Exhibit 10.1
AMENDMENT NO. 1 TO
LOAN AND SECURITY AGREEMENT
This Amendment No. 1 to Loan and Security Agreement (this "Amendment")
dated July 28, 2005, is by and among Borrowers (as defined below), the
undersigned Lenders and Fleet Capital Corporation, as Agent for the Lenders who
are from time to time party to that certain Loan and Security Agreement (as
amended from time to time, and as amended hereby, the "Loan Agreement") dated as
of October 8, 2003, by and among Neenah Foundry Company, a Wisconsin corporation
("Neenah"), as a Borrower, the Subsidiaries of Neenah that are party thereto as
Borrowers (Neenah and such Subsidiaries are collectively, "Borrowers" and each,
a "Borrower"), Fleet Capital Corporation, as Agent and as a Lender, Congress
Financial Corporation (Central), as Syndication Agent and as a Lender, General
Electric Capital Corporation, as Documentation Agent and as a Lender, and the
other Lenders party thereto. All capitalized terms used in this Amendment and
not otherwise defined in this Amendment shall have the same meanings herein as
in the Loan Agreement.
Borrowers have requested that Agent and Lenders agree to amend certain
provisions of the Loan Agreement, as more particularly set forth herein.
Subject to each of the terms and conditions set forth herein, Agent
and the undersigned Lenders have agreed to the requests described above.
Now, therefore, the parties hereto hereby agree as follows:
1. Amendments. Subject to the prior satisfaction of the conditions set
forth in Section 2 of this Amendment, and in reliance on the representations and
warranties set forth in Section 3 of this Amendment, the parties hereto agree to
the following amendments to the Loan Agreement:
(a) Section 2.6 (Prepayment Fee) of the Loan Agreement is hereby
amended and restated in its entirety as follows:
"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 0.50% 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 second, third or fourth 12 month period of
the Term (October 8, 2004 through October 7, 2007). 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, 2007, no such prepayment fee shall be payable."
(b) Section 4.1 (Term of Agreement) of the Loan Agreement is hereby
amended and restated in its entirety as follows:
"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 through and including October 8, 2009 (the "Term"),
unless terminated as provided in Section 4.2 hereof."
(c) The reference to the amount of "$17,500,000" contained in each of
clause (i)(c)(2) and (i)(c)(3) of subsection 8.2.6 (Payments and Amendments of
Certain Debt) of the Loan Agreement is hereby deleted and replaced with a
reference to the amount of "$15,000,000".
(d) The reference to the amount of "$15,000,000" contained in clause
(i)(d)(1) of subsection 8.2.6 (Payments and Amendments of Certain Debt) of the
Loan Agreement is hereby deleted and replaced with a reference to the amount of
"$20,000,000".
(e) The word "and" at the end of clause (vi) of subsection 8.2.9
(Disposition of Assets) of the Loan Agreement is hereby replaced with a ";", the
"." at the end of clause (vii) of subsection 8.2.9 is hereby replaced with a ";"
and the following clauses (viii) and (ix) are hereby added to subsection 8.2.9:
"(viii) a Permitted Xxxxx Sale; and
(ix) a Permitted Xxxxxx Sale."
(f) The first sentence of Section 8.3 (Specific Financial Covenants)
of the Loan Agreement is hereby amended and restated in its entirety as follows:
"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; provided, however,
that such financial covenants shall not be tested for a fiscal period where
Availability exceeds $25,000,000 at all times during the period beginning
on the first day of the final fiscal quarter in such fiscal period and
ending on the day that the financial statements for such fiscal period are
delivered in accordance with subsection 8.1.3(ii) of the Agreement."
(g) The definition of Applicable Margin contained in Appendix A to the
Loan Agreement is hereby amended and restated in its entirety as follows:
"Applicable Margin - from the Amendment No. 1 Effective 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 0.25%
Base Rate Term Portion 0.75%
LIBOR Revolving Portion 1.75%
LIBOR Term Portion 2.25%
Unused Line Fee 0.375%
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 June 30, 2005 (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:
Base Rate Base Rate LIBOR LIBOR Unused
--------- --------- ----- ----- ------
Financial Measurement Revolving Term Revolving Term Line Fee
--------------------- --------- ---- --------- ---- --------
Portion Portion Portion Portion
------- ------- ------- -------
Less than 1.15 to 1.00 1.00% 1.50% 2.50% 3.00% 0.500%
Greater than or equal to 1.15 to 0.75% 1.25% 2.25% 2.75% 0.500%
1.00 and less than 1.25 to 1.00
Greater than or equal to 1.25 to 0.50% 1.00% 2.00% 2.50% 0.375%
1.00 and less than 1.45 to 1.00
Greater than or equal to 1.45 to 1.00 0.25% 0.75% 1.75% 2.25% 0.375%
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.
The amendments made to this definition of Applicable Margin pursuant
to that certain Amendment No. 1 to the Agreement dated as of the Amendment
No. 1 Effective Date shall govern the amount of interest accruing on and
after the Amendment No. 1 Effective Date, but shall not alter the amount of
interest which has accrued under the Agreement prior to the Amendment No. 1
Effective Date."
(h) The following definition of Amendment No. 1 Effective Date is
hereby added to Appendix A to the Loan Agreement, inserted in appropriate
alphabetical order:
"Amendment No. 1 Effective Date - July 28, 2005."
(i) The following definition of Permitted Xxxxx Sale is hereby added
to Appendix A to the Loan Agreement, inserted in appropriate alphabetical order:
"Permitted Xxxxx Sale - a sale of all of the capital stock of Xxxxx,
or all or substantially all of the assets of Xxxxx, where (i) no Default or
Event of Default exists or would result from the consummation of such sale,
(ii) such sale is consummated on terms, and pursuant to documentation, that
are satisfactory in form and substance to Agent in its reasonable
discretion, (iii) at least five (5) Business Days prior to the consummation
of such sale, Agent has received substantially final versions of the
documentation that will evidence the same, (iv) the net cash proceeds
received in such sale are greater than or equal to $11,000,000 and (v) all
of the net cash proceeds received from such sale are first applied to the
installments of principal due under the Term Notes ratably, to be applied
to future installment payments on a ratable basis (it being agreed and
understood that the foregoing shall apply notwithstanding any provisions in
subsection 3.3.1 of the Agreement to the contrary, with any remaining net
cash proceeds after the Term Notes have been repaid in full to then be
applied in accordance with subsection 3.3.1 of the Agreement)."
(j) The following definition of Permitted Xxxxxx Sale is hereby added
to Appendix A to the Loan Agreement, inserted in appropriate alphabetical order:
"Permitted Xxxxxx Sale - a sale of all of the capital stock of Xxxxxx,
or all or substantially all of the assets of Xxxxxx, where (i) no Default
or Event of Default exists or would result from the consummation of such
sale, (ii) such sale is consummated on terms, and pursuant to
documentation, that are
satisfactory in form and substance to Agent in its reasonable discretion,
(iii) at least five (5) Business Days prior to the consummation of such
sale, Agent has received substantially final versions of the documentation
that will evidence the same, (iv) such sale occurs on or prior to December
31, 2005, (v) in connection with the consummation of such sale, the
principal balance of the Term Loan shall be repaid in an amount of not less
than $1,700,000 and (vi) all of the net cash proceeds received from such
sale are first applied to the installments of principal due under the Term
Notes ratably, to be applied to future installment payments on a ratable
basis (it being agreed and understood that the foregoing shall apply
notwithstanding any provisions in subsection 3.3.1 of the Agreement to the
contrary, with any remaining net cash proceeds after the Term Notes have
been repaid in full to then be applied in accordance with subsection 3.3.1
of the Agreement)."
(k) The definition of Revolving Credit Maximum Amount contained in
Appendix A to the Loan Agreement is hereby amended and restated in its entirety
as follows:
"Revolving Credit Maximum Amount - at any time, the difference between
(i) $92,085,000 minus (ii) the outstanding principal balance of the Term
Loan at such time, as such amount may be reduced from time to time pursuant
to the terms of this Agreement."
(l) The definition of EBITDA contained in Exhibit 8.3 to the Loan
Agreement is hereby amended and restated in its entirety as follows:
"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, (c) one-time cash
expenses relating to the closing of the facility of Xxxxxx Corporation,
Kendallville Manufacturing Facility located at 000 Xxxx Xxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxx of up to a maximum aggregate amount of $4,000,000 and
(d) the fees, costs and expenses actually incurred in connection with the
sale of Xxxxxx Forge Corporation, in the actual amounts of up to a maximum
aggregate of $2,500,000 during the actual fiscal periods incurred; 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."
2. Conditions to Effectiveness. The effectiveness of this Amendment
shall be subject to the prior satisfaction of the following conditions:
(a) Agent shall have received an execution version of this Amendment
signed by the parties hereto;
(b) Borrowers shall have delivered, or shall have caused to be
delivered, to Agent each of the documents, agreements and instruments set forth
on Exhibit A attached hereto, together with such other documents, agreements and
instruments as may be reasonably requested by Agent, each such document,
agreement and instrument in form and content reasonably acceptable to Agent; and
(c) no Default or Event of Default shall be in existence.
3. Representations and Warranties. To induce Agent and the Lenders
party hereto to execute and deliver this Amendment, each Borrower hereby
represents and warrants to Lenders that, after giving effect to this Amendment:
(a) All representations and warranties contained in the Loan Agreement
and the other Loan Documents are true and correct in all material respects on
and as of the date of this Amendment, in each case as if then made, other than
representations and warranties that expressly relate solely to an earlier date
(in which case such representations and warranties were true and accurate on and
as of such earlier date);
(b) No Default or Event of Default has occurred and is continuing; and
(c) The execution and delivery by such Borrower of this Amendment does
not require the consent or approval of any Person, except such consents and
approvals as have been obtained.
4. Post-Closing Agreement. Notwithstanding the condition set forth in
Section 2(b) above, Borrowers shall have until August 31, 2005 to deliver to
Agent (i) a good standing certificate for Xxxxxxx Corporation from the Secretary
of State of Massachusetts, (ii) good standing certificates for Xxxxxx Forge
Corporation and Advanced Cast Products, Inc. from the Secretary of State of
Pennsylvania, (iii) a good standing certificate and certified Articles of
Incorporation for A&M Specialties, Inc. from the Secretary of State of
Pennsylvania and (iv) either (x) a good standing certificate and certified
Articles of Incorporation of Cast Alloys, Inc. from the Secretary of California
or (y) upon Agent's prior consent, evidence that Cast Alloys, Inc. has been
dissolved.
5. Scope. This Amendment shall have the effect of amending the Loan
Agreement and the other Loan Documents as appropriate to express the agreements
contained herein. In all other respects, the Loan Agreement and the other Loan
Documents shall remain in full force and effect in accordance with their
respective term.
6. Reaffirmation and Confirmation. Each Borrower hereby ratifies,
affirms, acknowledges and agrees that the Loan Agreement and the other Loan
Documents represent the valid, enforceable and collectible obligations of such
Borrower, and each Borrower further acknowledges that there are no existing
claims, defenses, personal or otherwise, or rights of setoff whatsoever with
respect to the Loan Agreement or any of the Loan Documents. Each Borrower hereby
agrees that this Amendment in no way acts as a release or relinquishment of the
Liens and rights securing payments of the Obligations. The
Liens and rights securing payment of the Obligations are hereby ratified and
confirmed by each Borrower in all respects.
7. Counterparts. This Amendment may be executed in counterpart and by
different parties hereto in separate counterparts, each of which, when taken
together, shall constitute but one and the same instrument.
8. Expenses. All of Agent's reasonable costs and expenses, including,
without limitation, attorney's fees, incurred in connection with the preparation
of this Amendment and all related documents shall be paid by Borrowers upon the
request of Agent.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first above written.
BORROWERS:
NEENAH FOUNDRY COMPANY
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
XXXXXX FOUNDRY, INC.
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
XXXXXX FORGE CORPORATION
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
XXXXXX CORPORATION
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
XXXXXX CORPORATION, STRYKER
MACHINING FACILITY CO.
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
Signature Page to Amendment No. 1
XXXXXX CORPORATION, WARSAW
MANUFACTURING FACILITY
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
ADVANCED CAST PRODUCTS, INC.
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
XXXXX INDUSTRIES, INC.
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
A & M SPECIALTIES, INC.
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
NEENAH TRANSPORT, INC.
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
XXXXXX CORPORTION, KENDALLVILLE
MANUFACTURING FACILITY
By: /s/ Xxxx XxXxxx
Its: Corporate V-P Finance & CFO
Signature Page to Amendment No. 1
FLEET CAPITAL CORPORATION, as Agent and
as a Lender
By: /s/ Xxxxxx X. Xxxx
Its: Senior Vice President
WACHOVIA CAPITAL FINANCE
CORPORATION (CENTRAL) (f/k/a
Congress Financial Corporation
(Central)), as Syndication Agent
and as a Lender
By: Xxxxx X. Xxxxxxxx
Its: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By: /s/ [Illegible]
Its: Duly Authorized Signatory
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ [Illegible]
Its: Vice president
Signature Page to Amendment No. 1
