SUBORDINATED SECURITY AGREEMENT
THIS SUBORDINATED SECURITY AGREEMENT is made as of the 8th day
of October, 2003 by Neenah Foundry Company, a Wisconsin corporation ("Issuer"
and a "Grantor"), and each of the other entities listed on the signature pages
hereof (each, a "Grantor" and collectively, together with Issuer, the
"Grantors") in favor of The Bank of New York, a New York banking corporation, as
Trustee (the "Trustee") for the noteholders (the "Noteholders") under the
Indenture (as defined below). The Trustee's address is 000 Xxxxxxx Xxxxxx, 0xx
Xxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000.
1. DEFINITIONS.
As used in this Agreement:
"Account Debtor" shall mean any Person who is or may become
obligated under or on account of any Account, Contract Right, Chattel Paper or
General Intangible.
"Agreement" shall mean this Security Agreement, as it may be
amended, modified or supplemented from time to time.
"Code" shall mean the Uniform Commercial Code as in effect in
the State of New York on the date hereof, as it may be amended or otherwise
modified.
"Collateral" shall mean all of the Property and interests in
Property described in Section 2 of this Agreement, and all other property that
now or hereafter secures the payment and performance of any of the Obligations.
"Contract Right" shall mean any right of Issuer or any Grantor
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.
"Default" shall have the meaning provided to such term in
Section 4.1 of this Agreement.
"Guaranty" shall mean the Subsidiary Guarantee as defined in
the Indenture, as such Subsidiary Guarantee may be amended, modified or
supplemented from time to time.
"Guaranty Documents" shall mean, collectively, this Agreement,
the Guaranty, the Indenture and all other agreements, instruments and documents
now or hereafter executed and/or delivered by any Grantor to Trustee or any
Noteholder in order to evidence or secure the Obligations, as each may be
amended, modified or supplemented from time to time.
"Indenture" shall mean that certain Indenture dated as of the
date hereof (as may be amended, modified or supplemented from time to time) by
and among Issuer, the Subsidiary
Guarantors party thereto and the Trustee pursuant to which Issuer has issued its
11% senior secured notes due September 30, 2010 in the aggregate principal
amount of $133,130,000.
"Loan Agreement Termination" shall mean the payment in full of
the Senior Indebtedness.
"Obligations" shall mean all obligations with respect to the
Guaranty and all other indebtedness, liabilities, obligations, covenants and
duties arising due or payable from each Grantor to Trustee or any Noteholder of
any kind or nature, present or future, arising under the Guaranty or any of the
other Guaranty Documents, 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. The term includes,
without limitation, all interest, charges, expenses, fees, attorneys' fees and
any other sums chargeable to each Grantor under the Guaranty, this Agreement or
any of the other Guaranty Documents.
The foregoing definitions shall be equally applicable to the
singular and plural forms of the defined terms. Capitalized terms used in this
Agreement without definition and defined in the Indenture shall have the
meanings ascribed to such terms in the Indenture, it being understood and
acknowledged that any such capitalized terms defined in the Indenture describing
property or interests in property of Issuer or a Subsidiary Guarantor
(including, without limitation, capitalized terms used in Section 2.1 of this
Agreement) shall be construed herein to refer to property or interests in
property of each Grantor. Terms used in this Agreement and not defined herein or
in the Indenture shall have the meanings given such terms in the Code.
2. SECURITY INTEREST.
2.1. Security Interest in Collateral. To secure the prompt
payment and performance to Trustee and each Noteholder of the Obligations, each
Grantor hereby grants to Trustee for the benefit of itself and each Noteholder a
continuing Lien upon all of such Grantor's assets, including all of the
following Property and interests in Property of such Grantor, whether now owned
or existing or hereafter created, acquired or arising and wheresoever located:
(a) Accounts;
(b) Certificated Securities;
(c) Chattel Paper;
(d) 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;
(e) Contract Rights;
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(f) Deposit Accounts;
(g) Documents;
(h) Equipment;
(i) Financial Assets;
(j) Fixtures;
(k) General Intangibles, including Payment Intangibles
and Software;
(l) Goods (including all of its Equipment, Fixtures and
Inventory), and all accessions, additions,
attachments, improvements, substitutions and
replacements thereto and therefor;
(m) Instruments;
(n) Intellectual Property;
(o) Inventory;
(p) Investment Property;
(q) money (located in every jurisdiction whatsoever);
(r) Letter-of-Credit Rights;
(s) Payment Intangibles;
(t) Security Entitlements;
(u) Software;
(v) Supporting Obligations;
(w) Uncertificated Securities; and
(x) 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) Trustee will
not enforce its Lien in any Grantor's rights under such lease, license,
contract,
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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 2.1 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 shall not constitute Collateral for so
long as such prohibition continues; it being understood that upon request of
Trustee, each Grantor will in good faith use reasonable efforts to obtain
consent for the creation of a Lien in favor of Trustee (and to Trustee'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.
2.2. Other Collateral.
2.2.1. Commercial Tort Claims. Each Grantor shall promptly
notify Trustee in writing upon having a Commercial Tort Claim that
arises after the Issue Date against any third party and, upon request
of Trustee, promptly enter into an amendment to this Agreement and do
such other acts or things reasonably deemed necessary by Trustee to
give Trustee a security interest in any such Commercial Tort Claim.
Each Grantor represents and warrants that as of the date of this
Agreement, to its knowledge, it does not possess any Commercial Tort
Claims.
2.2.2. Other Collateral. Each Grantor shall (i) prior to the
Loan Agreement Termination, from time to time (but in no event later
than four months from any event giving rise to the notice obligation)
and (ii) following the Loan Agreement Termination, promptly, notify
Trustee in writing upon acquiring or otherwise obtaining any Collateral
after the date hereof consisting of (1) Deposit Accounts, Investment
Property or Letter-of-Credit Rights in (or 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 Trustee and
subject to the Subordination Agreement, promptly execute such other
documents, and do such other acts or things deemed appropriate by
Trustee to deliver to Trustee "control" (as such term is defined in the
Code) with respect to such Collateral and (2) Documents or Instruments
in (or relating to) an amount in excess of $250,000 and, upon the
request of Trustee and subject to the Subordination Agreement, will
promptly execute such other documents, and do such other acts or things
deemed appropriate by Trustee to deliver to Trustee 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 Trustee; 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, subject
to the Subordination Agreement, obtain an acknowledgement from the
third party that it is holding the Collateral for the benefit of
Trustee.
2.2.3. Lien Perfection; Further Assurances. Each Grantor
shall execute such instruments, assignments or documents as are
necessary to perfect Trustee's Lien upon any of the Collateral and
shall take such other action as may be required to
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perfect or to continue the perfection of Trustee's Lien upon the
Collateral. Unless prohibited by applicable law, each Grantor hereby
authorizes Trustee to execute and file any such financing statement,
including, without limitation, financing statements that indicate the
Collateral (i) as all assets of such Grantor 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 2.1, on such Grantor's
behalf. Each Grantor also hereby ratifies its authorization for Trustee
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 Trustee's request, each Grantor
shall also promptly execute or cause to be executed and shall deliver
to Trustee any and all documents, instruments and agreements reasonably
deemed necessary by Trustee to give effect to or carry out the terms of
the Guaranty Documents.
2.2.4. Lien Subordination. Notwithstanding anything in this
Agreement to the contrary, the liens securing this Agreement are
subordinate in the manner and to the extent set forth in that certain
Lien Subordination Agreement (the "Subordination Agreement") dated as
of the date hereof among Trustee, Neenah Foundry Company ("Neenah") and
the other "Companies" (as defined therein) party thereto and Fleet
Capital Corporation ("Agent"), to the liens securing the indebtedness
(including interest) owed by the Companies pursuant to or in connection
with that certain Loan and Security Agreement dated as of the date
hereof among Neenah, certain of the other Companies, Agent and the
lenders from time to time party thereto, as such Loan and Security
Agreement may be amended, supplemented or otherwise modified from time
to time and to indebtedness refinancing the indebtedness under such
Loan and Security Agreement; and the Trustee (on behalf of itself and
each Noteholder), by its acceptance hereof, irrevocably agrees to be
bound by the provisions of the Subordination Agreement and each
agreement made therein by the Trustee on its behalf.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. [Intentionally Omitted]
3.2. Location of Collateral. All Collateral, other than
Inventory in transit and motor vehicles, will at all times be kept by the
Grantors at one or more of the business locations set forth in Exhibit 3.2
hereto, as updated by the Grantors providing prior written notice to Trustee of
any new location.
3.3. Accounts.
3.3.1. Records of Accounts. Each Grantor shall keep accurate
and complete records of its Accounts and all payments and collections
thereon and shall submit to Trustee on such periodic basis as Trustee
shall reasonably request a sales and collections report for the
preceding period.
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3.3.2. Account Verification. Any of Trustee's officers,
employees or agents shall have the right, at any time or times
hereafter, in the name of Trustee, any designee of Trustee or any
Grantor, to verify the validity, amount or any other matter relating to
any Accounts by mail, telephone, electronic communication or otherwise,
and each Grantor shall cooperate fully with Trustee in an effort to
facilitate and promptly conclude any such verification process;
provided, that so long as no Event of -------- Default has occurred and
is continuing, (a) Trustee shall provide each Grantor with reasonable
prior notice that Trustee will be conducting Account verifications (it
being understood that Trustee shall have no duty to identify any of the
specific Account debtors to be contacted by Trustee in connection
therewith), and (b) Trustee shall afford each Grantor the opportunity
to have an observational role with respect to any such Account
verifications (it being understood that no Grantor will have any right
to be an active participant with respect to any such Account
verifications).
3.4. Inventory. Each Grantor shall keep accurate and
complete records of its Inventory.
3.5. Equipment. Each Grantor shall keep accurate records
itemizing and describing the kind, type, quantity and book value of its
Equipment and all dispositions thereof. Promptly after the reasonable request
therefor by Trustee, each Grantor shall deliver to Trustee any and all evidence
of ownership, if any, of any of its Equipment.
4. DEFAULTS; RIGHTS AND REMEDIES ON DEFAULT.
4.1. Default. Each of the following occurrences shall
constitute a default under this Agreement (each, a "Default"):
(a) Breach of Indenture. The occurrence of any Event of
Default under the Indenture (it being agreed and
understood that, notwithstanding anything to the
contrary contained in the Indenture, a breach of any
of the terms of Section 2.2, Section 3.2, Section
3.3, Section 3.4 or Section 3.5 hereof shall only
result in a Default hereunder and an Event of Default
under the Indenture if such breach has not been cured
within 30 days after the sooner to occur of any
Grantor's receipt of notice of such breach from
Trustee or the date on which such breach first
becomes known to an officer of any such Grantor); or
(b) Breach under other Guaranty Documents. Any Grantor's
failure to pay when due any obligations of such
Grantor under the Guaranty, or the occurrence of any
breach of the terms and conditions contained in any
Guaranty Document other than, subject to Section
4.1(a) above, the Indenture.
4.2. Remedies. Subject to the Subordination Agreement,
upon the occurrence and during the continuance of an Event of Default, Trustee
shall have and may exercise from time to time the following other rights and
remedies:
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(a) 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 Trustee or
Noteholders 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 Guaranty Documents, and
none of which shall be exclusive.
(b) The right to take immediate possession of the
Collateral, and to (i) require any Grantor to
assemble the Collateral, at each Grantor's expense,
and make it available to Trustee at a place
designated by Trustee 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 Grantor,
each Grantor agrees not to charge Trustee for storage
thereof).
(c) 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 Trustee, in its sole discretion,
may deem advisable. Trustee may, at Trustee's option,
disclaim any and all warranties regarding the
Collateral in connection with any such sale. Each
Grantor agrees that 10 days' written notice to any
Grantor 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
Trustee may designate in said notice. Trustee shall
have the right to conduct such sales on each
Grantor's premises, without charge therefor, and such
sales may be adjourned from time to time in
accordance with applicable law. Trustee 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 Trustee, on behalf of
Noteholders, 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 a manner that
is consistent with the terms of the Indenture. If any
deficiency shall arise, the Grantors shall remain
liable to Trustee and Noteholders therefore. Any
surplus shall be remitted to whomsoever shall be
legally entitled to the same.
(d) Trustee 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 Grantor's 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
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Collateral and each Grantor's rights under all
licenses and all franchise agreements shall inure to
Trustee's benefit.
4.3. Remedies Cumulative; No Waiver. All covenants,
conditions, provisions, warranties, guaranties, indemnities, and other
undertakings of each Grantor contained in this Agreement and the other Guaranty
Documents, or in any document referred to herein or contained in any agreement
supplementary hereto or in any schedule or in any Guaranty Document given to
Trustee or any Noteholder or contained in any other agreement between any
Noteholder and any Grantor or between Trustee and any Grantor 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 each Grantor herein contained. The failure or delay of Trustee or
any Noteholder to require strict performance by any Grantor 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 each Grantor to Trustee and each
Noteholder have been fully satisfied. None of the undertakings, agreements,
warranties, covenants and representations of each Grantor contained in this
Agreement or any of the other Guaranty Documents and no Default or Event of
Default by any Grantor under this Agreement or any other Guaranty Documents
shall be deemed to have been suspended or waived by Noteholders, 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 Trustee and
directed to any such Grantor.
5. MISCELLANEOUS.
5.1. Power of Attorney.
Each Grantor hereby irrevocably designates, makes, constitutes
and appoints Trustee (and all Persons designated by Trustee) as such Grantor's
true and lawful attorney (and agent-in-fact), solely with respect to the matters
set forth in this Section 5.1, and Trustee, or Trustee's agent, may, subject to
the Subordination Agreement, without notice to any Grantor and in any Grantor's
or Trustee's name, but at the cost and expense of the Grantors:
5.1.1. [Intentionally Omitted]
5.1.2. At such time or times after the occurrence and during
the continuance of an Event of Default, as Trustee 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 each Grantor'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 Trustee deems advisable, and at
Trustee's option, with all warranties regarding the Collateral
disclaimed; (iv) prepare,
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file and sign any Grantor'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; (v) receive, open and dispose of all mail
addressed to any Grantor 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 Trustee 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 Trustee to each Grantor in accordance with written
instructions provided by any such Grantor; (vi) endorse the name of any
Grantor upon any of the items of payment or proceeds relating to any
Collateral and deposit the same to the account of Trustee on account of
the Obligations; (vii) endorse the name of any Grantor upon any chattel
paper, document, instrument, invoice, freight xxxx, xxxx of lading or
similar document or agreement relating to any Collateral; (viii) use
each Grantor's stationery and sign the name of each Grantor to
verifications of the Accounts and notices thereof to Account Debtors
(provided that Trustee shall deliver drafts of any such written
communication to each such Grantor prior to the delivery thereof to any
Account Debtors); (ix) 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; (x) make and adjust claims under policies of insurance to
the extent related to the Collateral; and (xi) do all other acts and
things necessary, in Trustee's determination, to fulfill each Grantor's
obligations under this Agreement.
The power of attorney granted hereby shall constitute a power
coupled with an interest and shall be irrevocable.
5.2. Indemnity. Each Grantor hereby agrees to indemnify
Trustee and each Noteholder (and each of their Affiliates) and hold Trustee and
each Noteholder (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 any Grantor's failure to observe, perform or discharge such
Grantor's duties hereunder, 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 Guaranty Document by, Trustee or such Noteholder. In
addition, each Grantor shall defend Trustee and each Noteholder (and each of
their Affiliates) against and hold it harmless from all claims of any Person
with respect to the Collateral (except those resulting from the gross negligence
or intentional misconduct of, or breach of the terms of this Agreement or any
other Loan Document by, any such Person). Without limiting the generality of the
foregoing, each Grantor shall indemnify and hold harmless Trustee and each
Noteholder (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,
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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 Trustee or such Noteholder. Notwithstanding any contrary
provision in this Agreement, the obligation of each Grantor under this Section
5.2 shall survive the payment in full of the non-indemnity Obligations and the
termination of this Agreement. In connection with its appointment and acting
hereunder, the Trustee is entitled to all rights, privileges, benefits,
protections, immunities and indemnities provided to it under the Indenture.
5.3. Complete Agreement; Sale of Interest.
(a) The Guaranty Documents constitute the complete
agreement among the parties with respect to the
subject matter hereof and may not be modified,
altered or amended, except by an agreement in writing
signed by each Grantor and Trustee. No Grantor may
sell, assign or transfer any interest in this
Agreement or any of the other Guaranty Documents, or
any of the Obligations or any portion thereof,
including, without limitation, any Grantor's rights,
title, interests, remedies, powers and duties
hereunder or thereunder.
(b) Each Grantor hereby consents to any Noteholder's
participation, sale, assignment, transfer or other
disposition, at any time or times hereafter, of this
Agreement, the Indenture, any of the other Guaranty
Documents or any of the Obligations, or of any
portion hereof or thereof, including, without
limitation, such Noteholder's rights, title,
interests, remedies, powers and duties hereunder or
thereunder.
5.4. Modification of Agreement. No amendment, modification
or waiver of any provision of this Agreement or any other Guaranty Document nor
consent to any departure by any Grantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by Trustee and each
Grantor, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
5.5. Reimbursement of Expenses. If, at any time or times
regardless of whether or not an Event of Default then exists, (i) Trustee 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 Guaranty Documents or any amendment of or
modification of this Agreement or any of the other Guaranty Documents or (2) the
administration of this Agreement or any of the other Guaranty Documents and the
transactions contemplated hereby and thereby; or (ii) Trustee or any Noteholder
incurs reasonable and documented legal or accounting expenses or any other costs
or out-of-pocket expenses in connection with (1) any litigation, contest,
dispute, suit, proceeding or action (whether instituted by Trustee, any
Noteholder, any Grantor or any other Person) relating to the Collateral, this
Agreement or any of the other Guaranty Documents or any Grantor's affairs; (2)
any attempt to enforce any rights of Trustee or any
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Noteholder against any Grantor or any other Person which may be obligated to
Trustee or any Noteholder by virtue of this Agreement or any of the other
Guaranty Documents, including, without limitation, the Account Debtors; or (3)
any 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 Trustee
or any Noteholder, as applicable, shall be charged to the Grantors; provided,
that no Grantor shall 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 of Trustee or any Noteholder. All amounts chargeable to any
Grantor under this Section 5.5 shall be Obligations secured by all of the
Collateral, shall be payable within 15 days following demand to Trustee or such
Noteholder, as the case may be, and shall bear interest from the date due and
owing until paid in full at the rate set forth in the Indenture. The Grantors
shall also reimburse Trustee for expenses incurred by Trustee in its
administration of the Collateral to the extent and in the manner provided in the
Indenture.
5.6. 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.
5.7. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the successors and assigns of each
Grantor, Trustee and each Noteholder.
5.8. 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:
If to Trustee: The Bank of New York
000 Xxxxxxx Xxxxxx, 0xx Xxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Fax No.: (000) 000-0000
If to any Grantor: c/o Neenah Foundry Company
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxx XxXxxx
Fax No.: (000) 000-0000
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With a copy to: Xxxxxxxx & Xxxxx LLP
Citigroup Center
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
or to such other address as each party may designate for itself by notice given
in accordance with this Section 5.8.
5.9. Release; Termination.
5.9.1. Upon any sale, lease, transfer or other disposition
of any item of Collateral that is consummated in compliance with the
Subordination Agreement or the Indenture, Trustee shall execute and
deliver such documents that the Grantors may reasonably request to
evidence the release of any such item of Collateral from the security
interests granted hereunder.
5.9.2. Upon termination of the Indenture and payment in full
of all Obligations (other than contingent indemnity obligations), the
security interests granted hereunder shall terminate and all rights to
the Collateral shall revert back to the Grantors. Upon such
termination, Trustee shall execute and deliver such documents that the
Grantors may reasonably request to evidence such termination.
5.10. Interpretation. No provision of this Agreement or any
of the other Guaranty 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 been
structured, drafted or dictated such provision.
5.11. Governing Law; Consent to Forum. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK (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 NEW YORK, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD,
MANNER AND PROCEDURE FOR FORECLOSURE OF TRUSTEE'S LIEN UPON SUCH COLLATERAL AND
THE ENFORCEMENT OF TRUSTEE'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 NEW YORK. AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED,
AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS
OF ANY GRANTOR, TRUSTEE OR ANY NOTEHOLDER, EACH GRANTOR HEREBY CONSENTS AND
AGREES THAT THE COURTS OF THE STATE OF NEW YORK, OR, AT TRUSTEE'S OPTION, THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY
GRANTOR ON THE ONE HAND AND
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TRUSTEE OR ANY NOTEHOLDER 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
GRANTOR IS A PARTY) TO THE CONTRARY, EACH GRANTOR EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND EACH GRANTOR HEREBY WAIVES ANY OBJECTION WHICH ANY GRANTOR MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS. EACH GRANTOR 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 GRANTOR AT THE ADDRESS SET FORTH IN THIS
AGREEMENT OR OTHERWISE PROVIDED TO TRUSTEE 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 GRANTOR'S ACTUAL RECEIPT THEREOF OR 5 BUSINESS DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF TRUSTEE OR ANY NOTEHOLDER TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE
ENFORCEMENT BY TRUSTEE OR ANY NOTEHOLDER 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.
5.12. Waivers. EACH GRANTOR IRREVOCABLY WAIVES (A) THE
RIGHT TO TRIAL BY JURY (WHICH TRUSTEE HEREBY ALSO WAIVES) IN ANY ACTION, SUIT,
PROCEEDING OF COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
AGREEMENT, OR ANY OF THE OTHER GUARANTY DOCUMENTS, THE OBLIGATIONS OR THE
COLLATERAL; (B) 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 TRUSTEE
OR ANY NOTEHOLDER, ON WHICH ANY GRANTOR MAY IN ANY WAY BE LIABLE AND HEREBY
RATIFIES AND CONFIRMS WHATEVER TRUSTEE OR ANY NOTEHOLDER MAY DO IN THIS REGARD;
(C) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND
OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING TRUSTEE TO
EXERCISE ANY REMEDIES HEREUNDER; (D) THE BENEFIT OF ALL VALUATION, APPRAISEMENT
AND EXEMPTION LAWS AND (E) NOTICE OF ACCEPTANCE HEREOF. EACH GRANTOR
ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO TRUSTEE'S
ENTERING INTO THIS AGREEMENT AND THAT TRUSTEE IS RELYING UPON THE FOREGOING
WAIVERS IN ITS FUTURE DEALINGS WITH THE GRANTORS. EACH
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GRANTOR 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.
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IN WITNESS WHEREOF, this Agreement has been duly executed on
the day and year specified at the beginning hereof.
NEENAH FOUNDRY COMPANY
By: _____________________________________
Title:___________________________________
XXXXXX FOUNDRY, INC.
By: _____________________________________
Title:___________________________________
XXXXXX FORGE CORPORATION
By: _____________________________________
Title:___________________________________
XXXXXX CORPORATION
By: _____________________________________
Title:___________________________________
XXXXXX CORPORATION, STRYKER MACHINING
FACILITY CO.
By: _____________________________________
Title:___________________________________
XXXXXX CORPORATION, WARSAW MANUFACTURING
FACILITY
By: _____________________________________
Title:___________________________________
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ADVANCED CAST PRODUCTS, INC.
By: _____________________________________
Title:___________________________________
XXXXX INDUSTRIES, INC.
By: _____________________________________
Title:___________________________________
NEENAH TRANSPORT, INC.
By: _____________________________________
Title:___________________________________
CAST ALLOYS, INC.
By: _____________________________________
Title:___________________________________
XXXXXX CORPORATION, KENDALLVILLE
MANUFACTURING FACILITY
By: _____________________________________
Title:___________________________________
XXXXXX CORPORATION, ASHLAND
MANUFACTURING FACILITY
By: _____________________________________
Title:___________________________________
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A&M SPECIALTIES, INC.
By: _____________________________________
Title:___________________________________
XXXXXXX CORPORATION
By: _____________________________________
Title:___________________________________
PEERLESS CORPORATION
By: _____________________________________
Title:___________________________________
THE BANK OF NEW YORK, a New York banking
corporation, as Trustee
By:______________________________________
Title:___________________________________
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EXHIBIT 3.2
LOCATIONS OF COLLATERAL
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