make and adjust
claims under policies of insurance to the extent related to
the Collateral; and (xii) do all other acts and things
necessary, in Agent's determination, to fulfill such
Borrower's obligations under this Agreement.
The power of attorney granted hereby shall constitute a power
coupled with an interest and shall be irrevocable.
12.2 Indemnity.
Each Borrower hereby agrees to jointly and severally indemnify
Agent, Arranger and each Lender (and each of their Affiliates) and hold Agent,
Arranger and each Lender (and each of their Affiliates) harmless from and
against any liability, loss, damage, suit, action or proceeding suffered or
incurred by any such Person (including reasonable documented attorneys fees and
legal expenses) as the result of such Borrower's failure to observe, perform or
discharge such Borrower's duties hereunder (subject to subsection 2.12) or
arising From or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby, except those determined by a court
of competent jurisdiction in a final nonappealable judgment to have arisen out
of the bad faith, gross negligence or willful misconduct of, or breach of the
terms of this Agreement or any other Loan Document by, Agent, Arranger or such
Lender. In addition, each Borrower shall defend Agent, Arranger and each Lender
(and each of their Affiliates) against and hold it harmless from all claims of
any Person with respect to the Collateral (except those determined by a court of
competent jurisdiction in a final nonappealable judgment to have resulted from
the bad faith, gross negligence or intentional misconduct of, or breach of the
terms of this Agreement or any other Loan Document by, any such Person seeking
indemnity). Without limiting the generality of the foregoing, each Borrower
shall indemnify and hold harmless Agent, Arranger and each Lender (and each of
their Affiliates) from and against any loss, damage, cost, expense or liability
directly or indirectly arising out of or under the Environmental Laws, or
attributable to the use, generation, storage, release, threatened release,
discharge, disposal or presence of any pollutants, flammables, explosives,
petroleum (including crude oil) or any fraction thereof, radioactive materials,
hazardous wastes, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition of toxic or
hazardous substances, wastes, or materials under any Environmental Law, except
for those losses, damages, costs, expenses or liabilities determined by a court
of competent jurisdiction in a final nonappealable judgment to have arisen out
of the bad faith, gross negligence or willful misconduct of Agent, Arranger or
such Lender. Notwithstanding any contrary provision in this Agreement, the
obligation of each Borrower under this Section 12.2 shall survive the payment in
full of the non-indemnity Obligations and the termination of this Agreement.
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12.3 Amendments.
No amendment or waiver of any provision of this Agreement or
any other Loan Document (including without limitation any Note), nor consent to
any departure by any Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Lenders and Borrowers,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, that no amendment,
waiver or consent shall be effective, unless (i) in writing and signed by each
Lender, if it does any of the following: (1) increase or decrease the aggregate
Loan Commitments, or any Lender's Revolving Loan Commitment or Term Loan
Commitment, (2) reduce the principal of, or interest on, any amount payable on
any date hereunder or under any Note, other than those payable only to Fleet in
its capacity as Agent, which may be reduced by Fleet unilaterally, (3) decrease
any interest rate payable hereunder, the Unused Line Fee or any other fee
payable to Lenders (as opposed to Agent or Arranger), (4) postpone any date
fixed for any payment of principal of, or interest on, any amounts payable
hereunder or under any Note, other than those payable only to Fleet in its
capacity as Agent, which may be postponed by Fleet unilaterally; provided, that
notwithstanding the foregoing or any other provision of this Section 12.3 to the
contrary, the extension of a due date for a mandatory prepayment of the
Obligations required under subsection 3.3.1, 3.3.2 or 3.3.3 or a modification of
the manner in which any such prepayment is applied to the Obligations shall be
subject to the approval of the Majority Lenders and Borrowers, (5) modify the
definitions of any of the terms Borrowing Base (including, without limitation,
the percentages set forth in the definition of such term), Eligible Account,
Eligible Inventory, Eligible Adjusted Municipal Accounts, Availability Block, if
the effect of such modification is to increase the amount available to be
borrowed in respect of the Revolving Loans, or decrease the amount of the
Availability Block, or modify the definitions of any of the terms Dominion
Event, Dominion Period and Non-Core Fixed Assets, (6) reduce the number of
Lenders that shall be required for Lenders or any of them to take any action
hereunder, (7) release or discharge any Person (other than an Inactive
Subsidiary) liable for the performance of any obligations of any Borrower
hereunder or under any of the Loan Documents, (8) amend any provision of this
Agreement that requires the consent of all Lenders or consent to or waive any
breach thereof, (9) amend the definition of the term "Majority Lenders", (10)
amend this Section 12.3, subsection 1.1.2, subsection 1.1.4(i) or subsection
1.1.5, (11) release Collateral having a fair market value that exceeds
$5,000,000 in the aggregate, unless otherwise permitted pursuant to Section 11.7
hereof or (12) subordinate the Obligations to any other Indebtedness or
subordinate any of the Liens on the Collateral securing the Obligations to any
other Liens, except in the case of subordination of Agent's Liens on assets
subject to permitted Capitalized Lease Obligations or Permitted Purchase Money
Indebtedness (which Agent shall be permitted to effect without the consent of
any other Lender), or amend the terms of the Subordinated Bond Lien
Subordination Agreement; or (ii) in writing and signed by Agent in addition to
the Lenders required above to affect the rights or duties of Agent under this
Agreement, any Note or any other Loan Document. If a fee is to be paid by
Borrowers in connection with any waiver or amendment hereunder, the agreement
evidencing such amendment or waiver may, at the discretion of Agent (but shall
not be required to), provide that only Lenders executing such agreement by a
specified date may share in such fee (and in such case, such fee shall be
divided among the applicable Lenders on a pro rata basis without including the
interests of any Lenders who have not timely executed such agreement).
75
12.4 Sale of Interest.
No Borrower may sell, assign or transfer any interest in this
Agreement, any of the other Loan Documents, or any of the Obligations, or any
portion thereof, including, without limitation, such Borrower's rights, title,
interests, remedies, powers, and duties hereunder or thereunder, without the
prior written consent of Agent and each Lender.
12.5 Severability.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
12.6 Successors and Assigns.
This Agreement, the Other Agreements and the Security
Documents shall be binding upon and inure to the benefit of the successors and
assigns of Borrowers, Agent and each Lender permitted under Section 11.9 hereof.
12.7 Cumulative Effect; Conflict of Terms.
The provisions of the Other Agreements and the Security
Documents are hereby made cumulative with the provisions of this Agreement.
Except as otherwise provided in any of the other Loan Documents by specific
reference to the applicable provision of this Agreement, if any provision
contained in this Agreement is in direct conflict with, or inconsistent with,
any provision in any of the other Loan Documents, the provision contained in
this Agreement shall govern and control.
12.8 Execution in Counterparts.
This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
12.9 Notice.
Except as otherwise provided herein, all notices, requests and
demands to or upon a party hereto, to be effective, shall be in writing, return
receipt requested, by personal delivery against receipt, by overnight courier or
by facsimile and, unless otherwise expressly provided herein, shall be deemed to
have been validly served, given, delivered or received, as applicable,
immediately when delivered against receipt, one Business Day after deposit with
an overnight courier or, in the case of facsimile notice, when sent, addressed
as follows:
76
If to Agent: Fleet Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration Manager
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Goldberg, Kohn, Bell, Black,
▇▇▇▇▇▇▇▇▇▇ & Moritz, Ltd.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Borrower: c/o Neenah Foundry Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
Citigroup Center
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.9; provided, however, that any notice,
request or demand to or upon Agent or a Lender pursuant to subsection 3.1.1 or
4.2.2 hereof shall not be effective until received by Agent or such Lender.
12.10 Consent.
Whenever Agent's, Majority Lenders' or all Lenders' consent is
required to be obtained under this Agreement, any of the Other Agreements or any
of the Security Documents as a condition to any action, inaction, condition or
event, except as otherwise specifically provided herein, Agent, Majority Lenders
or all Lenders, as applicable, shall be authorized to give or withhold such
consent in their sole and absolute discretion and to condition its consent upon
the giving of additional Collateral security for the Obligations, the payment of
money or any other matter.
12.11 Credit Inquiries.
Each Borrower hereby authorizes and permits Agent and each
Lender to respond to usual and customary credit inquiries from third parties
concerning such Borrower or any of its Subsidiaries, subject to the provisions
of Section 12.15.
77
12.12 Time of Essence.
Time is of the essence of this Agreement, the Other Agreements
and the Security Documents.
12.13 Entire Agreement.
This Agreement and the other Loan Documents, together with all
other instruments, agreements and certificates executed by the parties in
connection therewith or with reference thereto, embody the entire understanding
and agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings and
inducements, whether express or implied, oral or written.
12.14 Interpretation.
No provision of this Agreement or any of the other Loan
Documents shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or dictated such
provision.
12.15 Confidentiality.
Agent and each Lender shall keep confidential (and shall use
best efforts to cause its respective agents to keep confidential) all nonpublic
information obtained pursuant to the requirements of this Agreement in
accordance with Agent's and such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure reasonably required by a
prospective participant or assignee in connection with the contemplated
participation or assignment or as required or requested by any governmental
authority or representative thereof or pursuant to legal process and shall
require any such participant or assignee to agree to comply with this Section
12.15. In any event, however, Agent, each Lender, Borrowers and their Affiliates
(and any agent or representative thereof) may disclose to any and all Persons,
without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated hereby and by the other Loan Documents and all
materials of any kind (including opinions or other tax analyses) that are
provided to Agent, any Lender, any Borrower or their Affiliates relating to such
tax treatment and tax structure; it being agreed and understood that (i) this
authorization is retroactively effective to the commencement of the first
discussions between or among any of the parties regarding the transactions
contemplated hereby and by the other Loan Documents and (ii) this authorization
is not intended to permit disclosure of any other information not relevant to
the tax treatment or tax structure of the transactions contemplated hereby,
including, without limitation, (a) any portion of any materials to the extent
not related to the tax treatment or tax structure of the transactions
contemplated hereby, (b) the identities of participants or potential
participants in the transactions contemplated hereby or (c) any other term or
detail not relevant to the tax treatment or the tax structure of the
transactions. The provisions of this Section 12.15 shall remain operative and in
full force and effect regardless of the expiration or termination of this
Agreement.
78
12.16 GOVERNING LAW: CONSENT TO FORUM.
THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED IN
AND SHALL BE DEEMED TO HAVE BEEN MADE IN CHICAGO, ILLINOIS. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF ILLINOIS (WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAWS); PROVIDED,
HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION
OTHER THAN ILLINOIS, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD,
MANNER AND PROCEDURE FOR FORECLOSURE OF AGENT'S LIEN UPON SUCH COLLATERAL AND
THE ENFORCEMENT OF AGENT'S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE
EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT
WITH THE LAWS OF ILLINOIS. AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED,
AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS
OF ANY BORROWER, AGENT OR ANY LENDER, EACH BORROWER HEREBY CONSENTS AND AGREES
THAT THE CIRCUIT COURT OF ▇▇▇▇ COUNTY, ILLINOIS, OR, AT AGENT'S OPTION, THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN
DIVISION, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN BORROWERS ON THE ONE HAND AND AGENT OR ANY LENDER ON THE OTHER
HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO
THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE CONFIRMATION
ORDER (OR IN ANY AGREEMENT TO WHICH ANY BORROWER IS A PARTY) TO THE CONTRARY,
EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES
ANY OBJECTION WHICH SUCH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH BORROWER HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH
BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT OR OTHERWISE PROVIDED TO
AGENT AS A NEW NOTICE ADDRESS IN ACCORDANCE WITH THE TERMS HEREOF AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH BORROWER'S
ACTUAL RECEIPT THEREOF OR 5 BUSINESS DAYS AFTER DEPOSIT IN THE U.S. MAILS,
PROPER POSTAGE PREP AID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
AFFECT THE RIGHT OF AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY AGENT OR ANY LENDER
OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION
UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR
JURISDICTION.
79
12.17 WAIVERS.
EACH BORROWER WAIVES (I) THE RIGHT TO TRIAL BY JURY (WHICH
AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS,
THE OBLIGATIONS OR THE COLLATERAL; (II) PRESENTMENT, DEMAND AND PROTEST AND
NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE,
COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER,
ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES
AT ANY TIME HELD BY AGENT OR ANY LENDER ON WHICH SUCH BORROWER MAY IN ANY WAY BE
LIABLE; (III) NOTICE PRIOR TO AGENT'S TAKING POSSESSION OR CONTROL OF THE
COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO
ALLOWING AGENT TO EXERCISE ANY OF AGENT'S REMEDIES; (IV) THE BENEFIT OF ALL
VALUATION, APPRAISEMENT AND EXEMPTION LAWS; (V) NOTICE OF ACCEPTANCE HEREOF AND
(VI) EXCEPT AS PROHIBITED BY LAW, ANY RIGHT TO CLAIM OR RECOVER ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES (SUCH DAMAGES BEING WAIVED BY BORROWERS ALSO BEING
WAIVED BY AGENT AND EACH LENDER). EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING
WAIVERS ARE A MATERIAL INDUCEMENT TO AGENT'S AND EACH LENDER'S ENTERING INTO
THIS AGREEMENT AND THAT AGENT AND EACH LENDER IS RELYING UPON THE FOREGOING
WAIVERS IN ITS FUTURE DEALINGS WITH SUCH BORROWER. EACH BORROWER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND
HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
12.18 Advertisement.
Each Borrower hereby authorizes Agent to publish the name of
such Borrower and the amount of the credit facility provided hereunder in any
"tombstone" or comparable advertisement which Agent elects to publish. In
addition, each Borrower agrees that, notwithstanding the provisions of Section
12.15, Agent may provide lending industry trade organizations with information
necessary and customary for inclusion in league table measurements after the
Closing Date.
12.19 Non-Applicability of Exculpation Provisions in
Confirmation Order.
With respect to the Confirmation Order, Borrowers hereby agree
and confirm that the exculpation and limitation of liability provisions set
forth in Section 11 (c) thereof do not
80
apply to Agent or any Lender with respect to this Agreement, any other Loan
Document or the Loans contemplated to be made hereunder.
81
IN WITNESS WHEREOF, this Agreement has been duly executed on
the day and year specified at the beginning of this Agreement.
BORROWERS:
NEENAH FOUNDRY COMPANY
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
__________________________________________
▇▇▇▇▇▇ FOUNDRY, INC.
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
_________________________________________
▇▇▇▇▇▇ FORGE CORPORATION
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
_________________________________________
▇▇▇▇▇▇ CORPORATION
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
_________________________________________
▇▇▇▇▇▇ CORPORATION, STRYKER
MACHINING FACILITY CO.
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
_________________________________________
82
▇▇▇▇▇▇ CORPORATION, WARSAW
MANUFACTURING FACILITY
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
__________________________________________
ADVANCED CAST PRODUCTS, INC.
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
__________________________________________
▇▇▇▇▇ INDUSTRIES, INC.
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
__________________________________________
A & M SPECIALTIES, INC.
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
__________________________________________
NEENAH TRANSPORT, INC.
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
__________________________________________
▇▇▇▇▇▇ CORPORATION, ▇▇▇▇▇▇▇ VILLE
MANUFACTURING FACILITY
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇
__________________________________________
Its VP Finance, Treasurer, Secty. & CEO
__________________________________________
83
AGENT, LENDERS AND LETTER OF CREDIT ISSUERS:
FLEET CAPITAL CORPORATION,
as Agent and as a Lender
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
__________________________________________
Its Vice President
_________________________________________
Revolving Loan Commitment: $22,109,464.08
Term Loan Commitment: $6,975,535.92
84
CONGRESS FINANCIAL CORPORATION
(CENTRAL),
as Syndication Agent and as a Lender
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Its Vice President
---------------------------------
Revolving Loan Commitment: $18.244,013,68
Term Loan Commitment: $5,755,986.32
85
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Documentation Agent and as a Lender
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Its Duly Authorized Signatory
---------------------------------
Revolving Loan Commitment: $18,244,013.68
Term Loan Commitment: $5,755,986.32
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By [Illegible]
---------------------------------
Its SVP
---------------------------------
Revolving Loan Commitment: $11,402,508.55
Term Loan Commitment: $3,597,491.45
86
APPENDIX A
GENERAL DEFINITIONS
When used in the Loan and Security Agreement dated as of
October 8, 2003, by and among FLEET CAPITAL CORPORATION, individually as a
Lender and as Agent for Lenders, CONGRESS FINANCIAL CORPORATION (CENTRAL),
individually as a Lender and as Syndication Agent for Lenders, GENERAL ELECTRIC
CAPITAL CORPORATION, individually as a Lender and as Documentation Agent for
Lenders, FLEET SECURITIES, INC., as Arranger, the other financial institutions
which are or become parties thereto as Lenders and NEENAH FOUNDRY COMPANY AND
EACH SUBSIDIARY OF NEENAH FOUNDRY COMPANY IDENTIFIED ON THE SIGNATURES PAGES
THERETO AS A BORROWER, (a) the terms Account, Certificated Security, Chattel
Paper, Commercial Tort Claims, Deposit Account, Document, Electronic Chattel
Paper, Equipment, Financial Asset, Fixture, General Intangibles, Goods,
Instruments, Inventory, Investment Property, Letter of Credit Rights, Payment
Intangibles, Proceeds, Security Entitlement, Software, Supporting Obligations,
Tangible Chattel Paper and Uncertificated Security have the respective meanings
assigned thereto under the UCC; (b) all terms reflecting Collateral having the
meanings assigned thereto under the UCC shall be deemed to mean such Property,
whether now owned or hereafter created or acquired by a Borrower or in which
such Borrower now has or hereafter acquires any interest; ( c) capitalized terms
which are not otherwise defined have the respective meanings assigned thereto in
said Loan and Security Agreement; and (d) the following terms shall have the
following meanings (terms defined in the singular to have the same meaning when
used in the plural and vice versa):
Account Debtor - any Person who is or may become obligated
under or on account of any Account, Contract Right, Chattel Paper or General
Intangible.
Advanced Cast - Advanced Cast Products, Inc., a Delaware
corporation.
Affected Collateral - as defined in subsection 11.14 of the
Agreement.
Affiliate - a Person (other than a Subsidiary): (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, a Person; (ii) which
beneficially owns or holds 10% or more of any class of the Voting Stock of a
Person; or (iii) 10% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 10% or more of the equity interest) of which is
beneficially owned or held by a Person or a Subsidiary of a Person.
Agent - Fleet Capital Corporation in its capacity as agent for
the Lenders under the Agreement and any successor in that capacity appointed
pursuant to subsection 11.11 of the Agreement.
Agent Loans - as defined in subsection 1.1.5 of the Agreement.
Aggregate Percentage - with respect to each Lender, the
percentage equal to the quotient of (i) such Lender's Loan Commitment divided by
(ii) the aggregate of all Loan Commitments.
Agreement - the Loan and Security Agreement referred to in the
first sentence of this Appendix A, all Exhibits and Schedules thereto and this
Appendix A, as each of the same may be amended from time to time.
Applicable Margin - from the Closing Date to, but not
including, the first Adjustment Date (as hereinafter defined) the percentages
set forth below with respect to the Base Rate Revolving Portion, the Base Rate
Term Portion, the LIBOR Revolving Portion, the LIBOR Term Portion and the Unused
Line Fee:
Base Rate Revolving Portion 1.25%
Base Rate Term Portion 1.75%
LIBOR Revolving Portion 2.75%
LIBOR Term Portion 3.25%
Unused Line Fee 0.500%
The percentages set forth above will be adjusted on the first
day of the month following delivery by Borrowers to Agent of the financial
statements required to be delivered pursuant to subsection 8.1.3(ii) of the
Agreement for each March 31, June 30, September 30 and December 31 during the
Term, commencing with the financial statements required to be delivered for the
month ending March 31, 2004 (each such date, an "Adjustment Date"), effective
prospectively, by reference to the applicable "Financial Measurement" (as
defined below) for the four quarters most recently ending in accordance with the
following:
For Adjustment Dates through and including September 30, 2004:
Base Rate Base Rate LIBOR LIBOR
Revolving Term Revolving Term Unused
Financial Measurement Portion Portion Portion Portion Line Fee
---------------------------- ------- ------- ------- ------- --------
Less than 1.15 to 1.00 1.50% 2.00% 3.00% 3.50% 0.500%
Greater than or equal to 1.25% 1.75% 2.75% 3.25% 0.500%
1.15 to 1.00 and less than
1.40 to 1.00
Greater than or equal to 1.00% 1.50% 2.50% 3.00% 0.375%
1.40 to 1.00 and less than
1.65 to 1.00
Greater than or equal to 0.75% 1.25% 2.25% 2.75% 0.375%
1.65 to 1.00
A-2
For Adjustment Dates on and after December 31, 2004:
Base Rate LIBOR
Revolving Base Rate Revolving LIBOR Unused
Financial Measurement Portion Portion Portion Portion Line Fee
--------------------------- ------- ------- ------- ------- --------
Less than 1.20 to 1.00 1.50% 2.00% 3.00% 3.50% 0.500%
Greater than or equal to 1.25% 1.75% 2.75% 3.25% 0.500%
1.20 to 1.00 and less than
1.40 to 1.00
Greater than or equal to 1.00% 1.50% 2.50% 3.00% 0.375%
1.40 to 1.00 and less than
1.65 to 1.00
Greater than or equal to 0.75% 1.25% 2.25% 2.75% 0.375%
1.65 to 1.00
provided that, (i) if Borrowers' audited financial statements for any fiscal
year delivered pursuant to subsection 8.1.3(i) of the Agreement reflect a
Financial Measurement that yields a different Applicable Margin than that
yielded by the monthly financial statements previously delivered pursuant to
subsection 8.1.3(ii) of the Agreement for the last month of such fiscal year,
the Applicable Margin shall be readjusted retroactively for the period that was
incorrectly calculated, (ii) if Borrowers fail to deliver the financial
statements required to be delivered pursuant to subsection 8.1.3(i) or
subsection 8.1.3(ii) of the Agreement on or before the due date thereof, the
Applicable Margin shall automatically adjust to the highest pricing tier set
forth above, effective prospectively from such due date until the date such
financial statements have been delivered and (iii) if the average daily sum of
the outstanding principal balance of the Revolving Credit Loans plus the LC
Amount is less than 50% of the Revolving Credit Maximum Amount for the most
recently completed monthly period, the Applicable Margin as it relates to the
Unused Line Fee shall automatically adjust to be 0.50%, effective retroactively
for such monthly period. For purposes hereof, "Financial Measurement" shall mean
the Fixed Charge Coverage Ratio.
Arranger - Fleet Securities, Inc., in its capacity as Arranger
under the Agreement.
Ashland Parcel - the real Property of ▇▇▇▇▇▇ - Ashland located
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇.
Assignment and Acceptance Agreement - an assignment and
acceptance agreement in the form attached hereto as Exhibit A-1 pursuant to
which a Lender assigns to another Lender all or any portion of any of such
Lender's Revolving Loan Commitment or Term Loan Commitment, as permitted
pursuant to the terms of this Agreement.
Availability Block - $5,000,000.
Bank - Fleet National Bank.
Bankruptcy Court - the United States Bankruptcy Court for the
District of Delaware.
A-3
Base Rate - the higher of (i) the rate of interest announced
or quoted by Bank from time to time as its prime rate for commercial loans,
whether or not such rate is the lowest rate charged by Bank to its most
preferred borrowers (and, if such prime rate for commercial loans is
discontinued by Bank as a standard, a comparable reference rate designated by
Bank as a substitute therefor) or (ii) the Federal Funds Rate plus 50 basis
points per annum.
Base Rate Portion - a Base Rate Term Portion or a Base Rate
Revolving Portion.
Base Rate Revolving Portion - that portion of the Revolving
Credit Loans that is not subject to a LIBOR Option.
Base Rate Term Portion - that portion of the Term Loan that is
not subject to a LIBOR Option.
▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇ Corporation, a Delaware corporation.
▇▇▇▇▇▇▇ Parcel - the real Property in which ▇▇▇▇▇▇▇ bas an
interest that is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇.
Borrowing Base - as at any date of determination thereof, an
amount equal to the lesser of:
1. the Revolving Credit Maximum Amount; or
2. an amount equal to the sum of
1. 85% of the net amount of Eligible Accounts outstanding at such date; plus
2. the lesser of (1) $3,000,000 or (2) 50% of the net amount of Eligible
Adjusted Municipal Accounts outstanding at such date; plus
3. the least of (i) $27,000,000, (ii) 85% of the net orderly liquidation
percentage of each category or type of Eligible Inventory at such date or (iii)
the sum of (A) 65% of the book value of Eligible Inventory consisting of work in
process or finished goods at such date plus (B) 50% of the book value of
Eligible Inventory consisting of raw materials or supplies at such date; minus
4. the Availability Block.
During the occurrence and continuance of an Event of Default,
the limitations set forth in the immediately preceding sentence may be adjusted
downward by Agent and the requirements in the definitions of Eligible Accounts,
Eligible Adjusted Municipal Accounts and Eligible Inventory may be supplemented
by Agent, as Agent shall deem necessary or appropriate in its reasonable credit
judgment (with Agent agreeing to provide Borrowers with reasonably prompt notice
of the making of any such adjustment or the establishment of any such
supplement). For purposes hereof, (1) the net amount of Eligible Accounts at any
time shall be the face amount of such Eligible Accounts less any and all
returns, rebates, discounts (which may, at Agent's option, be calculated on
shortest terms), credits, allowances or excise taxes of
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any nature at any time issued, owing, claimed by Account Debtors, granted,
outstanding or payable in connection with such Accounts at such time, (2) the
amount of Eligible Inventory shall be determined on a first-in, first-out, lower
of cost or market basis in accordance with GAAP and (3) the net orderly
liquidation percentage of each category or type of Eligible Inventory shall be
determined by a third party appraiser reasonably acceptable to Agent and shall
be as reflected in the most recent Inventory appraisal delivered to Agent under
this Agreement.
Borrowing Base Certificate - a certificate by a responsible
officer of Neenah, substantially in the form of Exhibit 8.1.4 (or another form
reasonably acceptable to Agent) setting forth the calculation of the Borrowing
Base, including a calculation of each component thereof, all in such detail as
shall be reasonably satisfactory to Agent. All calculations of the Borrowing
Base in connection with the preparation of any Borrowing Base Certificate shall
originally be made by Neenah and certified to Agent.
Business Day - any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of Wisconsin, the State of
Connecticut or the State of Illinois or is a day on which banking institutions
located in any of such states are closed.
Capital Expenditures - expenditures made or liabilities
incurred for the acquisition of any fixed assets or improvements, replacements,
substitutions or additions thereto which have a useful life of more than one
year, including the total principal portion of Capitalized Lease Obligations,
that are required to be capitalized under GAAP.
Capitalized Lease Obligation - any Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
Cast Alloys - Cast Alloys, Inc., a California corporation.
Chapter 11 Debtors - Each of the Debtors-in-Possession
identified in the Plan of Reorganization.
Closing Date - the date on which all of the conditions
precedent in Section 9 of the Agreement are satisfied or waived and the initial
Loan is made or the initial Letter of Credit or LC Guaranty is issued under the
Agreement.
Collateral - all of the Property and interests in Property
described in Section 5 of the Agreement, and all other Property and interests in
Property that now or hereafter secure the payment and performance of any of the
Obligations.
Compliance Certificate - as defined in subsection 8.1.3 of the
Agreement.
Computer Hardware and Software - all of each Borrower's rights
(including rights as licensee and lessee) with respect to (i) computer and other
electronic data processing hardware, including all integrated computer systems,
central processing units, memory units, display terminals, printers, computer
elements, card readers, tape drives, hard and soft disk drives, cables,
electrical supply hardware, generators, power equalizers, accessories,
peripheral devices and other related computer hardware; (ii) all Software and
all software programs
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designed for use on the computers and electronic data processing hardware
described in clause (i) above, including all operating system software,
utilities and application programs in any form (source code and object code in
magnetic tape, disk or hard copy format or any other listings whatsoever); (iii)
any firmware associated with any of the foregoing; and (iv) any documentation
for hardware, Software and firmware described in clauses (i), (ii) and (iii)
above, including flow charts, logic diagrams, manuals, specifications, training
materials, charts and pseudo codes.
Confirmation Order - the order of the Bankruptcy Court
confirming the Plan of Reorganization pursuant to Section 1129 of the United
States Bankruptcy Code.
Consolidated - the consolidation in accordance with GAAP of
the accounts or other items as to which such term applies.
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 MacKay ▇▇▇▇▇▇▇ LLC, Citicorp Mezzanine III, LP. or the Trust Company
of the West.
Contract Right - any right of each Borrower to payment under a
contract for the sale or lease of goods or the rendering of services, which
right is at the time not yet earned by performance.
Current Assets - at any date means all of the current assets
of a Person would be properly classified as current assets shown on a balance
sheet at such date in accordance with GAAP.
▇▇▇▇▇▇ - ▇▇▇▇▇▇ Corporation, an Indiana corporation.
▇▇▇▇▇▇ - Ashland - ▇▇▇▇▇▇ Corporation, Ashland Manufacturing
Facility, an Ohio corporation.
▇▇▇▇▇▇ - ▇▇▇▇▇▇ Foundry, Inc., a Nebraska corporation.
Default - an event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, become an Event of
Default.
Default Rate - as defined in subsection 2.1.2 of the
Agreement.
Deferrable Interest - interest accruing on the Subordinated
Bonds, the payment of which Neenah may elect to defer until the maturity date of
the Subordinated Bonds pursuant to the Subordinated Bond Documents (each as in
effect as of the date hereof)
Derivative Obligations - every obligation of a Person under
any forward contract, futures contract, exchange contract, swap, option or other
financing agreement or arrangement (including, without limitation, caps, floors,
collars and similar agreement), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices.
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Disclosure Statement - the Disclosure Statement of Chapter 11
Debtors relating to the Plan of Reorganization and dated as of July 1, 2003.
Distribution - in respect of any Person means and includes:
(i) the payment of any dividends or other distributions on Securities (except
distributions in such Securities) and (ii) the redemption or acquisition of
Securities of such Person, as the case may be, unless made contemporaneously
from the net proceeds of the sale of Securities.
Documentation Agent - General Electric Capital Corporation, in
its capacity as Documentation Agent under the Agreement.
Dominion Account - a special bank account or accounts of Agent
established by a Borrower pursuant to subsection 6.2.4 of the Agreement at banks
selected by such Borrower, but acceptable to Agent in its reasonable discretion,
and over which Agent shall have sole and exclusive access and control for
withdrawal purposes.
Dominion Event - the occurrence of either one of the following
events on any date after the end of the Initial Dominion Period: (a) average
Availability (as determined by Agent in its reasonable credit judgment) for the
thirty (30) day period ending on such date is less than $30,000,000 or (b) an
Event of Default occurs.
Dominion Period - (i) the Initial Dominion Period and (ii) at
any time after the Initial Dominion Period has ended, the period commencing with
prior written notice by Agent to Borrowers of the occurrence of a Dominion Event
and ending (a) no less than 60 days thereafter and (b) only after such Dominion
Event is no longer in existence or has been waived by Majority Lenders for a
period of at least 60 consecutive days, provided, that no other Dominion Event
has been in existence during such 60 consecutive day period.
Eligible Account - an Account arising in the ordinary course
of the business of a Borrower from the sale of goods or rendition of services;
provided, that no Account shall be an Eligible Account if:
5. it arises out of a sale made or services rendered by a Borrower to a
Subsidiary of a Borrower or an Affiliate of a Borrower or to a Person controlled
by an Affiliate of a Borrower (unless it is an Account arising out of an
arms-length transaction with a Person that is an Affiliate of a Borrower, or a
Person controlled by an Affiliate of a Borrower, solely by virtue of being a
portfolio company of a Permitted Holder); or
6. (1) it is not a Municipal Account and it remains unpaid more than 90 days
after the original invoice date shown on the invoice or more than 60 days after
the original due date shown on the invoice; or (2) it is a Municipal Account and
it remains unpaid more than 120 days after the original invoice date shown on
the invoice or more than 90 days after the original due date shown on the
invoice; or
7. the total Accounts of the Account Debtor exceed 20% of the net amount of all
Eligible Accounts, but only to the extent of such excess; or
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8. any covenant, representation or warranty contained
in the Agreement with respect to such Account has been
breached; or
9. the Account Debtor is also a creditor or supplier
of a Borrower or any Subsidiary of a Borrower, or the Account
Debtor has disputed liability with respect to such Account, or
the Account Debtor has made any claim with respect to any
other Account due from such Account Debtor to a Borrower or
any Subsidiary of a Borrower, or the Account otherwise is
subject to right of setoff by the Account Debtor, provided,
that in each case any such Account shall be eligible to the
extent such amount thereof exceeds such contract, dispute,
claim, setoff or similar right; or
10. the Account Debtor has commenced a voluntary case
under the federal bankruptcy laws, as now constituted or
hereafter amended, or made an assignment for the benefit of
creditors, or a decree or order for relief has been entered by
a court having jurisdiction in the premises in respect of the
Account Debtor in an involuntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or
any other petition or other application for relief under the
federal bankruptcy laws, as now constituted or hereafter
amended, has been filed against the Account Debtor, or if the
Account Debtor has suspended business or consented to or
suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its
assets or affairs; or
11. it arises from a sale made or services rendered
to an Account Debtor outside the United States, unless the
sale is either (1) to an Account Debtor located in Ontario or
any other province of Canada in which the Personal Property
Security Act has been adopted in substantially the same form
as currently in effect in Ontario or (2) on letter of credit,
guaranty or acceptance terms (with the rights thereunder
having been assigned to Agent), in each case acceptable to
Agent in its reasonable credit judgment; or
12. (1) it arises from a sale to the Account Debtor
on a ▇▇▇▇-and-hold, guaranteed sale, sale-or-return,
sale-on-approval, consignment, or any other repurchase or
return basis, except to the extent that (a) the sale has been
completed, (b) an invoice has been generated, (c) such goods
are no longer subject to return and (d) payment of the invoice
is unconditionally due from the Account Debtor; or (2) it is
subject to a reserve established by a Borrower for potential
returns or refunds, to the extent of such reserve; or
13. the Account Debtor is the United States of
America or any department, agency or instrumentality thereof,
unless the applicable Borrower assigns its right to payment of
such Account to Agent, in a manner satisfactory to Agent, in
its reasonable credit judgment, so as to comply with the
Assignment of Claims Act of 1940 (31 U.S.C. Section 203 et
seq., as amended); or
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14. it is not subject to Agent's duly perfected, first priority
security interest or is subject to a Lien that is not a Permitted Lien (but only
to the extent of the underlying obligation which such Lien secures); or
15. the goods giving rise to such Account have not been delivered to
and accepted by the Account Debtor or the services giving rise to such Account
have not been performed by the applicable Borrower and accepted by the Account
Debtor or the Account otherwise does not represent a final sale; or
16. the Account is evidenced by chattel paper or an instrument of any
kind, or has been reduced to judgment; or
17. a Borrower or a Subsidiary of a Borrower has made any agreement
with the Account Debtor for any extension, compromise, settlement or
modification of the Account or deduction therefrom, except for volume discounts
and discounts or allowances which are made in the ordinary course of business
(in each case which discounts or allowances are reflected in the calculation of
the face value of each invoice related to such Account); or
18. 25% or more of the Accounts owing from the Account Debtor are not
Eligible Accounts hereunder; or
19. it represents service charges, late fees or similar charges.
Eligible Adjusted Municipal Account - a Municipal Account that
(a) would constitute an "Eligible Account" without the application of the
requirements in clause (ii) of the definition thereof and (b) does not remain
unpaid more than 180 days after the original invoice date shown on the invoice
or more 150 days after the original due date shown on the invoice.
Eligible Inventory - Inventory of a Borrower (other than
packaging materials, tooling, patterns, samples and literature); provided, that
no Inventory shall be Eligible Inventory if:
1. it is not raw materials, supplies, work in process that is, in
Agent's opinion, readily marketable in its current form or finished goods which
meet the specifications of the purchase order or contract for such Inventory, if
any; or
2. it is not in good, new and saleable condition; or
3. it is slow-moving, obsolete or unmerchantable; or
4. it does not meet all standards imposed by any governmental agency
or authority; or
5. it does not conform in all respects to any covenants, warranties
and representations set forth in the Agreement; or
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6. it is not subject to Agent's duly perfected, first priority
security interest or is subject to a Lien that is not a Permitted Lien; or
7. it is not situated at a location in compliance with the Agreement,
provided that Inventory situated at a location not owned by a Borrower will be
Eligible Inventory only if Agent has received a satisfactory landlord's
agreement or bailee's letter, as applicable, with respect to such location or if
it is a leased location and Agent has established a Rent Reserve with respect to
such location; or
8. it has been consigned to a Borrower's customer, unless (a) it is
has been delivered to a customer location in respect of which a satisfactory
access agreement has been received by Agent, (b) it is segregated or otherwise
separately identifiable from any goods of any other Person at the applicable
customer location, (c) a UCC-l financing statement has been filed in the
jurisdiction of the applicable customer's organization, which names such
customer as debtor, the applicable Borrower as secured party and Agent as
assignee of secured party and which identifies the Inventory in the possession
of such customer as the collateral and (d) a notice that complies with the terms
of Section 9-324 of the UCC has been delivered to the secured creditors, if any,
of the applicable customer that have a perfected lien in the Inventory of such
customer; provided, that in no event shall the amount of Eligible Inventory that
consists of consigned Inventory exceed $5,000,000 in the aggregate; or
9. it is located outside of the continental United States of America;
or
10. it represents capitalization of freight charges.
Environmental Laws - all federal, state and local laws, rules,
regulations, ordinances, orders and consent decrees relating to health, safety
and environmental matters.
ERISA - the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute, and all rules and regulations from time
to time promulgated thereunder.
Event of Default - as defined in Section 10.1 of the
Agreement.
Federal Funds Rate means, for any day, a floating rate equal
to the weighted average of the rates on overnight federal funds transactions
among members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
Fee Letter - as defined in Section 2.3 of the Agreement.
Fixed Charge Coverage Ratio - as deified in Exhibit 8.3 to the
Agreement.
GAAP - generally accepted accounting principles in the United
States of America in effect from time to time.
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▇▇▇▇▇ - ▇▇▇▇▇ Industries, Inc., a California corporation.
Guarantors - Parent, each Subsidiary Guarantor and each other
Person who now or hereafter guarantees payment or performance of the whole or
any part of the Obligations.
Guaranty Agreements - the Continuing Guaranty Agreement which
is to be executed on the Closing Date by each of Parent and each Subsidiary
Guarantor, in form and substance satisfactory to Agent, together with each other
guaranty hereafter executed by any Guarantor.
Inactive Subsidiaries - each of Cast Alloys; ▇▇▇▇▇▇▇; Peerless
Corporation; ▇▇▇▇▇▇ - Ashland; and International Golf, S.A. de C.V.
Indebtedness - as applied to a Person means, without
duplication:
1. indebtedness arising from the lending of money by any Person to any
Borrower or any of its Subsidiaries;
2. indebtedness, whether or not in any such case arising from the
lending by any Person of money to any Borrower or any of its Subsidiaries, (1)
which is represented by notes payable or drafts accepted that evidence
extensions of credit, (2) which constitutes obligations evidenced by bonds,
debentures, notes or similar instruments, or (3) upon which interest charges are
customarily paid (other than accounts payable) or that was issued or assumed as
full or partial payment for Property;
3. Capitalized Lease Obligations and Purchase Money Indebtedness;
4. reimbursement obligations with respect to letters of credit or
guaranties of letters of credit,
5. Derivative Obligations; and
6. indebtedness of any Borrower or any of its Subsidiaries under any
guaranty of obligations that would constitute Indebtedness under clauses (i)
through (iii) hereof, if owed directly by a Borrower or any of its Subsidiaries.
Indebtedness shall not include trade payables or accrued expenses. For the
avoidance of doubt, the foregoing definition of "Indebtedness" shall not include
preferred stock of any Person.
Initial Dominion Period - the period beginning on the Closing
Date and ending on the date that is at least one year thereafter when (i) no
Event of Default is in existence and (ii) average Availability (as determined by
Agent in its reasonable credit judgment) for the thirty (30) day period ending
on such date is not less than $30,000,000.
Intellectual Property - all past, present and future: trade
secrets, know-how and other proprietary information; trademarks, internet domain
names, service marks, trade dress, trade names, business names, designs, logos,
slogans (and all translations, adaptations,
A-11
derivations and combinations of the foregoing) indicia and other source and/or
business identifiers, and the goodwill of the business relating thereto and all
registrations or applications for registrations which have heretofore been or
may hereafter be issued thereon throughout the world; copyrights (including
copyrights for computer programs) and copyright registrations or applications
for registrations which have heretofore been or may hereafter be issued
throughout the world and all tangible property embodying the copyrights,
unpatented inventions (whether or not patentable); patent applications and
patents; industrial design applications and registered industrial designs;
license agreements related to any of the foregoing and income therefrom; books,
records, writings, computer tapes or disks, flow diagrams, specification sheets,
computer software, source codes, object codes, executable code, data, databases
and other physical manifestations, embodiments or incorporations of any of the
foregoing; the right to ▇▇▇ for all past, present and future infringements of
any of the foregoing; all other intellectual property; and all common law and
other rights throughout the world in and to all of the foregoing.
Notwithstanding the foregoing, Intellectual Property shall not include any
trademarks, trade names, business names or service marks that incorporate the
word "Peerless".
Intercompany Loans - as defined in subsection 8.2.2 of the
Agreement.
Interest Period - as applicable to any LIBOR Portion, a period
commencing on the date such LIBOR Portion is advanced, continued or converted,
and ending on the date which is one (1) month, two (2) months, three (3) months,
or six (6) months later, as may then be requested by Borrowers; provided that
unless Agent notifies Borrowers that the initial syndication of the Loan
commitments have been completed, each Interest Period commencing (a) within the
first 60 days after the Closing Date shall be a period of 1 month and (b)
thereafter shall be a period of 7 days; and provided further that (i) any
Interest Period which would otherwise end on a day which is not a Business Day
shall end in the next preceding or succeeding Business Day as is Agent's custom
in the market to which such LIBOR Portion relates; (ii) there remains a minimum
of one (1) month, two (2) months, three (3) months or six (6) months (depending
upon which Interest Period a Borrower selects) in the Term, unless Borrowers and
Lenders have agreed to an extension of the Term beyond the expiration of the
Interest Period in question; (iii) all Interest Periods of the same duration
which commence on the same date shall end on the same date; and (iv) with
respect to any LIBOR Term Portion, no applicable Interest Period shall extend
beyond the scheduled installment payment date for such LIBOR Term Portion.
LC Amount - at any time, the aggregate undrawn face amount of
all Letters of Credit and LC Guaranties then outstanding.
LC Guaranty - any guaranty pursuant to which Agent, a Letter
of Credit Issuer or any Affiliate of Agent shall guaranty the payment or
performance by a Borrower of its reimbursement obligation under any letter of
credit.
LC Obligations - Any Obligations that arise from any draw
against any Letter of Credit or against any letter of credit supported by an LC
Guaranty.
Letter of Credit - any standby or documentary letter of credit
issued by Agent, a Letter of Credit Issuer or any Affiliate of Agent for the
account of a Borrower.
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Letter of Credit Issuer - as defined in Section 1.2 of the
Agreement.
LIBOR - as applicable to any LIBOR Portion, for the applicable
Interest Period, the rate per annum (rounded upward, if necessary, to the
nearest 1/8 of one percent) as determined on the basis of the offered rates for
deposits in U.S. dollars, for a period of time comparable to such Interest
Period which appears on the Telerate page 3750 as of 11:00 a.m. (London time) on
the day that is two (2) London Banking Days preceding the first day of such
Interest Period; provided, however, if the rate described above does not appear
on the Telerate System on any applicable interest determination date, the LIBOR
shall be the rate (rounded upwards as described above, if necessary) for
deposits in U.S. dollars for a period substantially equal to the Interest Period
on the Reuters Page "LIBO" (or such other page as may replace the LIBO Page on
that service for the purpose of displaying such rates), as of 11:00 a.m. (London
Time), on the day that is two (2) London Banking Days prior to the first day of
such Interest Period. If both the Telerate and Reuters systems are unavailable,
then the rate for that date will be determined on the basis of the offered rates
for deposits in U.S. dollars for a period of time comparable to such Interest
Period which are offered by four (4) major banks in the London interbank market
at approximately 11:00 a.m. (London time), on the day that is two (2) London
Banking Days preceding the first day of such Interest Period as selected by
Agent. The principal London office of each of the major London banks so selected
will be requested to provide a quotation of its U.S. dollar deposit offered
rate. If at least two (2) such quotations are provided, the rate for that date
will be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that date will be determined on the basis of
the rates quoted for loans in U.S. dollars to leading European banks for a
period of time comparable to such Interest Period offered by major banks in New
York City at approximately 11:00 a.m. (New York City time), on the day that is
two (2) London Banking Days preceding the first day of such Interest Period. In
the event that Agent is unable to obtain any such quotation as provided above,
it will be determined that LIBOR pursuant to a Interest Period cannot be
determined. In the event that the Board of Governors of the Federal Reserve
System shall impose a Reserve Percentage with respect to LIBOR deposits of Bank
then for any period during which such Reserve Percentage shall apply, LIBOR
shall be equal to the amount determined above divided by an amount equal to 1
minus the Reserve Percentage.
LIBOR Interest Payment Date - the first day of each calendar
month during the applicable Interest Period and the last day of the applicable
Interest Period.
LIBOR Option - the option granted pursuant to Section 3.1 of
the Agreement to have the interest on all or any portion of the principal amount
of the Revolving Credit Loans or the Term Loan based on the LIBOR.
LIBOR Portion - a LIBOR Revolving Portion or a LIBOR Term
Portion.
LIBOR Request - a notice in writing (or by telephone confirmed
electronically or by telecopy or other facsimile transmission on the same day as
the telephone request) from a Borrower to Agent requesting that interest on a
Revolving Credit Loan or all or any portion of the Term Loan be based on the
LIBOR, specifying: (i) the first day of the Interest Period (which shall be a
Business Day); (ii) the length of the Interest Period; (iii) whether the LIBOR
Portion is a new Loan, a conversion of a Base Rate Portion, or a continuation of
a LIBOR Portion, and (iv)
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the dollar amount of the LIBOR Portion, which shall be in an amount not less
than $1,000,000 or an integral multiple of $100,000 in excess thereof.
LIBOR Revolving Portion - that portion of the Revolving Credit
Loans specified in a LIBOR Request (including any portion of Revolving Credit
Loans which is being borrowed by a Borrower concurrently with such LIBOR
Request) which, as of the date of the LIBOR Request specifying such LIBOR
Revolving Portion, has met the conditions for basing interest on the LIBOR in
Section 3.1 of the Agreement and the Interest Period of which has not
terminated.
LIBOR Term Portion - that portion of the Term Loan specified
in a LIBOR Request which, as of the date of the LIBOR Request specifying such
LIBOR Term Portion, has met the conditions for basing interest on the LIBOR in
Section 3.1 of the Agreement and the Interest Period of which has not
terminated.
Lien - any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on common law, statute or contract. The term "Lien" shall also
include rights of seller under conditional sales contracts or title retention
agreements, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purpose of this definition, any
Property which a Borrower has acquired or holds subject to a conditional sale
agreement or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes shall be deemed
to be subject to a Lien.
Loan Account - each loan account established on the books of
Agent pursuant to Section 3.6 of the Agreement.
Loan Commitment - with respect to any Lender, the amount of
such Lender's Revolving Loan Commitment plus such Lender's Term Loan Commitment.
Loan Documents - the Agreement, the Other Agreements and the
Security Documents.
Loans - all loans and advances of any kind made by Agent, any
Lender, or any Affiliate of Agent or any Lender, pursuant to the Agreement.
London Banking Day - any date on which commercial banks are
open for business in London, England.
MACT Capital Expenditures - capital expenditures made by
Borrowers for the purpose of causing Borrowers to be in material compliance with
effective and applicable MACT Standards prior to the MACT Deadline.
MACT Deadline - the deadline by which Borrowers are required
to be in compliance with the [mal MACT Standards that have become effective and
applicable to Borrowers.
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MACT Reserve Amount - at any time, an amount equal to 50% of
the most recent commercially reasonable estimate, which has been prepared by
Borrowers and approved by Agent in its reasonable discretion (which discretion
may be exercised on the basis of advice from consultants hired by Agent at
Borrowers' expense), of the total amount of capital expenditures necessary to
cause Borrowers to be in material compliance with all effective and applicable
MACT Standards prior to the MACT Deadline.
MACT Standards - Maximum Achievable Control Technology
standards under the Federal Clean Air Act Amendments of 1990, as enacted by
final regulations promulgated by the United States Environmental Protection
Agency.
Majority Lenders - as of any date, Lenders holding 51% of the
Term Loan and Revolving Loan Commitments determined on a combined basis and
following the termination of the Revolving Loan Commitments, Lenders holding 51%
or more of the outstanding Loans, LC Amounts and LC Obligations not yet
reimbursed by a Borrower or funded with a Revolving Credit Loan; provided, that
(i) in each case, if there are 2 or more Lenders with outstanding Loans, LC
Amounts, unfunded and unreimbursed LC Obligations or Revolving Loan Commitments,
at least 2 Lenders shall be required to constitute Majority Lenders; and (ii)
prior to termination of the Revolving Loan Commitments, if any Lender breaches
its obligation to fund any requested Revolving Credit Loan, for so long as such
breach exists, its voting rights hereunder shall be calculated with reference to
its outstanding Loans, LC Amounts and unfunded and unreimbursed LC Obligations,
rather than its Revolving Loan Commitment.
Material Adverse Effect - (i) a material adverse effect on the
business, condition (financial or otherwise), operation, performance or
properties of Borrowers and their Subsidiaries taken as a whole, (ii) a material
adverse effect on the rights and remedies of Agent or Lenders under the Loan
Documents, or (iii) the material impairment of the ability of Borrowers and
Borrowers' Subsidiaries (taken as a whole) to perform their obligations
hereunder or under any Loan Document.
▇▇▇▇▇▇ - ▇▇▇▇▇▇ Forge Corporation, a Delaware corporation.
Mortgages - (i) the deed of trust executed by ▇▇▇▇▇ on or
about the Closing Date in favor of Agent, for the benefit of itself and Lenders,
by which ▇▇▇▇▇ has granted to Agent, as security for the Obligations, a Lien
upon the real Property of ▇▇▇▇▇ located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, (ii) the mortgage executed by ▇▇▇▇▇▇ on or about the Closing Date in
favor of Agent, for the benefit of itself and Lenders, by which ▇▇▇▇▇▇ has
granted to Agent, as security for the Obligations, a Lien upon the real Property
of ▇▇▇▇▇▇ located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, (iii) the mortgage
executed by ▇▇▇▇▇▇ - Ashland on or about the Closing Date in favor of Agent, for
the benefit of itself and Lenders, by which ▇▇▇▇▇▇ - Ashland has granted to
Agent, as security for the Obligations, a Lien upon the Ashland Parcel; (iv) the
mortgage executed by ▇▇▇▇▇▇ Corporation, Stryker Machining Facility Co. on or
about the Closing Date in favor of Agent, for the benefit of itself and Lenders,
by which ▇▇▇▇▇▇ Corporation, Stryker Machining Facility Co. has granted to
Agent, as security for the Obligations, a Lien upon the real Property of ▇▇▇▇▇▇
Corporation, Stryker Machining Facility Co. located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇; (v) the mortgage executed by Advanced Cast on or about the
Closing Date in favor of Agent, for the benefit of itself and Lenders, by which
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Advanced Cast has granted to Agent, as security for the Obligations, a Lien upon
the real Property of Advanced Cast located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇; (vi) the mortgage executed by ▇▇▇▇▇▇ Corporation, Kendallville
Manufacturing Facility on or about the Closing Date in favor of Agent, for the
benefit of itself and Lenders, by which ▇▇▇▇▇▇ Corporation, Kendallville
Manufacturing Facility has granted to Agent, as security for the Obligations, a
Lien upon the real Property of ▇▇▇▇▇▇ Corporation, Kendallville Manufacturing
Facility located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇; (vii) the
mortgages executed by ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Corporation, Warsaw Manufacturing
Facility on or about the Closing Date in favor of Agent, for the benefit of
itself and Lenders, by which ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Corporation, Warsaw Manufacturing
Facility have granted to Agent, as security for the Obligations, a Lien upon the
real Property of ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Corporation, Warsaw Manufacturing Facility
located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇; (viii) the mortgage
executed by Neenah on or about the Closing Date in favor of Agent, for the
benefit of itself and Lenders, by which Neenah has granted to Agent, as security
for the Obligations, a Lien upon the real Property of Neenah located at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (ix) the mortgage executed by Neenah on
or about the Closing Date in favor of Agent, for the benefit of itself and
Lenders, by which Neenah has granted to Agent, as security for the Obligations,
a Lien upon the real Property of Neenah located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (x) the deed of trust executed by ▇▇▇▇▇▇ on or about the
Closing Date in favor of Agent, for the benefit of itself and Lenders, by which
▇▇▇▇▇▇ has granted to Agent, as security for the Obligations, a Lien upon the
real Property of Deeter located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇;
(xi) the mortgage executed by Neenah on or about the Closing Date in favor of
Agent, for the benefit of itself and Lenders, by which Neenah has granted to
Agent, as security for the Obligations, a Lien upon the real Property of Neenah
located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, (xii) the mortgage
executed by Neenah on or about the Closing Date in favor of Agent, for the
benefit of itself and Lenders, by which Neenah has granted to Agent, as security
for the Obligations, a Lien upon the real Property of Neenah located at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇, (xiii) the mortgage executed by Neenah on or
about the Closing Date in favor of Agent, for the benefit of itself and Lenders,
by which Neenah has granted to Agent, as security for the Obligations, a Lien
upon the real Property of Neenah located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, (xiv) the mortgage executed by Neenah on or about the Closing Date in
favor of Agent, for the benefit of itself and Lenders, by which Neenah has
granted to Agent, as security for the Obligations, a Lien upon the real Property
of Neenah located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, (xv) the deed of
trust executed by Neenah on or about the Closing Date in favor of Agent, for the
benefit of itself and Lenders, by which Neenah has granted to Agent, as security
for the Obligations, a Lien upon the real Property of Neenah located at ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, (xvi) the mortgage executed by Neenah on
or about the Closing Date in favor of Agent, for the benefit of itself and
Lenders, by which Neenah has granted to Agent, as security for the Obligations,
a Lien upon the real Property of Neenah located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ S.,
Shakopee, Minnesota and (xvii) all other mortgages, deeds of trust and
comparable documents creating a Lien on real property (or any leasehold or other
interest in real property) now or at any time hereafter securing the whole or
any part of the Obligations.
Multiemployer Plan - has the meaning set forth in Section 4001
(a)(3) of ERISA.
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Municipal Account - an Account of Neenah or ▇▇▇▇▇▇ that arises
out of a sale of any castings that Neenah or ▇▇▇▇▇▇ categorize as municipal
castings in a manner that is consistent with the practices of Neenah and ▇▇▇▇▇▇
in effect as of the Closing Date.
Neenah Transport - Neenah Transport, Inc., a Wisconsin
corporation.
Non-Core Fixed Assets - (i) the fixed assets of ▇▇▇▇▇▇
Corporation, Kendallville Manufacturing Facility located on or at its facility
at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ in Kendallville, Indiana, (ii) the fixed assets of ▇▇▇▇▇
located on or at its facility at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in El Monte, California,
(iii) the fixed assets of ▇▇▇▇▇▇ - Ashland located on or at its facility at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ in Ashland, Ohio, (iv) ▇▇▇▇▇▇▇'▇ interest in the fixed asset
consisting of the ▇▇▇▇▇▇▇ Parcel, (v) the fixed asset of Neenah consisting of
its owned real Property located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in Neenah, Wisconsin
and (vi) the equity of any Person that does not own any assets other than
Non-Core Fixed Assets.
Notes - the Revolving Notes and the Term Notes.
Obligations - all Loans, all LC Obligations and all other
advances, debts, liabilities, obligations, covenants and duties, together with
all interest, fees and other charges thereon, owing, arising, due or payable
from each Borrower to Agent, for its own benefit, from each Borrower to Agent
for the benefit of any Lender, from each Borrower to any Lender, :from each
Borrower to any Letter of Credit Issuer and from each Borrower to Bank or any
other Affiliate of Agent, of any kind or nature, present or future, whether or
not evidenced by any note, guaranty or other instrument, whether arising under
the Agreement, any of the other Loan Documents or any agreements evidencing the
Product Obligations, whether direct or indirect (including those acquired by
assignment), absolute or contingent, primary or secondary, due or to become due,
now existing or hereafter arising and however acquired, and including, without
limitation, any Product Obligations.
Organizational I.D. Number - with respect to any Person, the
organizational identification number assigned to such Person by the applicable
governmental unit or agency of the jurisdiction of organization of such Person.
Other Agreements - any and all agreements, instruments and
documents (other than the Agreement and the Security Documents), heretofore, now
or hereafter executed by any Borrower, any of its Subsidiaries, any Guarantor or
any other third party and delivered to Agent or any Lender in respect of the
transactions contemplated by the Agreement.
Overadvance - as defined in subsection 1.1.2 of the Agreement.
Parent - NFC Castings, Inc., a Delaware corporation.
Permitted Acquisition - any acquisition after the Closing Date
by any Borrower or any Subsidiary formed by such Borrower for such purpose (a
"New Subsidiary"), by any means, of all or substantially all of the assets or
capital stock, an operating division or a business unit, of any Person that is a
going concern, that has been incorporated or organized under the laws of a State
within the United States and that is in a similar or related field of business
to a Borrower as of the date hereof, and so long as Agent and Lenders shall have
received evidence at least 3
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Business Days prior to the closing date of such acquisition that such
acquisition satisfies the following conditions:
1. no Default or Event of Default is in existence at the
time of such acquisition or would be caused thereby
after giving effect thereto;
2. after giving effect to the proposed acquisition,
Borrowers are in compliance with each of the
financial covenants set forth in Section 8.3 of the
Agreement on a pro forma, but unadjusted, basis;
3. the Person or business to be acquired has shown an
unadjusted positive EBITDA (calculated in accordance
with GAAP) for the twelve month period ended
immediately prior to the date of acquisition, as
determined by Agent;
4. the Board of Directors and/or owners of the entity
whose business is to be acquired have provided all
requisite authorization of the proposed transaction;
5. Agent has received at least ten (10) days' prior
written notice of such Acquisition and, as soon as
available, copies of all agreements delivered in
connection therewith;
6. subsection 8.1.8 of the Agreement has been satisfied
with respect to such assets, Person or New Subsidiary
and, as a result thereof, Agent has obtained a first
priority Lien (subject only to Permitted Liens) on
the applicable stock and assets;
7. Agent has received a certificate from Neenah's chief
financial officer (in such Person's capacity as such)
certifying that all of the applicable conditions
contained herein to treating such acquisition as a
Permitted Acquisition have been satisfied;
8. if the total consideration (including cash, notes and
other debt, maximum amounts, consulting and
non-compete payments and the like) for such
acquisition, together with all other acquisitions
completed since the Closing Date, exceeds $5,000,000,
Agent and Majority Lenders have consented in writing
to such acquisition;
9. immediately after giving effect to the consummation
of such acquisition, average Availability (as
determined by Agent in its reasonable credit
judgment) for the thirty (30) day period ending on
the date of such acquisition is not less than
$17,500,000 and actual Availability (as determined by
Agent in its reasonable credit judgment) on the date
of such acquisition is not less than $17,500,000;
provided, that the foregoing test shall not apply if
the consideration for such acquisition is paid solely
in equity of a Borrower having terms reasonably
acceptable to Agent; and
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10. consents have been obtained in favor of Agent to the
collateral assignment of rights and indemnities under
the related acquisition documents.
In no event shall any Accounts or Inventory acquired in
connection with a Permitted Acquisition be deemed eligible for advance hereunder
unless and until Agent has completed (at Borrowers' expense) a Collateral audit
and appraisal of such Property so acquired or to be acquired (which audit and
appraisal shall be conducted in a manner that is consistent with the audits and
appraisals conducted pursuant to subsection 2.7 and subsection 2.10,
respectively, of the Loan Agreement).
Permitted Holders - each of MacKay ▇▇▇▇▇▇▇ LLC, Citicorp
Mezzanine III, LP., Metropolitan Life Insurance Company, Exis Differential
Holdings, Ltd., TCW Shared Opportunity Fund II, LP., Shared Opportunity Fund IIB
LLC, TCW Shared Opportunity Fund IV, LP., TCW Shared Opportunity Fund IVB, LP.,
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.
Permitted Liens - any Lien of a kind specified in subsection
8.2.5 of the Agreement.
Permitted Purchase Money Indebtedness - Purchase Money
Indebtedness of any Borrower incurred after the date hereof which is secured by
a Purchase Money Lien and the principal amount of which, when aggregated with
the principal amount of all other such Indebtedness and Capitalized Lease
Obligations of Borrowers and the Borrowers' Subsidiaries at the time
outstanding, does not exceed $7,500,000. For the purposes of this definition,
the principal amount of any Purchase Money Indebtedness consisting of
capitalized leases (as opposed to operating leases) shall be computed as a
Capitalized Lease Obligation.
Person - an individual, partnership, corporation, limited
liability company, joint stock company, land trust, business trust, or
unincorporated organization, or a government or agency or political subdivision
thereof.
Plan - an employee benefit plan now or hereafter maintained
for employees of any Borrower or any of its Subsidiaries that is covered by
Title IV of ERISA.
Plan of Reorganization - the Amended Prepackaged Joint Plan of
Reorganization of Chapter 11 Debtors under Chapter 11 of the United States
Bankruptcy Code filed with the Bankruptcy Court on September 17, 2003.
Pledge Agreements - collectively, (i) the Pledge Agreement
executed by Parent on or about the Closing Date in favor of Agent, for the
benefit of itself and Lenders, by which Parent has granted to Agent, as security
for the Obligations, a Lien on the 100% of the Securities of Neenah, (ii) the
Pledge Agreement executed by Neenah on or about the Closing Date in favor of
Agent, for the benefit of itself and Lenders, by which Neenah has granted to
Agent, as security for the Obligations, a Lien on the 100% of the Securities of
Neenah Transport, Deeter, Mercer, ▇▇▇▇▇▇, Advanced Cast, Cast Alloys and ▇▇▇▇▇,
(iii) the Pledge Agreement executed by ▇▇▇▇▇▇ on or about the Closing Date in
favor of Agent, for the benefit of itself and Lenders, by which ▇▇▇▇▇▇ has
granted to Agent, as security for the Obligations, a Lien on the 100% of the
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Securities of its Subsidiaries, (iv) the Pledge Agreement executed by ▇▇▇▇▇▇ on
or about the Closing Date in favor of Agent, for the benefit of itself and
Lenders, by which ▇▇▇▇▇▇ has granted to Agent, as security for the Obligations,
a Lien on the 100% of the Securities of its Subsidiaries, (v) the Pledge
Agreement executed by Advanced Cast on or about the Closing Date in favor of
Agent, for the benefit of itself and Lenders, by which Advanced Cast has granted
to Agent, as security for the Obligations, a Lien on the 100% of the Securities
of its Subsidiaries and (vi) all other pledge agreements and comparable
documents now or at any time hereafter securing the whole or any part of the
Obligations.
Product Obligations - every obligation of Borrowers owing to
Bank, Agent or any Affiliate of Bank or Agent under and in respect of anyone or
more of the following types of services or facilities extended to any Borrower
by Bank, Agent or any Affiliate of Bank or Agent: (i) credit cards, (ii) cash
management or related services including the automatic clearing house transfer
of funds for the account of any Borrower pursuant to agreement or overdraft,
(iii) controlled disbursement services and (iv) Derivative Obligations.
Projections - Parent's forecasted Consolidated and
consolidating (i) balance sheets, (ii) profit and loss statements, (ii) cash
flow statements, and (iv) capitalization statements, all prepared on a
consistent basis with the historical financial statements of Parent, Borrowers
and Borrowers' Subsidiaries, together with appropriate supporting details and a
statement of underlying assumptions.
Property - any interest of Borrower or any Subsidiary in any
kind of property or asset, whether real, personal or mixed, or tangible or
intangible.
Purchase Money Indebtedness - means and includes (i)
indebtedness (other than the Obligations) for the payment of all or any part of
the purchase price of any fixed assets, (ii) any indebtedness (other than the
Obligations) incurred at the time of or within 10 days prior to or after the
acquisition of any fixed assets for the purpose of financing all or any part of
the purchase price thereof, and (iii) any renewals, extensions or refinancings
thereof, but not any increases in the principal amounts thereof outstanding at
the time.
Purchase Money Lien - a Lien upon fixed assets which secures
Purchase Money Indebtedness, but only if such Lien shall at all times be
confined solely to the fixed assets the purchase price of which was financed
through the incurrence of the Purchase Money Indebtedness secured by such Lien.
Rebuild Reserve - a reserve created under subsection 1.1.1 of
the Agreement in the amount of all proceeds of insured losses or destruction to
Equipment or real Property being held by Agent pursuant to subsection 3.3.1(a)
pending possible repair or replacement of such Property subject to the original
loss or destruction.
Register - as defined in subsection 11.9.5 of the Agreement.
Related Person - of any Person means any other Person directly
or indirectly owning (a) 5% or more of the outstanding common stock of such
Person (or, in the case of a Person that is not a corporation, 5% or more of the
equity interests in such Person) or (b) 5% or more of the combined voting power
of the Voting Stock of such Person.
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Rent Reserve - means, with respect to any location leased by a
Borrower where Eligible Inventory is located and a satisfactory landlord's
agreement has not been provided, a reserve in an amount equal to the sum of all
rental payments scheduled to come due in the next 3 months for such location.
Rentals - as defined in subsection 8.2.19 of the Agreement.
Reportable Event - any of the events set forth in Section
4043(c) of ERlSA.
Reserves - reserves against the amount of Revolving Credit
Loans which Borrowers may otherwise request under the Agreement that have been
established by Agent in such amounts and with respect to such matters as Agent
shall reasonably deem necessary or appropriate in its reasonable credit judgment
exercised in good faith.
Reserve Percentage - the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed on member banks of the Federal Reserve System against "Euro-currency
Liabilities" as defined in Regulation D.
Restricted Investment - any investment made in cash or by
delivery of Property to any Person, whether by acquisition of stock,
Indebtedness or other obligation or Security, or by loan, advance or capital
contribution, or otherwise, or in any Property except the following:
1. investments by a Borrower, to the extent existing on the Closing
Date, in one or more Subsidiaries of such Borrower;
2. Property to be used in the ordinary course of business;
3. Current Assets arising from the sale of goods and services in the
ordinary course of business of any Borrower or any of its Subsidiaries;
4. investments in direct obligations of the United States of America,
or any agency thereof or obligations guaranteed by the United States of America,
provided that such obligations mature within one year from the date of
acquisition thereof;
5. investments in certificates of deposit maturing within one year
from the date of acquisition and fully insured by the Federal Deposit Insurance
Corporation;
6. investments in commercial paper given the highest rating by a
national credit rating agency and maturing not more than 270 days from the date
of creation thereof;
7. investments in money market, mutual or similar funds having assets
in excess of $100,000,000 and the investments of which are limited to investment
grade securities;
8. Intercompany Loans;
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9. investments made in exchange for Accounts arising in the ordinary
course of business which have not been collected for 120 days and which are, in
the good faith judgment of such Borrower or one of its Subsidiaries,
substantially uncollectable, provided that the instrument evidencing such
investment is delivered to Agent to be held as security for the Obligations
pursuant to the terms of the Agreement;
10. investments in evidence of Indebtedness, securities or other
Property received from another Person by such Borrower or any of its
Subsidiaries in connection with any bankruptcy case or by reason of a
composition or a readjustment of debt or reorganization of such Person as a
result of foreclosure, perfection or enforcement of any Lien in exchange for
evidence of Indebtedness, securities or other Property of such Person;
11. repurchase agreements with respect to securities described in
clause (iv) above entered into with an office of a bank or trust company which
is organized under the laws of the United States or any State thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000;
12. investments consisting of loans for salary, travel advances,
entertainment, relocation, advances against commissions and other similar
advances to employees in the ordinary course of business.
13. investments existing on the date hereof and listed on Exhibit
8.2.12 hereto; and
14. investments otherwise expressly permitted pursuant to the
Agreement.
Revolving Credit Loan - a Loan made by any Lender pursuant to
Section 1.1 of the Agreement.
Revolving Credit Maximum Amount - $70,000,000, as such amount
may be reduced from time to time pursuant to the terms of the Agreement.
Revolving Loan Commitment - with respect to any Lender, the
amount of such Lender's Revolving Loan Commitment pursuant to subsection 1.1.1
of the Agreement, as set forth below such Lender's name on the signature page
hereof or any Assignment and Acceptance Agreement executed by such Lender.
Revolving Loan Percentage - with respect to each Lender, the
percentage equal to the quotient of such Lender's Revolving Loan Commitment
divided by the aggregate of all Revolving Loan Commitments.
Revolving Notes - the Secured Promissory Notes to be jointly
and severally executed by Borrowers on or about the Closing Date in favor of
each Lender to evidence the Revolving Credit Loans, which shall be in the form
of Exhibit 1.1 to the Agreement, together with any replacement or successor
notes therefor.
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Secured Bonds - the 11% Senior Secured Notes due 2010 of
Neenah issued as of the date of the Agreement pursuant to the Secured Bond
Documents in the original principal amount of $133,130,000.
Secured Bond Documents - the Secured Bond Indenture, the
Secured Bonds, any guaranty, mortgage, security agreement or other collateral
document securing the Secured Bonds and all other documents, agreements and
instruments now existing or hereinafter entered into in connection with the
foregoing, in each case as amended from time to time.
Secured Bond Indenture - that certain Indenture providing for
the issuance of the Secured Bonds among Neenah, as issuer, the Subsidiaries of
Neenah party thereto as subsidiary guarantors and the Secured Bond Trustee,
dated as of the date of the Agreement, as amended from time to time in
compliance with its terms and in compliance with any applicable terms of the
Secured Bond Lien Subordination Agreement.
Secured Bond Lien Subordination Agreement - that certain Lien
Subordination Agreement dated as of the date of the Agreement by and among Agent
and the Secured Bond Trustee, as amended from time to time in accordance with
its terms.
Secured Bond Trustee - The Bank of New York, a New York
banking corporation.
Security - all shares of stock, partnership interests,
membership interests, membership units or other ownership interests in any other
Person and all warrants, options or other rights to acquire the same.
Security Documents - the Guaranty Agreements, the Mortgages,
the Pledge Agreements, and all other instruments and agreements now or at any
time hereafter securing the whole or any part of the Obligations.
Solvent - as to any Person, that such Person (i) owns Property
whose fair saleable value as a going concern is greater than the amount required
to pay all of such Person's debts (including contingent debts), (ii) is able to
pay all of its debts as such debts mature and (iii) has capital sufficient to
carry on its business and transactions and all business and transactions in
which it is about to engage.
Subordinated Bonds - the 13% Senior Subordinated Notes due
2013 of Neenah issued as of the date of the Agreement pursuant to the
Subordinated Bond Documents in the original principal amount of $100,000,000 (as
increased by amounts added to the principal balance of the Subordinated Bonds in
satisfaction of interest payments owing in respect of the Subordinated Bonds).
Subordinated Bond Documents - the Subordinated Bond Indenture,
the Subordinated Bonds, any guaranty of the Subordinated Bonds and all other
documents, agreements and instruments now existing or hereinafter entered into
in connection with the foregoing, in each case as amended from time to time.
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Subordinated Bond Indenture - that certain Indenture providing
for the issuance of the Subordinated Bonds among Neenah, as issuer, the
Subsidiaries of Neenah party thereto as subsidiary guarantors and The Bank of
New York, as trustee, dated as of the date of the Agreement.
Subordinated Debt - Indebtedness of any Borrower or any of its
Subsidiaries permitted under the Agreement that is subordinated to the
Obligations in a manner reasonably satisfactory to Agent, and contains terms,
including without limitation, payment terms, satisfactory to Agent (including,
without limitation, the Indebtedness evidenced by the Subordinated Bonds and the
other Subordinated Bond Documents, but excluding the Indebtedness evidenced by
the Secured Bonds and the other Secured Bond Documents).
Subsidiary - any Person of which another Person owns, directly
or indirectly through one or more intermediaries, more than 50% of the Voting
Stock at the time of determination.
Subsidiary Guarantors - each of Cast Alloys; ▇▇▇▇▇▇▇; Peerless
Corporation; ▇▇▇▇▇▇ - Ashland; and each other Subsidiary of Ultimate Parent that
now or hereafter executes a Guaranty Agreement.
Swingline Loans - as defined in subsection 1.1.4 of the
Agreement.
Syndication Agent - Congress Financial Corporation (Central),
in its capacity as Syndication Agent under the Agreement.
Term - as defined in Section 4.1 of the Agreement.
Term Loan - the Loan described in Section 1.3 of the
Agreement.
Term Loan Commitment - with respect to any Lender, the amount
of such Lender's Term Loan Commitment pursuant to Section 1.3 of the Agreement,
as set forth below such Lender's name on the signature pages hereof or any
Assignment and Acceptance Agreement executed by such Lender, minus all Term Loan
payments paid to such Lender.
Term Notes - the Secured Promissory Notes to be executed by
Borrower on or about the Closing Date in favor of each applicable Lender to
evidence its Term Loan, which shall be in the form of Exhibit 1.3 to the
Agreement, together with any replacement or successor notes therefor.
Total Credit Facility - $92,085,000, as such amount may be
reduced from time to time pursuant to the terms of the Agreement.
Type of Organization - with respect to any Person, the kind or
type of entity by which such Person is organized, such as a corporation or
limited liability company.
UCC - the Uniform Commercial Code as in effect in the State of
Illinois on the date of this Agreement, as it may be amended or otherwise
modified.
A-24
Ultimate Parent - ACP Holding Company, a Delaware corporation.
Unused Line Fee - as defined in Section 2.5 of the Agreement.
Voting Stock - Securities of any class or classes of a
corporation, limited partnership or limited liability company or any other
entity the holders of which are ordinarily, in the absence of contingencies,
entitled to vote with respect to the election of corporate directors (or Persons
performing similar functions).
Other Terms. All other terms contained in the Agreement shall
have, when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.
Certain Matters of Construction. The terms "herein", "hereof'
and "hereunder" and other words of similar import refer to the Agreement as a
whole and not to any particular section, paragraph or subdivision. Any pronoun
used shall be deemed to cover all genders. The section titles, table of contents
and list of exhibits appear as a matter of convenience only and shall not affect
the interpretation of the Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof
A-25
LIST OF EXHIBITS
Exhibit 1.1 Form of Revolving Note
Exhibit 1.3 Form of Term Note
Exhibit 6.1.1 Business Locations
Exhibit 7.1.1 Jurisdictions in which each Borrower and each of its
Subsidiaries is Authorized to do Business
Exhibit 7.1.4 Capital Structure of each Borrower and each of its
Subsidiaries
Exhibit 7.1.5 Names; Organization
Exhibit 7.1.13 Surety Obligations
Exhibit 7.1.15 Brokers' Fees
Exhibit 7.1.16 Patents, Trademarks, Copyrights and Licenses
Exhibit 7.1.17 Governmental Consents
Exhibit 7.1.18 Compliance with Laws
Exhibit 7.1.19 Contracts Restricting Right to Incur Debts
Exhibit 7.1.20 Litigation
Exhibit 7.1.22 Capitalized and Operating Leases
Exhibit 7.1.23 Pension Plans
Exhibit 7.1.25 Labor Relations
Exhibit 8.1.3 Form of Compliance Certificate
Exhibit 8.1.4 Form of Borrowing Base Certificate
Exhibit 8.2.3 Existing Indebtedness
Exhibit 8.2.4 Affiliate Transactions
Exhibit 8.2.5 Permitted Liens
Exhibit 8.2.12 Permitted Investments
Exhibit 8.3 Financial Covenants
Exhibit A-1 Form of Assignment and Acceptance Agreement
List of Exhibits and Schedules
EXHIBIT 1.1
FORM OF REVOLVING NOTE
List of Exhibits and Schedules
SECURED PROMISSORY NOTE
REVOLVING CREDIT LOAN
$ October 8, 2003
----------- Chicago, Illinois
FOR VALUE RECEIVED, the undersigned (hereinafter "Borrowers"),
hereby jointly and severally promise to pay to the order of
_________________________ (hereinafter "Lender"), in such coin or currency of
the United States which shall be legal tender in payment of all debts and dues,
public and private, at the time of payment, the principal sum of ____________
Million and 00/100 Dollars ($____________________) or such other amount of
Revolving Credit Loans advanced by Lender and outstanding under the "Loan
Agreement" (defined below), together with interest from and after the date
hereof at the rate from time to time applicable as provided in Section 2.1 of
the Loan Agreement.
This Secured Promissory Note Revolving Credit Loan (the "Note") is
issued pursuant to that certain Loan and Security Agreement by and among
Borrowers, Fleet Capital Corporation, as Agent for itself and the other Lenders,
Fleet Securities, Inc., as Arranger, the Co-Documentation Agents party thereto,
and the Lenders, dated the date hereof (hereinafter, as amended from time to
time, the "Loan Agreement"), and is entitled to all of the benefits and security
of the Loan Agreement. All of the terms, covenants and conditions of the Loan
Agreement and the other Loan Documents are hereby made a part of this Note and
are deemed incorporated herein in full. All capitalized terms used herein,
unless otherwise specifically defined in this Note, shall have the meanings
ascribed to them in the Loan Agreement.
All interest shall be computed in the manner provided in Section 2
of the Loan Agreement.
The principal amount evidenced by this Note may be repaid and
reborrowed in accordance with the terms and conditions of the Loan Agreement.
The principal amount and accrued interest of this Note shall be due and payable
on the dates and in the manner set forth in the Loan Agreement.
The entire remaining principal amount then outstanding, together
with accrued interest and any and all other amounts due hereunder, shall be due
and payable on October 8, 2008.
Notwithstanding the foregoing, the entire unpaid principal balance
and accrued interest on this Note shall be due and payable immediately upon any
termination of the Loan Agreement pursuant to Section 4 thereof.
Upon the occurrence and during the continuance of an Event of
Default, Lender shall have all of the rights and remedies set forth in Section
10 of the Loan Agreement.
Time is of the essence of this Note. To the fullest extent permitted
by applicable law, each Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of nonpayment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible, each provision of this Note shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Lender or Agent in the exercise of
any right or remedy hereunder or under the Loan Agreement shall operate as a
waiver thereof, nor as an acquiescence in any default, nor shall any single or
partial exercise by Lender or Agent of any right or remedy preclude any other
right or remedy. Each Borrower agrees that, without releasing or impairing such
Borrower's liability hereunder, Lender or Agent may at any time release,
surrender, substitute or exchange any collateral securing this Note and may at
any time release any party primarily or secondarily liable for the indebtedness
evidenced by this Note.
This Note shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of Illinois without regard to
any principles of conflicts of law.
-2-
IN WITNESS WHEREOF, each Borrower has caused this Note to be duly
executed and delivered on the date first above written.
NEENAH FOUNDRY COMPANY
By
-------------------------------------
Its
------------------------------------
▇▇▇▇▇▇ FOUNDRY, INC.
By
-------------------------------------
Its
------------------------------------
▇▇▇▇▇▇ FORGE CORPORATION
By
-------------------------------------
Its
------------------------------------
▇▇▇▇▇▇ CORPORATION
By
-------------------------------------
Its
------------------------------------
▇▇▇▇▇▇ CORPORATION, STRYKER MACHINING
FACILITY CO.
By
-------------------------------------
Its
------------------------------------
-3-
▇▇▇▇▇▇ CORPORATION, WARSAW
MANUFACTURING FACILITY
By
-------------------------------------
Its
------------------------------------
ADVANCED CAST PRODUCTS, INC.
By
-------------------------------------
Its
------------------------------------
▇▇▇▇▇ INDUSTRIES, INC.
By
-------------------------------------
Its
------------------------------------
-4-
EXHIBIT 1.3
FORM OF TERM NOTE
Exhibit 7.1.25 - Page 1
SECURED PROMISSORY NOTE
TERM LOAN
$ October 8, 2003
----------- Chicago, Illinois
FOR VALUE RECEIVED, the undersigned (hereinafter "Borrower"), hereby
promises to pay to the order of _____________________ (hereinafter, "Lender"),
in such coin or currency of the United States which shall be legal tender in
payment of all debts and dues, public and private, at the time of payment, the
principal sum of _________________________ Million and 00/100 Dollars
($___________________), together with interest from and after the date hereof at
the rate from time to time applicable as provided in Section 2.1 of the Loan
Agreement.
This Secured Promissory Note Term Loan (this "Note") is issued
pursuant to, that certain Loan and Security Agreement among Borrower, Fleet
Capital Corporation, as Agent for itself and the other Lenders, Fleet
Securities, Inc., as Arranger, the Co-Documentation Agents party thereto, and
the Lenders from time to time party thereto, of even date herewith (hereinafter,
as amended from time to time, the "Loan Agreement"), and is entitled to all of
the benefits and security of the Loan Agreement. All of the terms, covenants and
conditions of the Loan Agreement and the Loan Documents are hereby made a part
of this Note and are deemed incorporated herein in full. All capitalized terms
used herein, unless otherwise specifically defined in this Note, shall have the
meanings ascribed to them in the Loan Agreement.
All interest shall be computed in the manner provided in Section 2
of the Loan Agreement.
The principal amount and accrued interest of this Note shall be due
and payable on the dates and in the manner set forth in the Loan Agreement:
The entire remaining principal amount then outstanding, together
with accrued interest and any and all other amounts due hereunder, shall be due
and payable on October 8, 2008.
Notwithstanding the foregoing, the entire unpaid principal balance
and accrued interest on this Note shall be due and payable immediately upon any
termination of the Loan Agreement pursuant to Section 4 thereof This Note shall
also be subject to mandatory and optional prepayment in accordance with the
provisions of Section 3.3 of the Loan Agreement.
Upon the occurrence and during the continuance of an Event of
Default, Lender shall have all of the rights and remedies set forth in Section
10 of the Loan Agreement.
Time is of the essence of this Note. To the fullest extent permitted
by applicable law, Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible, each provision of this Note shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Lender or Agent in the exercise of
any right or remedy hereunder or under the Loan Agreement shall operate as a
waiver thereof, nor as an acquiescence in any default, nor shall any single or
partial exercise by Lender or Agent of any right or remedy preclude any other
right or remedy. Lender or Agent, at its option, may enforce its rights against
any collateral securing this Note without enforcing its rights against Borrower,
any guarantor of the indebtedness evidenced hereby or any other property or
indebtedness due or to become due to Borrowers. Borrower agrees that, without
releasing or impairing Borrower's liability hereunder, Lender or Agent may at
any time release, surrender, substitute or exchange any collateral securing this
Note and may at any time release any party primarily or secondarily liable for
the indebtedness evidenced by this Note.
This Note shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of Illinois without regard to
any principles of conflicts of law.
-2-
IN WITNESS WHEREOF, each Borrower has caused this Note to be duly
executed and delivered on the date first above written.
NEENAH FOUNDRY COMPANY
By
-------------------------------------
Its
------------------------------------
▇▇▇▇▇▇ FOUNDRY, INC.
By
-------------------------------------
Its
------------------------------------
▇▇▇▇▇▇ FORGE CORPORATION
By
-------------------------------------
Its
------------------------------------
▇▇▇▇▇▇ CORPORATION
By
-------------------------------------
Its
------------------------------------
▇▇▇▇▇▇ CORPORATION, STRYKER MACHINING
FACILITY CO.
By
-------------------------------------
Its
------------------------------------
-3-
▇▇▇▇▇▇ CORPORATION, WARSAW
MANUFACTURING FACILITY
By
-------------------------------------
Its
------------------------------------
ADVANCED CAST PRODUCTS, INC.
By
-------------------------------------
Its
------------------------------------
▇▇▇▇▇ INDUSTRIES, INC.
By
-------------------------------------
Its
------------------------------------
-4-
EXHIBIT 7.1.4
CAPITAL STRUCTURE
1. The classes and the number of authorized and issued Securities of each
Borrower and each of its Subsidiaries and the record owner of such
Securities are as follows:
Borrowers:
----------------------------------------------------------------------------------------------------------------------
Number of Number of
Securities Securities
Class of Issued and Authorized but Record
Entity Securities Outstanding Unissued Owners
----------------------------------------------------------------------------------------------------------------------
A & M Specialties, Inc. Common 1,000 shares 99,000 shares ▇▇▇▇▇▇
Voting Stock issued of Common Forge
Voting Stock Corporation
----------------------------------------------------------------------------------------------------------------------
Advanced Cast Common Stock 100 shares of None Neenah
Products, Inc. Common Stock Foundry
issued Company
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation Common Stock 2,371,342.8776 6,378,657.1224 Neenah
shares of shares of Foundry
Common Stock Common Stock Company
issued
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Common Stock 100 shares of 9,900 shares of ▇▇▇▇▇▇
Kendallville Common Stock Common Stock Corporation
Manufacturing Facility issued
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Common Stock 1,000 shares of None ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Machining Common Stock Corporation
Facility Co. issued
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Common Stock 100 shares of 900 shares of ▇▇▇▇▇▇
Warsaw Manufacturing Common Stock Common of Corporation
Facility issued Stock
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Foundry, Inc. Common Stock 1,000 shares of 99,000 shares Neenah
Common Stock of Common Foundry
issued Stock Company
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Industries, Inc. Common Stock 1,049,742.5 950,257.5 Neenah
shares of shares of Foundry
Common Stock Common Stock Company
issued
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Forge Common Stock 625 shares of 375 shares of Neenah
Corporation Common Stock Common Stock Foundry
issued Company
----------------------------------------------------------------------------------------------------------------------
Exhibit 7.1.4 - Page 1
----------------------------------------------------------------------------------------------------------------------
Number of Number of
Securities Securities
Class of Issued and Authorized but Record
Entity Securities Outstanding Unissued Owners
----------------------------------------------------------------------------------------------------------------------
Neenah Foundry Class A 1,000 shares of None NFC
Company Common Stock Class A Castings,
Common Stock Inc.
issued
----------------------------------------------------------------------------------------------------------------------
100 shares of Neenah
Neenah Transport, Inc. Common Stock Common Stock 460 shares of Foundry
issued Common Stock Company
----------------------------------------------------------------------------------------------------------------------
Subsidiaries:
----------------------------------------------------------------------------------------------------------------------
Number of Number of
Securities Securities
Class of Issued and Authorized but Record
Entity Securities Outstanding Unissued Owners
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Corporation Common Stock 100 shares of None Advanced
Common Stock Cast
issued Products,
Inc.
----------------------------------------------------------------------------------------------------------------------
Cast Alloys, Inc. Common Stock 1,000 shares of 2,449,000 Neenah
Common Stock shares of Foundry
issued Common Stock Company
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Common Stock 100 shares of 750 shares of ▇▇▇▇▇▇
Ashland Common Stock Common Stock Corporation
Manufacturing Facility issued
----------------------------------------------------------------------------------------------------------------------
Peerless Corporation Common Stock 100 shares of 650 shares of Advanced
Common Stock Common Stock Cast
issued Products,
Inc.
----------------------------------------------------------------------------------------------------------------------
2. The number, nature and holder of all other outstanding Securities of each
Borrower and each of its Subsidiaries are as follows:
None.
Exhibit 7.1.4 - Page 2
3. The correct name and jurisdiction of incorporation or organization of each
Subsidiary of each Borrower and the percentage of its issued and
outstanding Voting Stock owned by such Borrower are as follows:
----------------------------------------------------------------------------------------------------------------------
Jurisdiction of
Incorporation / Percentage of Voting
Name Organization Stock Owned by a Borrower
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Corporation Delaware 100% owned by Advanced Cast
Products, Inc.
----------------------------------------------------------------------------------------------------------------------
Cast Alloys, Inc. California 100% owned by Neenah
Foundry Company
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Ashland Ohio 100% owned by ▇▇▇▇▇▇
Manufacturing Facility Corporation
----------------------------------------------------------------------------------------------------------------------
Peerless Corporation Ohio 100% owned by Advanced Cast
Products, Inc.
----------------------------------------------------------------------------------------------------------------------
4. The name of each Borrower's and each of its Subsidiaries' corporate or
joint venture relationships and the nature of the relationships are as
follows:
None.
5. The agreements or instruments binding upon the partners, members or
shareholders of each Borrower and each of its Subsidiaries and relating to
the ownership of its Securities, are as follows:
None.
Exhibit 7.1.4 - Page 3
EXHIBIT 7.1.5
NAMES; ORGANIZATION
1. Each Borrower's exact legal name and state of incorporation are:
-------------------------------------------------------------------------------------------------------------
Borrowers: State of Incorporation:
-------------------------------------------------------------------------------------------------------------
A & M Specialties, Inc. Pennsylvania
-------------------------------------------------------------------------------------------------------------
Advanced Cast Products, Inc. Delaware
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation Indiana
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Kendallville Manufacturing Facility Indiana
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Stryker Machining Facility Co. Ohio
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Warsaw Manufacturing Facility Indiana
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Foundry, Inc. Nebraska
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Industries, Inc. California
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Forge Corporation Delaware
-------------------------------------------------------------------------------------------------------------
Neenah Foundry Company Wisconsin
-------------------------------------------------------------------------------------------------------------
Neenah Transport, Inc. Wisconsin
-------------------------------------------------------------------------------------------------------------
2. Other than set forth above, in the conduct of its business, the following
Borrowers have used the following legal, fictitious or trade names within
the last five years:
Advanced Cast Products, Inc. has used the name Meadville Cast Products.
3. The exact legal name and state of incorporation of each Subsidiary of each
Borrower are:
-------------------------------------------------------------------------------------------------------------
Subsidiaries: State of Incorporation:
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Corporation Delaware
-------------------------------------------------------------------------------------------------------------
Cast Alloys, Inc. California
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Ashland Manufacturing Facility Ohio
-------------------------------------------------------------------------------------------------------------
Peerless Corporation Ohio
-------------------------------------------------------------------------------------------------------------
Exhibit 7.1.5 - Page 1
4. Other than as set forth above, in the conduct of its business, the
following Subsidiaries of each Borrower have used the following legal,
fictitious or trade names within the last five years:
Cast Alloys, Inc. was formerly known as Niemin ▇▇▇▇▇▇ & Co.
5. Each Borrower's Organizational LD. Number is:
------------------------------------------------------------------------------------------------------------
Borrowers: Organizational ID Number:
------------------------------------------------------------------------------------------------------------
A & M Specialties, Inc. 002575141
------------------------------------------------------------------------------------------------------------
Advanced Cast Products, Inc. 2202982
------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation 194258-113
------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Kendallville Manufacturing Facility 198701-286
------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Stryker Machining Facility Co. 738408
------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Warsaw Manufacturing Facility 1997010259
------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Foundry, Inc. 0034729
------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Industries, Inc. CO202437
------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Forge Corporation 2074220
------------------------------------------------------------------------------------------------------------
Neenah Foundry Company N020480
------------------------------------------------------------------------------------------------------------
Neenah Transport, Inc. N08621
------------------------------------------------------------------------------------------------------------
6. The Organizational I.D. Number of each Subsidiary of each Borrower is:
-----------------------------------------------------------------------------------------------------------
Subsidiaries: Organizational ID Number:
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Corporation 2204798
-----------------------------------------------------------------------------------------------------------
Cast Alloys, Inc. C1321928
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Ashland Manufacturing Facility 907962
-----------------------------------------------------------------------------------------------------------
Peerless Corporation 755551
-----------------------------------------------------------------------------------------------------------
7. Each Borrower's Type of Organization is:
-----------------------------------------------------------------------------------------------------------
Borrowers: Type of Organization:
-----------------------------------------------------------------------------------------------------------
A & M Specialties, Inc. Corporation
-----------------------------------------------------------------------------------------------------------
Exhibit 7.1.5 - Page 2
-----------------------------------------------------------------------------------------------------------
Borrowers: Type of Organization:
-----------------------------------------------------------------------------------------------------------
Advanced Cast Products, Inc. Corporation
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation Corporation
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Kendallville Manufacturing Facility Corporation
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Stryker Machining Facility Co. Corporation
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Warsaw Manufacturing Facility Corporation
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Foundry, Inc. Corporation
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Industries, Inc. Corporation
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Forge Corporation Corporation
-----------------------------------------------------------------------------------------------------------
Neenah Foundry Company Corporation
-----------------------------------------------------------------------------------------------------------
Neenah Transport, Inc. Corporation
-----------------------------------------------------------------------------------------------------------
8. The Type of Organization of each Subsidiary of each Borrower is:
-----------------------------------------------------------------------------------------------------------
Subsidiaries: Type of Organization:
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Corporation Corporation
-----------------------------------------------------------------------------------------------------------
Cast Alloys, Inc. Corporation
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Corporation, Ashland Manufacturing Facility Corporation
-----------------------------------------------------------------------------------------------------------
Peerless Corporation Corporation
-----------------------------------------------------------------------------------------------------------
9. Other than has been disclosed through filings with the Securities and
Exchange Commission, each of the following Borrowers have been the
surviving entity of a merger or consolidation or has acquired substantially
all the assets of any person within the last five years:
None.
10. Other than has been disclosed through filings with the Securities and
Exchange Commission, each of the following Subsidiaries of any Borrower has
been the surviving entity of a merger or consolidation or has it acquired
substantially all the assets of any person within the last five years:
None.
Exhibit 7.1.5 - Page 3
EXHIBIT 8.1.3
COMPLIANCE CERTIFICATE
[______________________________]
_________________, ____
Fleet Capital Corporation, as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned, the chief financial officer of NFC Castings, Inc.
("Parent"), gives this certificate on behalf of Ultimate Parent to Fleet Capital
Corporation, in its capacity as Agent ("Agent") in accordance with the
requirements of subsection 8.1.3 of that certain Loan and Security Agreement
dated as of October __, 2003 among Neenah Foundry Company, as a Borrower, the
Subsidiaries of Neenah Foundry Company party thereto as Borrowers, General
Electric Capital Corporation, Congress Financing Corporation (Central), Agent,
Fleet Securities, Inc., as Arranger, and the Lenders party thereto ("Loan
Agreement"). Capitalized terms used in this Certificate, unless otherwise
defined herein, shall have the meanings ascribed to them in the Loan Agreement.
1. Based upon my review of the balance sheets and statements of income of
Parent, Borrowers and Borrowers' Subsidiaries for the [____________] period
ending _________________, ___, copies of which are attached hereto, the
undersigned hereby certifies on behalf of Ultimate Parent that:
(i) Capital Expenditures during the period and for the fiscal year
to date total $ ________ and $ _________, respectively.
(ii) The Fixed Charge Coverage Ratio as of the last day of the
period is _________: 1.00.
2. No Default exists on the date hereof, other than _____________________
___________________________________________________ [IF NONE, SO STATE]; and
Exhibit 8.1.3 - Page 1
3. No Event of Default exists on the date hereof, other than ____________
___________________________________________________ [IF NONE, SO STATE].
Very truly yours,
NFC CASTINGS, INC.
--------------------------------------
Chief Financial Officer
Exhibit 8.1.3 - Page 1
EXHIBIT 8.1.4
FORM OF BORROWING BASE CERTIFICATE
Exhibit 8.1.4 - Page 1
EXHIBIT 8.3
FINANCIAL COVENANTS
DEFINITIONS
EBITDA - with respect to any period, the sum of net earnings (or loss)
before interest expense, income taxes, depreciation and amortization for such
period (but excluding any extraordinary gains for such period), all as
determined for Parent, Borrowers and the Borrowers' Subsidiaries on a
Consolidated basis and in accordance with GAAP; plus amounts deducted in
determining net earnings (or loss) in respect of: (a) the fees, costs and
expenses actually incurred in connection with the consummation of the Plan of
Reorganization, and the closing of the Agreement and the transactions
contemplated thereby, in the actual amounts and during the actual fiscal periods
incurred, (b) non-recurring, non-cash items and (c) one-time cash expenses
relating to the closing of the facility of ▇▇▇▇▇▇ Corporation, Kendallville
Manufacturing Facility located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ of
up to a maximum aggregate amount of $4,000,000; and minus the amount of any cash
items not otherwise deducted in determining net income (or loss) to the extent
that such items were previously added back to EBITDA as non-recurring, non-cash
items on a prior measurement date. Notwithstanding the foregoing, it is
acknowledged and agreed that (i) for purposes of the December 31, 2003
measurement date, EBITDA for the portion of the measurement period beginning on
January 1, 2003 and ending on September 30, 2003 shall be deemed to be
$41,981,000, (ii) for purposes of the March 31, 2004 measurement date, EBITDA
for the portion of the measurement period beginning on April 1, 2003 and ending
on September 30, 2003 shall be deemed to be $33,928,000 and (iii) for purposes
of the June 30, 2004 measurement date, EBITDA for the portion of the measurement
period beginning on July 1, 2003 and ending on September 30, 2003 shall be
deemed to be $17,765,000.
FIXED CHARGE COVERAGE RATIO - with respect to any period, the ratio of (i)
EBITDA for such period minus the sum of (a) income taxes payable in cash during
such period plus (b) non-financed Capital Expenditures (other than MACT Capital
Expenditures) during such period plus (c) the positive difference, if any,
between (1) non-financed MACT Capital Expenditures during such period minus (2)
the aggregate amount of the quarterly accretions that have occurred during such
period pursuant to the third sentence of subsection 1.1.1 of the Loan Agreement
in respect of the MACT Reserve Amount plus (d) Distributions made in cash
pursuant to subsection 8.2.7(iii) of the Loan Agreement during such period, to
(ii) Fixed Charges for such period, all as determined for Parent, Borrowers and
the Borrowers' Subsidiaries on a Consolidated basis and in accordance with GAAP.
FIXED CHARGES - with respect to any period, the sum of: (i) scheduled
principal payments required to be made during such period in respect to
Indebtedness (including the principal portion of Capitalized Lease Obligations),
plus (ii) Interest Expense for such period, all as determined for Parent,
Borrowers and the Borrowers' Subsidiaries on a Consolidated basis and in
accordance with GAAP, plus (iii) the amount of any repayments, prepayments,
redemptions or repurchases with respect to principal made during such period in
respect of the
Exhibit 8.3 - Page 1
Subordinated Bonds pursuant to subsection 8.2.6(i)( d) of the Loan Agreement
Notwithstanding the foregoing, it is acknowledged and agreed that for purposes
of each of the December 31, 2003, March 31, 2004, June 30, 2004 and September
30, 2004 measurement dates, scheduled principal payments in respect of the Term
Loan shall be deemed to be $3,155,000 for each of the twelve (12) month periods
ending on such dates.
INTEREST EXPENSE - with respect to any period, (a) interest expense paid
or accrued to be paid for such period, including without limitation the interest
portion of Capitalized Lease Obligations, plus the Letter of Credit and LC
Guaranty fees owing for such period (but excluding Deferrable Interest for such
period and excluding non-cash amortization of deferred financing costs and
original issue discount), all as determined for Parent, Borrowers and Borrowers'
Subsidiaries on a Consolidated basis and in accordance with GAAP plus (b)
Deferrable Interest actually paid in cash during such period. Notwithstanding
the foregoing, it is acknowledged and agreed that (i) for purposes of the
December 31, 2003 measurement date, Interest Expense for the portion of the
measurement period beginning on January 1, 2003 and ending on September 30, 2003
shall be deemed to be $16,832,000, (ii) for purposes of the March 31, 2004
measurement date, Interest Expense for the portion of the measurement period
beginning on April 1, 2003 and ending on September 30, 2003 shall be deemed to
be $11,222,000 and (iii) for purposes of the June 30, 2004 measurement date,
Interest Expense for the portion of the measurement period beginning on July 1,
2003 and ending on September 30, 2003 shall be deemed to be $5,611,000.
Exhibit 8.3 - Page 2
COVENANT
FIXED CHARGE COVERAGE RATIO. Borrowers shall not permit the Fixed Charge
Coverage Ratio for any period set forth below to be less than the ratio set
forth below opposite such period (in each case measured as of the last day of
such period):
PERIOD RATIO
------ -----
Twelve (12) month period ending on December 31, 2003 1.10 to 1.0
Twelve (12) month period ending on March 31,2004 1.10 to 1.0
Twelve (12) month period ending on June 30, 2004 1.10 to 1.0
Twelve (12) month period ending on September 30, 2004 1.10 to 1.0
Twelve (12) month period ending on December 31, 2004 and each 1.15 to 1.0
March 31, June 30, September 30 and December 31 thereafter
Exhibit 8.3 - Page 3
EXHIBIT A-1
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Exhibit A-1 - Page 1
EXHIBIT A-1
ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE (the "Assignment and Acceptance") dated as of
___________, 2003 among _____________________ ("Assignor"), ___________________
("Assignee"), and FLEET CAPITAL CORPORATION, as agent (the "Agent") [AND] FLEET
SECURITIES, INC., as Arranger (the "Arranger") [AND NEENAH FOUNDRY COMPANY AND
CERTAIN OF ITS SUBSIDIARIES (COLLECTIVELY, "BORROWERS")] under the Loan
Agreement referred to below.
WITNESSETH:
WHEREAS, Assignor is a party to a Loan and Security Agreement dated
September __' 2003 (as the same may be amended, restated, modified or
supplemented from time to time, the "Loan Agreement"; unless otherwise defined
herein, capitalized terms used herein shall have the meanings ascribed to them
in the Loan Agreement), among [BORROWERS/NEENAH FOUNDRY COMPANY AND CERTAIN OF
ITS SUBSIDIARIES PARTY THERETO ("BORROWERS")], the Persons (including Assignor)
identified as lenders thereto (collectively, the "Lenders" and each
individually, a "Lender"), the Agent, the Arranger, a certain Syndication Agent
and certain Documentation Agents;
WHEREAS, from and after the Assignment Effective Date (as defined below),
Assignee shall be a "Lender" for all purposes under the Loan Agreement and shall
benefit from all of the rights and obligations of a "Lender" under the Loan
Agreement and under any mortgages and other security documents in favor of the
Agent and the Lenders in connection therewith, whether now existing or hereafter
executed and delivered by any Borrower or any other Person (the Loan Agreement,
together with such mortgages and other security agreements, in each case, as the
same may be amended from time to time, the "Security Documents");
WHEREAS, pursuant to the Loan Agreement, Assignor has made and may from
time to time be required to make, Loans or other extensions of credit to or for
the account of the Borrowers;
WHEREAS, Assignor desires to assign to Assignee and Assignee desires to
assume from Assignor the rights of Assignor under the Loan Agreement with
respect to a portion of Assignor's Loan Commitment; and
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. Assignment.
Assignor hereby assigns to Assignee, without recourse, representation or
warranty (other than expressly provided herein), that percentage listed on Annex
I hereto as the "Assignee's Share" ("Assignee's Share") of all of Assignor's
rights, title and interest arising
under the Loan Agreement and the other Loan Documents relating to Assignor's
Loan Commitment, including, without limitation, all rights with respect to
Assignee's Share of the Revolving Credit Loans heretofore made by, and the Term
Loan owing to, Assignor and all rights with respect to Assignee's Share of all
Letters of Credit and LC Guaranties (collectively, "LCs") heretofore issued
under the Loan Agreement and in which Assignor has purchased a participating
interest (in each case without giving effect to any assignments or
participations thereof by Assignor). The dollar amount of Assignee's Share of
Assignor's Loan Commitment is listed on Annex I hereto, together with interest
rates payable on Assignee's Share of the Loans and other fees (if any) payable
to Assignee (collectively, the "Fees"). The respective Revolving Loan
Percentages and the respective pro rata shares of the Term Loan of each of
Assignor and Assignee from and after the Assignment Effective Date are listed on
Annex I hereto.
2. Assumption.
Assignee hereby assumes from Assignor all of Assignor's obligations
arising under the Loan Agreement and the other Loan Documents relating to
Assignee's Share of Assignor's Loan Commitment, the outstanding Revolving Credit
Loans, LCs and the Term Loan. It is the intent of the parties hereto that
Assignor shall be released from all of its obligations under the Loan Agreement
and the other Loan Documents relating to Assignee's Share of Assignor's Loan
Commitment, Revolving Credit Loans, LCs and the Term Loan pursuant to the terms
of the Loan Agreement.
3. Payment of Interest and Fees to Assignee.
(a) Assignor hereby advises the Agent of the assignment of Assignee's
Share of Assignor's Loan Commitment and the outstanding Loans and LCs and
directs the Agent to pay Assignee (i) on any payment of interest on any Loans
paid by, or on behalf of, any Borrower pursuant to the Loan Agreement and
attributable to Assignee's Share of such Loans those rates of interest, as
applicable, specified in Annex I hereto, and (ii) any fees paid by, or on
behalf, of any Borrower and attributable to Assignee's Share of the Loan
Commitment, Loans and LCs which are Fees specified in Annex I hereto. To the
extent the amount of any interest or fees paid by, or on behalf of, any Borrower
under the Loan Agreement in respect of the Assignee's Share is greater than such
amount payable to Assignee under this Assignment and Acceptance, Assignee hereby
directs the Agent to pay the difference directly to Assignor as an
administrative fee. Notwithstanding anything to the contrary contained in this
Assignment and Acceptance, the Agent shall have no liability or obligation to
pay any amounts to Assignee except as provided in the Loan Agreement and subject
to the Agent's receipt of monies paid by, or on behalf of, the Borrowers for the
account of Assignee.
(b) If the Loan Agreement shall be amended after the date hereof so as to
raise or reduce the rate or rates of interest payable on any Loan during any
period or the rate at which the Fees are payable or if an Event of Default shall
raise the rate of interest payable on any Loan or the rate at which any Fee is
payable for any period, then the rate or rates at which
-2-
interest or Fees, as the case may be, shall be distributable to Assignee
hereunder for such period shall be raised or reduced to the same extent.
(c) Notwithstanding anything to the contrary contained in this Assignment
and Acceptance, if and when Assignor receives or collects any payment of
interest on any Loan attributable to Assignee's Share or any payment of Fees
attributable to Assignee's Share which, in any such case, are required to be
paid to Assignee pursuant to clause (a) above, Assignor shall distribute to
Assignee such payments but only to the extent of such interest or Fees accrued
after the Assignment Effective Date.
(d) Notwithstanding anything to the contrary contained in this Assignment
and Acceptance, if and when Assignee receives or collects any payment of
interest on any Loan or any payment of Fees which in any such case are required
to be paid to Assignor pursuant to clause (a) above, Assignee shall distribute
to Assignor such payment.
(e) The Agent by its execution hereof, consents to the assignments
described above and agrees to make payments in respect of interest and Fees as
described in said clause (a) above. The Arranger by its execution hereof,
consent to the assignments described above.
4. Payments on Assignment Effective Date.
In consideration of the assignment by Assignor to Assignee of Assignee's
Share of Assignor's Loan Commitment, Loans and LCs as set forth above, (a)
Assignee agrees to pay to Assignor on or prior to the Assignment Effective Date
an amount specified by Assignor in writing on or prior to the Assignment
Effective Date which represents Assignee's Share of the principal amount of
Loans made by Assignor pursuant to the Loan Agreement and outstanding on the
Assignment Effective Date and (b) Assignor agrees to pay to Assignee the Closing
Fee (if any) specified in Annex I hereto on the date specified in Annex I
hereto.
5. Effectiveness.
(a) This Assignment and Acceptance shall become effective as of the date
listed on Annex I as the Assignment Effective Date (the "Assignment Effective
Date") upon (i) execution of this Assignment and Acceptance by Assignor,
Assignee, the Agent, the Arranger [AND THE BORROWERS] (whether the same or
different copies), (ii) payment by Assignee to Assignor of the amount described
in clause (a) of Section 4 above and (iii) payment by the Assignor to the Agent
of the $3,500 processing and recordation fee specified in subsection 11.9.1 of
the Loan Agreement.
(b) It is agreed that all interest on any Loans attributable to Assignee's
Share and all Fees attributable to Assignee's Share, which, in each case,
accrues on and after the Assignment Effective Date shall be paid directly to
Assignee in the manner set forth in Section 3 above.
-3-
6. Representations and Warranties.
(a) Each of Assignor and Assignee represents and warrants to the other
party as follows:
(1) it has full power and authority and has taken all action necessary, to
execute and deliver this Assignment and Acceptance and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
Assignment and Acceptance;
(2) the making and performance by it of this Assignment and Acceptance and
all documents required to be executed and delivered by it hereunder do not
and will not violate any law or regulation of the jurisdiction of its
incorporation or organization or any other law or regulation applicable to
it;
(3) this Assignment and Acceptance has been duly executed and delivered by
it and constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and
(4) all approvals, authorizations, or other actions by, or filing with,
any governmental authority necessary for the validity or enforceability of
its obligations under this Assignment and Acceptance have been obtained.
(b) Assignor represents and warrants to Assignee that Assignee's Share of
Assignor's Loan Commitment, Loans and LCs being assigned hereunder are subject
to no liens or security interests created by Assignor.
7. Miscellaneous.
(a) Assignor shall not be responsible to Assignee for the execution (by
any party other than Assignor), effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of the Loan Agreement, the other
Loan Documents or any of the agreements, documents or instruments executed
and/or delivered in connection therewith (collectively, the "Financing
Documents") or for any representations, warranties, recitals or statements made
therein or in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents made or
furnished or made available by Assignor to Assignee or by or on behalf of any
Borrower or any other person obligated under the Financing Documents
(collectively, the "Credit Parties") to Assignor or Assignee in connection with
the Financing Documents and the transactions contemplated thereby. Assignor
shall not be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the proceeds of the
Loans or LCs as to the existence or possible existence of any default (matured
or unmatured) under the Loan Documents.
-4-
(b) Assignee represents and warrants that it has made its own independent
investigation of the financial condition and affairs of the Credit Parties in
connection with the making of the Loans and the assignment of Assignee's Share
of Assignor's Loan Commitment, Loans and LCs to Assignee hereunder and has made
and shall continue to make its own appraisal of the creditworthiness of the
Credit Parties. Assignor shall have no duty or responsibility either initially
or on a continuing basis to make any such investigation or any such appraisal on
behalf of Assignee or to provide Assignee with any credit or other information
with respect thereto, whether coming into its possession before the making of
Loans or at any time or times thereafter and shall further have no
responsibility with respect to the accuracy of, or the completeness of, any
information provided to Assignee, whether by Assignor or by or on behalf of any
Credit Party.
(c) Assignee represents to Assignor, Agent and Borrower that it is either
(i) organized under the laws of the United States or a state thereof (a "US
Bank") or (ii) if Assignee is not a US Bank, under applicable law and treaties,
no withholding or other Taxes will be required to be withheld by Agent, Borrower
or Assignor with respect to any payments to be made to Assignee in respect of
the interests transferred hereunder. If Assignee is not a US Bank, Assignee
agrees to furnish to each of Assignor, Agent and Borrower (A) either United
States Internal Revenue Service Form W-8BEN or Form W-8ECI (wherein Assignee
claims entitlement to complete exemption from the United States federal
withholding tax on all interest payments hereunder) and (B) a new Form W-8BEN or
Form W-8ECI upon the obsolescence of any previously delivered form and
comparable statements in accordance with applicable United States laws and
regulations and amendments duly executed and completed by Assignee and to comply
from time to time with all applicable United Stated laws and regulations with
regard to such withholding tax exemption.
(d) ANY DISPUTE AMONG AGENT, ASSIGNOR AND ASSIGNEE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS AND NOT THE CONFLICTS OF LAW PROVISIONS OF THE STATE OF
ILLINOIS.
(e) No term or provision of this Assignment and Acceptance may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the parties to this Assignment and Acceptance.
(f) This Assignment and Acceptance may be executed in one or more
counterparts, each of which shall be an original but all of which, taken
together, shall constitute one and the same instrument.
(g) Assignor may at any time or from time to time grant to others
assignments or participations in its Loan Commitment, Revolving Loans, LCs and
the Term
-5-
Loan in accordance with the terms of the Loan Agreement, but not in the portions
thereof assigned to Assignee pursuant to this Assignment and Acceptance.
(h) All payments hereunder or in connection herewith shall, unless
otherwise specified in Annex I hereto, be made in dollars and in immediately
available funds, if payable to Assignor, to the account of Assignor at its
office as designated in Annex I hereto, and if payable to Assignee, to the
account of Assignee, as designated in Annex I hereto. The address of Assignee
for notice purposes under the Loan Agreement shall be as set forth below its
signature on the signature pages hereof.
(i) This Assignment and Acceptance shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Neither of the parties hereto may assign or transfer any of its rights or
obligations under this Assignment and Acceptance without the prior consent of
the other party. The preceding sentence shall not limit the right of Assignee to
assign all or part of Assignee's Share of Assignor's Loan Commitment and any
outstanding Loans and LCs assigned under this Assignment and Acceptance in the
manner contemplated by the Loan Agreement.
(j) All representations and warranties made herein and indemnities
provided for herein shall survive the consummation of the transactions
contemplated hereby.
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
and Acceptance as the date first above written.
Assignor:
------------------------------------
By
---------------------------------
Title
------------------------------
Assignee:
------------------------------------
By
---------------------------------
Title
------------------------------
Address for notices:
------------------------------------
------------------------------------
Attention:
--------------------------
Facsimile No.: ( ) -
Acknowledged and consented to
as of ____________, 20__
FLEET CAPITAL CORPORATION,
as Agent
By
------------------------------
Title
---------------------------
Acknowledged and consented to
as of , 20
FLEET SECURITIES, INC.,
as Arranger
By
------------------------------
Title
---------------------------
-7-
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
NEENAH FOUNDRY COMPANY
BY
------------------------------
TITLE ]
---------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ FOUNDRY, INC.
BY
------------------------------
TITLE ]
---------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ FORGE CORPORATION
BY
------------------------------
TITLE ]
---------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ CORPORATION
BY
------------------------------
TITLE ]
---------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ CORPORATION, STRYKER
MACHINING FACILITY CO.
BY
------------------------------
-8-
TITLE ]
---------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ CORPORATION, WARSAW
MANUFACTURING FACILITY
BY
------------------------------
TITLE ]
---------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
ADVANCED CAST PRODUCTS, INC.
BY
------------------------------
TITLE ]
---------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇ INDUSTRIES, INC.
BY
------------------------------
TITLE ]
---------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
NEENAH TRANSPORT, INC.
BY
------------------------------
TITLE ]
---------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ CORPORATION,
▇▇▇▇▇▇▇ VILLE MANUFACTURING
-9-
FACILITY
BY
------------------------------
TITLE ]
---------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
A & M SPECIALTIES, INC.
BY
------------------------------
TITLE ]
---------------------------
-10-
Annex I
to
Assignment and Acceptance
1. Borrower: Neenah Foundry Company
▇▇▇▇▇▇ Foundry, Inc.
▇▇▇▇▇▇ Forge Corporation
▇▇▇▇▇▇ Corporation
▇▇▇▇▇▇ Corporation, Stryker Machining Facility ▇▇▇▇▇▇
Corporation, Warsaw Manufacturing Facility
Advanced Cast Products, Inc.
▇▇▇▇▇ Industries, Inc.
Neenah Transport, Inc.
▇▇▇▇▇▇ Corporation, Kendallville Manufacturing Facility
A & M Specialties, Inc.
2. Date of Loan Agreement: October , 2003
3. Assignor:
--------------------------------
4. Assignee:
--------------------------------
5. Date of Assignment and Acceptance: , 20
------------- --
6. Assignment Effective Date: , 20
---------------- --
7. Assignee's Share: % of Assignor's Loan Commitment
-----
8. Amounts:
a. Assignor's Loan Commitment $
-------------
b. Assignee's Share of Assignor's Loan Commitment %
-------------
c. Assignee's Loan Commitment $
-------------
d. Revolving Loans made by Assignor to Borrower
outstanding as of Assignment Effective Date $
-------------
e. Amount of Outstanding Revolving Loans Assigned to
Assignee $
-------------
f. Assignor's Participation in LCs as of Assignment
Effective Date $
-------------
g. Amount of Participation in LCs Assigned to
Assignee $
-------------
h. Amount of Outstanding Term Loan $
-------------
i. Amount of Outstanding Term Loan Assigned to
Assignee $
-------------
9. Percentages (from and after Assignment Effective Date):
a. Assignor's Revolving Loan Percentage %
-------------
b. Assignee's Revolving Loan Percentage %
-------------
c. Assignor's Pro Rata Share of Term Loan %
-------------
d. Assignee's Pro Rata Share of Term Loan %
-------------
10. Interest Rates: [PER SECTION 2
OF LOAN AGREEMENT]
11. Fees:
a. Letter of Credit and LC Guaranty Fees [PER SECTION 2.4
OF LOAN AGREEMENT]
b. Unused Line Fee [PER SECTION 2.5
OF LOAN AGREEMENT]
12. Closing Fee Payable by Assignor to Assignee: $ , payable
on , 20
13. Payment Instructions:
Assignor:
-------------------------------------
-------------------------------------
ABA #:
-------------------------------
Account #:
---------------------------
Account Title:
-----------------------
Reference:
---------------------------
Assignee:
-------------------------------------
-------------------------------------
ABA #:
-------------------------------
Account #:
---------------------------
Account Title:
-----------------------
Reference:
---------------------------
Assignee: Assignor:
--------------------------------------- ------------------------------------
By: By:
------------------------------------ ---------------------------------
Title: Title:
--------------------------------- ------------------------------
Agent:
FLEET CAPITAL CORPORATION
By
------------------------------------
Title
---------------------------------
Arranger:
FLEET SECURITIES, INC.
By
------------------------------------
Title
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
NEENAH FOUNDRY COMPANY
BY
------------------------------------
TITLE ]
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ FOUNDRY, INC.
BY
------------------------------------
TITLE ]
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ FORGE CORPORATION
BY
------------------------------------
TITLE ]
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ CORPORATION
BY
------------------------------------
TITLE ]
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ CORPORATION, STRYKER
MACHINING FACILITY CO.
BY
------------------------------------
TITLE ]
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ CORPORATION, WARSAW
MANUFACTURING FACILITY
BY
------------------------------------
TITLE ]
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
ADVANCED CAST PRODUCTS, INC.
BY
------------------------------------
TITLE ]
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇ INDUSTRIES, INC.
BY
------------------------------------
TITLE ]
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
NEENAH TRANSPORT, INC.
BY
------------------------------------
TITLE ]
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
▇▇▇▇▇▇ CORPORATION,
▇▇▇▇▇▇▇ VILLE MANUFACTURING FACILITY
BY
------------------------------------
TITLE ]
---------------------------------
[ACKNOWLEDGED AND CONSENTED TO
AS OF , 20
A & M SPECIALTIES, INC.
BY
------------------------------------
TITLE ]
---------------------------------
