Exhibit - 4.14 - Subordination, Waiver and Consent Agreement Dated June 5,2001
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SUBORDINATION, WAIVER AND CONSENT AGREEMENT
THIS SUBORDINATION, WAIVER AND CONSENT AGREEMENT (as the same may from
time to time be amended, restated or otherwise modified, this "Agreement") is
made as of June 5, 2001, and entered into by and among:
(a) AMCAST INDUSTRIAL CORPORATION, an Ohio corporation ("Borrower");
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(b) the LIFO Agent, as hereinafter defined, and the LIFO Banks, as
hereinafter defined (the LIFO Agent and the LIFO Banks being
collectively referred to herein as the "Senior Lenders");
(c) the Line of Credit Lenders, as hereinafter defined;
(d) the Existing Credit Agreement Agent, as hereinafter defined, and the
Existing Credit Agreement Banks, as hereinafter defined;
(e) the Noteholders, as hereinafter defined (the Line of Credit
Lenders, the Existing Credit Agreement Agent, the Existing
Credit Agreement Banks, and the Noteholders being collectively
referred to herein as the "Subordinated Lenders"); and
(f) the Collateral Agent, as hereinafter defined.
RECITALS
WHEREAS, the Subordinated Lenders have made certain loans and other
extensions of credit to Borrower and its Subsidiaries, as hereinafter defined,
pursuant to the terms and conditions of their respective Subordinated Lender
Documents, as hereinafter defined;
WHEREAS, certain defaults or events of default exist under the
Subordinated Lender Documents, as hereinafter defined, and, as a result of such
defaults or events of default, the Subordinated Lenders have the right, among
other things, to exercise any remedies available to the Subordinated Lenders
under their respective Subordinated Lender Documents, including, but not limited
to the right to (a) terminate any commitment or other obligation to make any
further loans or other extensions of credit, and (b) accelerate the maturity of
their respective Subordinated Lender Obligations, as hereinafter defined;
WHEREAS, notwithstanding the existence of such defaults or events of
default, Borrower has requested that the Subordinated Lenders (a) temporarily
waive such defaults and events of default, and (b) consent to Borrower entering
into the LIFO Credit Agreement, as hereinafter defined, to provide temporary
working capital while Borrower and its consultants develop and implement a
revised plan and financial strategy to refinance or restructure Borrower's
existing indebtedness;
WHEREAS, in order to provide Borrower with such temporary working
capital, concurrently herewith Borrower is entering into the LIFO Credit
Agreement, as hereinafter defined, with the Senior Lenders pursuant to which
Borrower will obtain from the Senior Lenders the financial accommodations
described therein;
WHEREAS, in order to induce the Senior Lenders to enter into the LIFO
Credit Agreement and to make such financial accommodations to Borrower
thereunder, the Subordinated Lenders desire to subordinate, in accordance with
the provisions of this Agreement, the Subordinated Lender Obligations and the
Subordinated Lender Liens, as hereinafter defined, to the Senior Lender
Obligations, as hereinafter defined, and the Senior Lender Liens, as hereinafter
defined.
NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Collateral Agent" shall mean KeyBank National Association, in
its capacity as Collateral Agent under the Subordinated Lender
Collateral Documents, together with its successors and assigns.
"Companies" shall mean, collectively, Borrower and all
Subsidiaries.
"Company" shall mean Borrower or a Subsidiary.
"Creditor" shall mean any Senior Lender or Subordinated Lender.
"Creditor Documents" shall mean, collectively, the Senior
Lender Documents and the Subordinated Lender Documents.
"Creditors" shall mean, collectively, the Senior Lenders and
the Subordinated Lenders.
"CTC Forbearance Agreement" shall mean the Forbearance and
Waiver Agreement among Borrower, the LIFO Agent, on behalf of and for
the benefit of the LIFO Banks, and Bank One, Indiana, National
Association on behalf of itself and as CTC Agent for the benefit of and
on behalf of the CTC Banks, dated as of the date hereof, as the same
may from time to time be amended, restated or otherwise modified.
"Distributions" shall mean, collectively, all cash, securities
and other properties payable or otherwise distributable on or in
respect of the Subordinated Lender Obligations in any Proceeding;
provided, however, that Distributions shall not include equity
securities issued to a Subordinated Lender after the commencement of a
Proceeding, so long as such securities are subordinated to the Senior
Lender Obligations and the Subordinated Lender Obligations.
"Existing Bank Defaults" shall have the meaning given to such
term in Section 2.2 hereof.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of August 14, 1997, among Borrower, the Existing Credit
Agreement Banks and the Existing Credit Agreement Agent, as amended and
as the same may from time to time be further amended, restated or
otherwise modified.
"Existing Credit Agreement Agent" shall mean KeyBank National
Association, as Agent for the Existing Credit Agreement Banks, together
with its successors and assigns.
"Existing Credit Agreement Banks" shall mean the banking
institutions named in Schedule 1 to the Existing Credit Agreement,
together with their respective successors and assigns.
"Existing Credit Agreement Obligations" shall mean all
indebtedness or other obligations incurred by Borrower or any other
Company to the Existing Credit Agreement Agent or the Existing Credit
Agreement Banks pursuant to the Existing Credit Agreement, whether for
principal, premium, interest, fees, costs or indemnities, and whether
now existing or hereafter arising.
"Existing Defaults" shall mean, collectively, the Existing
Bank Defaults, Existing Line of Credit Defaults and Existing Noteholder
Defaults.
"Existing Line of Credit Defaults" shall have the meaning
given to such term in Section 2.2 hereof.
"Existing Noteholder Defaults" shall have the meaning given to
such term in Section 2.2 hereof.
"Guarantor" shall mean any Person that pledges its credit or
property in any manner for the payment or other performance of any of
the Senior Lender Obligations or Subordinated Lender Obligations.
"Intercreditor Agreement" shall mean the Collateral Agency and
Intercreditor Agreement, dated as of June 5, 2001, by and among the
Existing Credit Agreement Agent, the Noteholders, the Line of Credit
Lenders and the Collateral Agent, as the same may from time to time be
amended, restated or otherwise modified.
"Lien" shall mean any mortgage, security interest, lien
(statutory or other), charge, encumbrance on, pledge or deposit of, or
conditional sale, leasing, sale with a right of redemption or other
title retention agreement and any capitalized lease with respect to any
property (real or personal) or asset.
"LIFO Credit Agreement" shall mean the Last-In-First-Out
Credit Agreement, dated as of June 5, 2001, among Borrower, the LIFO
Credit Agreement Banks and the LIFO Credit Agreement Agent, as the same
may from time to time be amended, restated or otherwise modified.
"LIFO Credit Agreement Agent" shall mean KeyBank National
Association, as Agent for the LIFO Credit Agreement Banks, together
with its successors and assigns.
"LIFO Credit Agreement Banks" shall mean the banking
institutions named in Schedule 1 to the LIFO Credit Agreement, together
with their respective successors and assigns.
"Line of Credit Documents" shall mean the promissory notes and
other agreements evidencing the Line of Credit Obligations.
"Line of Credit Lenders" shall mean the Line of Credit
Lenders, as defined in the Existing Credit Agreement.
"Line of Credit Obligations" shall mean all indebtedness or
other obligations incurred by Borrower or any other Company to the Line
of Credit Lenders pursuant to the Line of Credit Documents, whether for
principal, interest, fees, costs or indemnities, and whether now
existing or hereafter arising.
"Majority Noteholders" shall mean Noteholders holding at least
fifty-one percent (51%) of the Noteholder Obligations.
"Monetary Default" shall have the meaning set forth in Section
4.7 hereof.
"Northwestern" shall mean The Northwestern Mutual Life
Insurance Company, together with its successors and assigns.
"Northwestern Note Agreement" shall mean the Note Agreement,
dated as of November 1, 1995, pursuant to which Borrower has issued to
Northwestern certain $25,000,000 7.09% Senior Notes Due November 7,
2005, as amended and as the same may from time to time be further
amended, restated or otherwise modified.
"Note Agreements" shall mean, collectively, the Principal Note
Agreement and the Northwestern Note Agreement.
"Noteholders" shall mean, collectively, Principal and
Northwestern.
"Noteholder Obligations" shall mean all indebtedness or other
obligations incurred by Borrower or any other Company to the
Noteholders pursuant to the Note Agreements and the Notes issued
thereunder, whether for principal, premium, interest, fees, costs or
indemnities, and whether now existing or hereafter arising.
"Permitted Enforcement Action" shall mean (a) any enforcement,
collection or similar proceeding with respect to Borrower or any other
Company or the exercise of any remedy (including, without limitation,
the institution of suit and the enforcement of any judgment) undertaken
by a Subordinated Lender to enforce the Subordinated Lender Obligations
owing to it, other than any enforcement, collection or similar
proceeding with respect to the Subordinated Lender Collateral, or (b)
the commencement by the Collateral Agent, acting at the direction of
the Required Existing Banks or the Majority Noteholders to enforce the
Subordinated Lender Liens.
"Permitted Payments" shall mean (a) regularly scheduled
payments of interest or commitment or other fees to the Subordinated
Lenders under the Subordinated Lender Documents, and (b) the payment by
Borrower to the Subordinated Lenders of the fees and other compensation
set forth in Article IV of this Agreement.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, unincorporated organization, corporation,
limited liability company, institution, trust, estate, government or
other agency or political subdivision thereof or any other entity.
"PIK Interest" shall have the meaning given to such term in
Section 5.2 hereof.
"Principal" shall mean Principal Life Insurance Company,
together with its successors and assigns.
"Principal Note Agreement" shall mean the Note Agreement,
dated as of November 1, 1995, pursuant to which Borrower has issued to
Principal certain $25,000,000 7.09% Senior Notes Due November 7, 2005,
as amended and as the same may from time to time be further amended,
restated or otherwise modified.
"Proceeding" shall mean (a) any assignment by Borrower or any
other Company for the benefit of creditors, (b) any filing of a
voluntary petition by or involuntary petition against Borrower or any
other Company pursuant to any chapter of the United States Bankruptcy
Code, (c) any institution of a voluntary proceeding by or involuntary
proceeding against Borrower or any other Company under any other
federal, state or international law relating to insolvency relief of
debtors, (d) any appointment of a receiver, trustee or liquidator of
Borrower or any other Company or of all or a substantial part of the
assets of Borrower or such Company, (e) any liquidation or dissolution
of Borrower or any other Company, or (f) any marshaling of the assets
and liabilities or Borrower or any other Company.
"Required Existing Banks" shall mean the Majority Banks, as
defined in the Existing Credit Agreement.
"Required Lenders" shall mean, at the time of determination,
Lending Parties holding at least sixty-six and two-thirds percent
(66-2/3%) of the sum of (a) the Loan and Reimbursement Obligations (b)
the aggregate principal amount of the Noteholder Senior Notes then
outstanding under the Note Agreements and (c) the aggregate principal
amount of the Line of Credit Obligations (plus any Other Line of Credit
Obligations) then outstanding (but specifically excluding the Hedge
Agreement Obligations). The capitalized terms used in this definition
shall have the meaning given to such terms in the Intercreditor
Agreement.
"Required Senior Lenders" shall mean the Required Banks, as
defined in the LIFO Credit Agreement.
"Senior Lender Collateral" shall mean any property, whether
tangible or intangible, at any time securing the Senior Lender
Obligations, or any part thereof.
"Senior Lender Collateral Documents" shall mean the Security
Documents, as defined in the LIFO Credit Agreement, together with all
other documents, instruments or agreements executed in connection with
any security interest or Lien granted, or otherwise obtained, on or in
connection with the Senior Lender Collateral, or any part thereof.
"Senior Lender Documents" shall mean, collectively, the LIFO
Credit Agreement, the Senior Lender Collateral Documents and the other
Loan Documents, as defined in the LIFO Credit Agreement, together with
all other documents, instruments or agreements executed in connection
with any of the foregoing, as the same may from time to time be
amended, restated or otherwise modified.
"Senior Lender Liens" shall mean the Liens granted to the LIFO
Credit Agreement Agent, for the benefit of the LIFO Credit Agreement
Banks, in the Senior Lender Collateral pursuant to the Senior Lender
Collateral Documents.
"Senior Lender Obligations" shall mean all indebtedness or
other obligations incurred by Borrower or any other Company to the
Senior Lenders pursuant to the LIFO Credit Agreement, whether for
principal, premium, interest, fees, costs or indemnities, and whether
now existing or hereafter arising.
"Subordinated Lender Collateral" shall mean any property,
whether tangible or intangible, at any time securing the Subordinated
Lender Obligations, or any part thereof.
"Subordinated Lender Collateral Documents" shall mean the
Collateral Documents, as defined in the Existing Credit Agreement,
together with all other documents, instruments or agreements executed
in connection with any security interest or Lien granted, or otherwise
obtained, on or in connection with the Subordinated Lender Collateral,
or any part thereof.
"Subordinated Lender Documents" shall mean, collectively, the
Existing Credit Agreement, the Note Agreements, the Line of Credit
Documents and the Subordinated Lender Collateral Documents, together
with all other documents, instruments or agreements executed in
connection with any of the foregoing, as the same may from time to time
be amended, restated or otherwise modified.
"Subordinated Lender Liens" shall mean the Liens granted to
the Collateral Agent, for the benefit of the Subordinated Lenders, in
the Subordinated Lender Collateral pursuant to the Subordinated Lender
Collateral Documents, or any other Lien granted to or acquired by any
Person that by its terms secures the Subordinated Lender Obligations,
or any part thereof.
"Subordinated Lender Obligations" shall mean, collectively,
(a) the Existing Credit Agreement Obligations, (b) the Noteholder
Obligations, (c) the Line of Credit Obligations, and (d) all
indebtedness or other obligations owing by Borrower or any other
Company to the Collateral Agent or any Subordinated Lender pursuant to
the Subordinated Lender Collateral Documents.
"Subsidiary" of Borrower or any of its Subsidiaries shall mean
(a) a corporation more than fifty percent (50%) of the Voting Power of
which is owned, directly or indirectly, by Borrower or by one or more
other subsidiaries of Borrower or by Borrower and one or more
subsidiaries of Borrower, (b) a partnership or limited liability
company of which Borrower, one or more other subsidiaries of Borrower
or Borrower and one or more subsidiaries of Borrower, directly or
indirectly, is a general partner or managing member, as the case may
be, or otherwise has the power to direct the policies, management and
affairs thereof, or (c) any other Person (other than a corporation) in
which Borrower, one or more other subsidiaries of Borrower or Borrower
and one or more subsidiaries of Borrower, directly or indirectly, has
at least a majority interest in the Voting Power or the power to direct
the policies, management and affairs thereof.
"Voting Power" shall mean, with respect to any Person, the
exclusive ability to control, through the ownership of shares of
capital stock, partnership interests, membership interests or
otherwise, the election of members of the board of directors or other
similar governing body of such Person, and the holding of a designated
percentage of Voting Power of a Person means the ownership of shares of
capital stock, partnership interests, membership interests or other
interests of such Person sufficient to control exclusively the election
of that percentage of the members of the board of directors or similar
governing body of such Person.
"Waiver Period" shall have the meaning given to such term in
Section 2.4 hereof.
"Warrants" shall have the meaning given to such term in
Section 5.3 hereof.
"Warrant Agreement" shall have the meaning given to such term
in Section 5.3 hereof.
SECTION 1.2. Plural Terms. The foregoing definitions shall be applicable to
the singular and plurals of the foregoing defined terms.
ARTICLE II. WAIVERS
SECTION 2.1. Outstanding Indebtedness. Borrower, on behalf of itself
and each of its Subsidiaries, acknowledges and confirms that Exhibit A hereto
sets forth, as of the date hereof and prior to giving effect to the LIFO Credit
Agreement, the aggregate principal amount of all outstanding indebtedness owing
to each Creditor and that such amount is not subject to any defense,
counterclaim, recoupment or offset of any kind.
SECTION 2.2. Existing Defaults. Borrower acknowledges that Borrower has
failed to comply with (a) the provisions of the Existing Credit Agreement as set
forth on Exhibit B hereto (the "Existing Bank Defaults"), (b) the provisions of
the Note Agreements as set forth on Exhibit C hereto (the "Existing Noteholder
Defaults"), and (c) the provisions of the Line of Credit Documents as set forth
on Exhibit D hereto (the "Existing Line of Credit Defaults").
SECTION 2.3. Continuing Defaults. With respect to each of the Existing
Defaults, Borrower acknowledges that (a) such Existing Defaults are continuing
and have not been waived by virtue of any previous actions (or failure to act)
by the Existing Credit Agreement Agent, the Existing Credit Agreement Banks, the
Noteholders or the Line of Credit Lenders, as the case may be, or through any
course of conduct or course of dealing or otherwise, (b) as a result of the
existence of such Existing Defaults, the Subordinated Lenders, pursuant to their
respective Subordinated Lender Documents, have the right to, among other things,
(A) terminate the obligation of such Subordinated Lenders to make any further
loan or other extension of credit, and (B) accelerate the maturity of their
respective Subordinated Lender Obligations, and (c) no Subordinated Lender has
any obligation to enter into this Agreement.
SECTION 2.4. Waiver and Waiver Period. Each Subordinated Lender, by its
execution of this Agreement and upon the satisfaction of the conditions set
forth in Article V hereof, hereby waives the Existing Defaults that exist under
the Subordinated Lender Documents to which such Subordinated Lender is a party
for the period from March 4, 2001 through the earlier of (a) April 15, 2002 or,
if later, the last day of the Commitment Period, as defined in the LIFO Credit
Agreement (but, in no event, beyond the maturity date of the Existing Credit
Agreement, which maturity date may not be extended, without the consent of the
Majority Noteholders and the Required Existing Banks, beyond August 13, 2002),
or (b) the date that the commitment under the LIFO Credit Agreement is
terminated (whether at maturity, by acceleration or otherwise) (the "Waiver
Period"), on the conditions that:
(a) after giving effect to the terms of this Agreement, other
than the Existing Defaults, no other default or event of default shall
exist under this Agreement, any Subordinated Lender Document or any
Senior Lender Document;
(b) during the Waiver Period, other than the Existing
Defaults, no other default or event of default shall occur under this
Agreement, any Subordinated Lender Document or any Senior Lender
Document; and
(c) concurrently with the execution of this Agreement, Borrower
shall have entered into the LIFO Credit Agreement and the loans
provided for therein shall be available to Borrower in accordance with
the terms of the LIFO Credit Agreement.
SECTION 2.5. No Course of Dealing. Borrower and each Guarantor, by
signing the attached acknowledgement, acknowledge and agree that, (a) this
Agreement is not intended, nor shall it, establish any course of dealing among
Borrower and any Creditor that is inconsistent with the express terms of the
Creditor Documents to which such Creditor is a party, (b) notwithstanding any
course of dealing between Borrower and any Creditor prior to the date hereof,
except as set forth herein, no Creditor shall be obligated to make any loan or
other extension of credit, (c) except with respect to the limited waivers
granted herein specifically relating to the Existing Defaults, and subject to
the subordinations granted hereunder, the Creditors shall not be under any
obligation to forbear from exercising any of their respective rights or remedies
upon the occurrence of any default or event of default under this Agreement or
any of the Creditor Documents, and (d) notwithstanding any past practice, no
Creditor shall be obligated or expected to honor any "overdrafts" or items for
which funds of Borrower are not immediately available.
SECTION 2.6. No Further Waiver. Borrower and each Guarantor, by signing
the attached acknowledgement, each acknowledge and agree that (a) this Agreement
shall not operate as a waiver of any other right, power or remedy of any
Creditor under any Creditor Document nor shall it constitute a continuing waiver
at any time, (b) no Creditor shall have any obligation to extend the term of the
Waiver Period, (c) nothing herein shall be deemed to constitute a waiver of any
default or event of default other than the Existing Defaults, and, subject to
the subordinations granted hereunder, nothing herein shall in any way prejudice
the rights and remedies of any Creditor under any of the Creditor Documents or
applicable law. In addition, the Creditors shall have the right to waive any
condition or conditions set forth in this Agreement or any other Creditor
Document, in their sole discretion, and any such waiver shall not prejudice,
waive or reduce any other right or remedy that such Creditors may have against
Borrower or any Guarantor.
SECTION 2.7. Survival. All representations, warranties, covenants,
agreements, releases and waivers made by or on behalf of Borrower or any
Guarantor under this Agreement shall survive and continue after the expiration
or termination of the Waiver Period.
ARTICLE III. CONSENT AND OTHER AGREEMENTS
SECTION 3.1. Consent to Senior Lender Obligations. Each Subordinated
Lender hereby consents to Borrower and each other Company entering into the LIFO
Credit Agreement and the other Senior Lender Documents to which Borrower and
such other Company is a party. Each Subordinated Lender hereby agrees that the
execution and delivery by Borrower and each other Company of the LIFO Credit
Agreement and the other Senior Lender Documents to which each is a party, and
the consummation of the transactions contemplated therein, including, but not
limited to, the incurrence by Borrower of the Senior Lender Obligations and the
granting of the Liens pursuant to the Senior Lender Collateral Documents, shall
not constitute a default or event of default under any Subordinated Lender
Document.
SECTION 3.2. No Modification. Each Subordinated Lender agrees that,
after the date hereof, no Subordinated Lender Document to which such
Subordinated Lender is a party will be amended, restated, supplemented or
otherwise modified in any material respect without the prior written consent of
the Required Lenders; provided, however, that (a) the Subordinated Lender
Documents may be amended from time to time for the purpose of conforming the
affirmative and negative covenants contained therein to the affirmative and
negative covenants contained in the LIFO Credit Agreement. Concurrently with any
such amendment, such Subordinated Lender shall provide copies of such amendment
to each other Creditor; and (b) the Subordinated Lender Documents may be amended
to give effect to the provisions of Section 3.5 hereof.
SECTION 3.3. Modification to Line of Credit Obligations. Each of the
parties hereto consents to the replacement of Schedule 4 (Line of Credit
Obligations) to the Existing Credit Agreement with Schedule 4 attached to this
Agreement and that the indebtedness listed on such Schedule 4 shall constitute
Line of Credit Obligations, as defined in the Existing Credit Agreement.
SECTION 3.4. Resignation of Existing Credit Agreement Agent;
Appointment of New Credit Agreement Agent. In the event of a bankruptcy filing
by or against Borrower, unless otherwise agreed by the Existing Credit Agreement
Banks, KeyBank National Association shall resign as Existing Credit Agreement
Agent with such resignation to be effective only upon selection of a successor
agent in accordance with Section 9.10 of the Existing Credit Agreement.
SECTION 3.5. Extension of Maturity Date. The Noteholders hereby agree
that if the Existing Credit Agreement Banks shall agree, which agreement shall
be evidenced by the appropriate amendment to the Existing Credit Agreement, at
any time (prior to August 14, 2002) to change the last day of the Commitment
Period, as defined in the Existing Credit Agreement, from August 14, 2002 to
September 14, 2003, then, so long as no event of default shall exist under the
Existing Credit Agreement or the Note Agreements, immediately upon the execution
of such Amendment by Borrower and the Existing Credit Agreement Banks, the Note
Agreements shall be deemed to be amended, without any further action by the
Noteholders, such that the principal payment currently required to be paid on
November 7, 2002 pursuant to Section 2.1 of each Note Agreement shall be
postponed until November 7, 2003.
ARTICLE IV. SUBORDINATION
SECTION 4.1. Subordination. Except as expressly set forth herein, the
Subordinated Lender Obligations shall at all times and
in all respects be subordinate and junior in right of payment to any
and all of the Senior Lender Obligations.
SECTION 4.2. Restrictions on Payments of Subordinated Lender Obligations.
Until the Senior Lender Obligations have been indefeasibly paid in
full, no payments of principal, premium, interest, commitment or other
fees shall be made with respect to any of the Subordinated Lender
Obligations except as permitted pursuant to Section 4.3 hereof. In
addition, each Subordinated Lender agrees that:
(a) such Subordinated Lender shall not ask, demand, xxx for,
accept or receive payment from Borrower or any other Company (except as
permitted in Section 4.3 hereof and Section 4.7 hereof), by set-off or
in any other manner, either in whole or in part, of the Subordinated
Lender Obligations owing to such Subordinated Lender, nor any security
therefor other than as permitted pursuant to Section 4.4 hereof,
without obtaining the prior written consent of the Required Senior
Lenders;
(b) in the event of (i) any distribution, division or
application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any part of the assets of any
Company, or the proceeds thereof, to creditors of such Company by
reason of the liquidation, dissolution or other winding up of such
Company's business, or (ii) any Proceeding, such Subordinated Lender
agrees that any payment or Distribution of any kind or character that
shall be paid or delivered, or payable or deliverable, upon or with
respect to the Subordinated Lender Obligations owing to such
Subordinated Lender immediately shall be paid or delivered directly to
the LIFO Credit Agreement Agent for application on the Senior Lender
Obligations, whether or not due, until all of the Senior Lender
Obligations first shall have been fully paid and satisfied; and
(c) so long as any portion of the Senior Lender Obligations
remain outstanding, other than a Permitted Enforcement Action such
Subordinated Lender shall not enforce any judgment that it might obtain
with respect to the Subordinated Lender Obligations owing to such
Subordinated Lender (including, without limitation, execution,
attachment or foreclosure of judgment liens against any assets of any
Company) without obtaining the prior written consent of the Required
Senior Lenders, regardless of whether Borrower or any other Company is
in default of any of its obligations to such Subordinated Lender.
SECTION 4.3. Permitted Payments. Notwithstanding anything in this Agreement
to the contrary:
(a) the Subordinated Lenders may receive from Borrower, and
Borrower may make Permitted Payments, so long as (i) Borrower shall not
have filed, or be named a debtor in, a bankruptcy case, which case
shall be pending, (ii) Borrower shall not have failed to pay or caused
to be paid any payment (whether for principal, premium, interest, or
commitment or other fees and specifically including any mandatory
prepayment due pursuant to Section 2.9 of the LIFO Credit Agreement)
under the LIFO Credit Agreement as such payment becomes due (after
giving effect to any period of grace), or (iii) the Required Senior
Lenders shall not have accelerated the amounts due under the LIFO
Credit Agreement after the occurrence of an Event of Default (as
defined in the LIFO Credit Agreement); and
(b) the Existing Credit Agreement Agent, the Noteholders and
the Collateral Agent shall at all times be permitted to receive from
Borrower reimbursement for out-of-pocket and other expenses incurred in
accordance with the terms of the Subordinated Lender Documents.
Anything herein to the contrary notwithstanding, this Section 4.3 shall
not prohibit (a) the reborrowing by Borrower of any LIBOR Loan, as
defined in the Existing Credit Agreement, that is in Italian Lira, at
the end of each interest period applicable thereto, or (b) the
extension of the expiry date or replacement of any Letter of Credit, as
defined in the Existing Credit Agreement, under the Existing Credit
Agreement, so long as the face amount thereof is not increased.
SECTION 4.4. Permitted Security; Subordination of Liens.
(a) The Senior Lenders hereby consent to the Subordinated Lender Liens.
(b) The Collateral Agent, on behalf of the Subordinated
Lenders, hereby subordinates the existing and future Subordinated
Lender Liens in the Subordinated Lender Collateral to the existing and
any future Senior Lender Liens in the Senior Lender Collateral, whether
or not any such Senior Lender Liens are perfected. Each Subordinated
Lender hereby consents to the subordination by the Collateral Agent, on
behalf of the Subordinated Lenders, of the existing and future
Subordinated Lender Liens in the Subordinated Lender Collateral to the
existing and any future Senior Lender Liens in the Senior Lender
Collateral and authorizes the Collateral Agent to take such actions as
may be necessary or appropriate to give effect to such subordination.
(c) The Subordinated Lenders agree that, anything contained in
any of the Subordinated Lender Documents to the contrary
notwithstanding, neither the Collateral Agent nor any Subordinated
Lender shall hold, nor shall the Collateral Agent or any Subordinated
Lender obtain or acquire, without the prior written consent of the
Required Senior Lenders, any Lien in any equipment, assets, or real or
other property of any Company, unless such Lien shall be subject to the
terms and conditions of this Agreement.
(d) The Collateral Agent and the Subordinated Lenders agree
that, upon request of the LIFO Credit Agreement Agent, each financing
statement, mortgage or other evidence or notice of the Subordinated
Lender Liens shall contain a statement, in form satisfactory to the
LIFO Credit Agreement Agent, that such Lien is subordinated to the
Senior Lender Liens and that certain rights and remedies of the
Subordinated Lenders are subject to the terms of this Agreement.
(e) Except as permitted in Section 4.7 hereof, and without
limiting the provisions of Section 4.1 above, the Collateral Agent and
each Subordinated Lender agrees that it will not enforce (and each
Subordinated Lender agrees that it shall not instruct or authorize the
Collateral Agent to enforce) any of the Subordinated Lender Liens, or
in any manner interfere with, any of the Senior Lender Collateral, or
any other real or personal property of any Company, unless and until
the LIFO Credit Agreement Agent shall have advised Subordinated Lenders
in writing that the Senior Lender Obligations have been indefeasibly
satisfied in full. The Collateral Agent and each Subordinated Lender
agrees that it will not (and each Subordinated Lender agrees that it
shall not instruct or authorize the Collateral Agent to) seek to notify
account debtors or other obligors of the Subordinated Lender
Obligations, nor will the Collateral Agent collect any proceeds of the
Subordinated Lender Collateral or otherwise enforce or apply the
Subordinated Lender Liens in the proceeds of the Subordinated Lender
Collateral, unless and until the LIFO Credit Agreement Agent shall have
advised the Subordinated Lenders in writing, that all of the Senior
Lender Obligations have been indefeasibly satisfied in full.
(f) Pending receipt of the notice by the Subordinated Lenders
from the LIFO Credit Agreement Agent referred to in subpart (e) above,
the Collateral Agent and the Subordinated Lenders (i) shall not assert
any claim for marshalling, (ii) if requested by the LIFO Credit
Agreement Agent, shall consent to the disposition of the Senior Lender
Collateral by the LIFO Credit Agreement Agent provided that such
disposition is made in a commercially reasonably manner and on
commercially reasonable terms or, if the LIFO Credit Agreement Agent
requests, by any Company or any of such Company's affiliates or any
successor to any such Company, including a trustee in bankruptcy, in a
commercially reasonable manner and on commercially reasonable terms,
(iii) shall, at the request of the LIFO Credit Agreement Agent, in
connection with the disposition of any of the Senior Lender Collateral
in a commercially reasonable manner and on commercially reasonable
terms, release the Subordinated Lender Liens upon the disposition
thereof; provided that the proceeds of such sale are applied in
accordance with the Intercreditor Agreement and that such release shall
not impair any of the Subordinated Lender Liens upon any remaining
proceeds of such disposition after the full payment of the Senior
Lender Obligations. Subject to the terms hereof, nothing contained
herein shall be deemed to prohibit the Collateral Agent or any
Subordinated Lender from intervening or participating in any judicial
proceeding to the extent necessary to preserve or protect the interests
of the Collateral Agent in the Subordinated Lender Collateral.
(g) The provisions of this Agreement shall apply to the
proceeds of the Subordinated Lender Collateral and such proceeds of the
Subordinated Lender Collateral shall include insurance proceeds arising
from the theft, destruction, casualty or other loss (including business
interruption) of or to the Subordinated Lender Collateral, and the
priority of the Senior Lender Liens provided for herein shall apply to
such proceeds. Notwithstanding anything in the Subordinated Lender
Documents to the contrary, the LIFO Credit Agreement Agent shall have
the sole and exclusive right to adjust or enforce settlement of
insurance claims in the event of any covered theft, destruction,
casualty or other loss (including business interruption) of or to the
Senior Lender Collateral or the Subordinated Lender Collateral. All
such proceeds of such insurance shall inure to the LIFO Credit
Agreement Agent, for the benefit of the Senior Lenders; provided,
however, that after full payment of all of the Senior Lender
Obligations, any remaining insurance proceeds received by the LIFO
Credit Agreement Agent shall be remitted to the Collateral Agent, for
the benefit of the Subordinated Lenders, or otherwise as required by
law.
(h) If, in order to perfect any Lien on any of the
Subordinated Lender Collateral that also constitutes part of the Senior
Lender Collateral (the "Common Collateral"), the LIFO Credit Agreement
Agent is required to hold possession of such Common Collateral, then
such Common Collateral shall be held by the LIFO Credit Agreement
Agent, for the benefit of the Senior Lenders and the Subordinated
Lenders, but subject to the subordination provisions of this Agreement.
In connection with the foregoing, the Collateral Agent shall deliver to
the LIFO Credit Agreement Agent any securities, instruments, promissory
notes or other Common Collateral that is in the possession of the
Collateral Agent. To the extent that the Collateral Agent shall retain
possession of any of the foregoing, such shall be held by the
Collateral Agent for the benefit of the Senior Lenders and the
Subordinated Lenders in accordance with the provisions of this
Agreement. Upon payment in full of the Senior Lender Obligations and
termination of the provisions of this Agreement, the LIFO Credit
Agreement Agent shall re-deliver such Common Collateral to the
Collateral Agent.
SECTION 4.5. Priorities. The subordinations and priorities specified in
this Agreement are applicable irrespective of (a) the time or order of
attachment or perfection of security interests or other Liens referred to
herein, (b) the time or order of filing of any financing statements, (c) the
acquisition of purchase money or other security interests or the time of giving,
or failure to give, notice of the acquisition or expected acquisition of
purchase money or other security interests, (d) any provisions of the Uniform
Commercial Code as adopted in the State of Ohio or any applicable law or
decision, (e) the terms of the Senior Lender Documents or the Subordinated
Lender Documents, (f) whether either the Collateral Agent or the LIFO Credit
Agreement Agent holds possession of any of the Senior Lender Collateral or the
Subordinated Lender Collateral, as the case may be, and (g) whether or not the
Subordinated Lender Liens or Senior Lender Liens have been perfected.
SECTION 4.6. Delivery of Payment or Proceeds to the LIFO Credit Agreement
Agent.
(a) Except for the payments permitted pursuant to Section 4.3 hereof,
if any payment, distribution, security (other than as permitted pursuant to
Section 4.4 hereof) or proceeds thereof is received, whether from any collateral
or otherwise, by any Subordinated Lender upon or with respect to any
indebtedness of any Company to such Subordinated Lender (including, but not
limited to, the Subordinated Lender Obligations) prior to the irrevocable
satisfaction in full of the Senior Lender Obligations, such Subordinated Lender
shall receive and hold such payment, distribution, security or proceeds in trust
for the LIFO Credit Agreement Agent, for the benefit of the Senior Lenders, and
immediately shall deliver the same to the LIFO Credit Agreement Agent in
precisely the form received (except for the endorsement or assignment of such
Subordinated Lender where necessary), for application to the Senior Lender
Obligations, whether or not due, and, until so delivered, the same shall be held
in trust by such Subordinated Lender as property of the Senior Lenders. In the
event of the failure of any such Subordinated Lender to make any such
endorsement or assignment, the LIFO Credit Agreement Agent, or any of its
officers or employees, is hereby irrevocably constituted and appointed
attorney-in-fact of such Subordinated Lender with full power to make the same.
(b) To the extent that (i) any Subordinated Lender has turned over any
cash, securities or other property received as payments from Borrower to the
LIFO Credit Agreement Agent hereunder for application to the Senior Lender
Obligations or (ii) any cash, securities or other property to which any
Subordinated Lender would otherwise have been entitled (but for the provisions
of this Agreement) as payment from Borrower are paid to the LIFO Credit
Agreement Agent hereunder for application to the Senior Lender Obligations, and
any such payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from or disgorged by such
Subordinated Lender or is otherwise required to be refunded, repaid or restored
by such Subordinated Lender to Borrower or any trustee, receiver or other person
or entity under any law (including any bankruptcy or insolvency law or any
federal or state equitable cause of action), then, to the extent of any such
restoration, the LIFO Credit Agreement Agent shall repay such amount to such
Subordinated Lender and such Subordinated Lender and such Subordinated Lender's
obligations hereunder shall be renewed and continued in full force and effect as
if such payment had not been made to such Subordinated Lender or the LIFO Credit
Agreement Agent.
SECTION 4.7. Permitted Enforcement Action.
----------------------------
(a) If (i) the Permitted Payments described in subpart (a) of the
definition of Permitted Payments shall not be paid when due in accordance with
the terms of the Subordinated Lender Documents (a "Monetary Default"), (ii) such
Monetary Default shall continue for one hundred eighty (180) consecutive days,
and (iii) the Subordinated Lenders shall not have been made whole with respect
to such missed Permitted Payments (together with interest thereon at a rate per
annum of two percent (2%) in excess of the Prime Rate of KeyBank National
Association, as in effect from time to time) within five (5) days after the one
hundred eightieth (180th) day after the Monetary Default, then Permitted
Enforcement Actions may be commenced.
(b) If the maturity date of the LIFO Credit Agreement is extended
beyond August 13, 2002 and the Senior Lenders shall not have obtained the
written consent of the Majority Noteholders on or prior to the one hundred
eightieth (180th) day after August 13, 2002, then Permitted Enforcement Actions
may be commenced.
SECTION 4.8. Assignment of Claims. No Subordinated Lender shall assign
or transfer any claim, or suffer or permit the creation or attachment of any
Lien, claim or encumbrance, hypothecation or pledge upon any claim, that such
Subordinated Lender has or may have against any Company while any portion of the
Senior Lender Obligations remain unpaid, unless such assignment or transfer is
made expressly subject to this Agreement.
SECTION 4.9. Proceedings and Distributions.
-----------------------------
(a) In any Proceeding, the Subordinated Lenders shall have the right,
but not the duty, to prepare and file a proof of claim based upon the
Subordinated Lender Obligations and to vote and otherwise enforce and use the
same consistent with the provisions of this Agreement; provided that, if the
Subordinated Lenders fail to file such proof of claim on or before thirty (30)
days after the commencement of such Proceeding, the LIFO Credit Agreement Agent,
after having provided one business day's prior written notice to the Existing
Credit Agreement Agent and the Noteholders, shall have the right, but not the
duty, to prepare and file a proof of claim based upon the Subordinated Lender
Obligations.
(b) The LIFO Credit Agreement Agent shall be entitled to receive
Distributions on behalf of the Senior Lenders in respect of the Subordinated
Lender Obligations until the Senior Lender Obligations have been paid in full
(including, but not limited to, all interest accruing from time to time on the
Senior Lender Obligations after the commencement of any Proceeding, whether or
not a claim for such interest is allowable under such Proceeding). All
Distributions (other than cash and bearer instruments) shall be issued in the
name of the LIFO Credit Agreement Agent, and all Distributions, whatever the
form thereof, shall be delivered directly to the LIFO Credit Agreement Agent,
for the benefit of the Senior Lenders. No Person delivering any Distributions to
the LIFO Credit Agreement Agent shall have any responsibility to follow the
application by the LIFO Credit Agreement Agent of such Distributions. If, for
any reason, any Subordinated Lender shall receive any payment of or security for
or Distribution in respect of any of the Subordinated Lender Obligations, or any
part thereof, before payment in full of the Senior Lender Obligations
(including, but not limited to, all interest accruing from time to time on the
Senior Lender Obligations after the commencement of any Proceeding, whether or
not a claim for such interest is allowable under such Proceeding), such
Subordinated Lender shall receive the same in trust and shall deliver the same,
in the form received, directly to the LIFO Credit Agreement Agent. Each
Subordinated Lender shall execute and deliver such endorsements, assignments,
transfer powers and other writings in respect of the foregoing as the LIFO
Credit Agreement Agent may from time to time reasonably request; and the LIFO
Credit Agreement Agent shall have the right to execute and deliver the same for
and on behalf of such Subordinated Lender and in such Subordinated Lender's name
whenever such Subordinated Lender omits doing so.
SECTION 4.10. Modification to Senior Lender Documents; Additional
Agreements with Senior Lenders. At any time, and from time to time, the Senior
Lenders may enter into agreements with Borrower or any other Company as the
Senior Lenders may deem proper, including extending the time of payment or
maturity date of any and all of the Senior Lender Obligations (but, in no event,
beyond the maturity date of the Existing Credit Agreement, which shall not be
extended, without the consent of the Majority Noteholders and the Required
Existing Banks, beyond August 13, 2002), or otherwise altering the terms of the
Senior Lender Documents not inconsistent with this Section 4.10, or affecting
the Senior Lender Collateral or any guaranty, if any, underlying any or all of
such obligations, or may exchange, sell, or surrender or otherwise deal with any
such security or guaranties, or may release any balance of funds of any Company,
with the Senior Lenders, without notice to the Subordinated Lenders, and without
in any way impairing or affecting this Agreement thereby; provided, however,
that the Senior Lenders (nor any Refinancing Party, as hereinafter defined)
shall not:
(a) increase the principal amount of the Indebtedness under
the LIFO Credit Agreement or the interest or fees payable with respect
thereto (other than the charging of the Default Rate, as defined in the
LIFO Credit Agreement), without the prior written consent of the
Noteholders and the Existing Credit Agreement Banks;
(b) obtain any fee or other compensation in consideration of
any waiver, amendment, forbearance or other modification with respect
to the LIFO Credit Agreement, unless such fee or other compensation is
shared with the Subordinated Lenders on a pro rata basis;
(c) amend Section 2.2 of the LIFO Credit Agreement or the
definitions of "Level II Availability Conditions" or "Level III
Availability Conditions" of the LIFO Credit Agreement, without the
prior written consent of the Majority Noteholders and the Required
Existing Banks; or
(d) release any Senior Lender Collateral in connection with
the sale or other disposition of fixed assets of any Company (other
than the transfer of obsolete fixed assets that are no longer useful to
the Companies, in the ordinary course of business), unless (i) such
fixed assets are replaced, in the ordinary course of business of the
Companies, by similar assets of the Companies, or (ii) the net proceeds
of such sale or other disposition shall have been applied as a
prepayment of the Senior Lender Obligations and the commitment
thereunder shall have been permanently reduced by the amount of such
prepayment.
SECTION 4.11. Reliance by the Senior Lenders on the Subordinated
Lenders. The Subordinated Lenders consent and covenant that all of the Senior
Lender Obligations shall be deemed to have been made or incurred, in part, in
reliance upon this Agreement.
SECTION 4.12. Effect on Liens. Nothing contained in this Agreement is
intended to affect or limit, in any way whatsoever, the Liens that each of the
parties has in any assets of the Companies, whether tangible or intangible,
insofar as the rights of Borrower, any other Company or other third parties not
parties hereto are involved. The parties hereto specifically reserve any and all
of their respective rights, Liens and rights to enforce such Liens as against
any Company and any third parties.
SECTION 4.13. Nonwaiver of Payments. In the event that any Subordinated
Lender is required to pay to any Senior Lender any funds or other property that
such Subordinated Lender receives from any Company, other than as permitted
under Section 4.3 hereof, Borrower acknowledges, on behalf of itself and each of
its Subsidiaries, that such Subordinated Lender shall not have waived the rights
of such Subordinated Lender to payment in full of the Subordinated Lender
Obligations owing to such Subordinated Lender, subject, however, to the terms of
this Agreement.
SECTION 4.14. Refinancing of Senior Indebtedness. The Senior Lenders
may, from time to time, without notice to the undersigned, assign or transfer
any or all of the Senior Lender Obligations or any interest therein or permit
another Person (a "Refinancing Party") to extend credit to Borrower or any other
Company to enable Borrower or such Company to repay all or a portion of the
Senior Lender Obligations (a "Refinancing"), and, notwithstanding any such
assignment, transfer or Refinancing or any subsequent assignment, transfer or
Refinancing, such Senior Lender Obligations shall be and remain Senior Lender
Obligations for the purposes of this Agreement, and every immediate and
successive assignee or transferee of any of the Senior Lender Obligations or of
any interest therein, including, without limitation, any Refinancing Party,
shall, to the extent of the interest of such assignee, transferee or Refinancing
Party in the Senior Lender Obligations, be entitled to the benefits of this
Agreement, and subject to the obligations set forth in this Agreement to the
same extent as if such assignee, transferee or Refinancing Party were a Senior
Lender hereunder.
SECTION 4.15. Termination of Subordination. The subordinations,
agreements and other provisions set forth in this Article IV shall remain in
full force and effect until all of the Senior Lender Obligations have been
indefeasibly paid in full and the LIFO Credit Agreement terminated, regardless
of whether any party hereto in the future seeks to rescind, amend, terminate or
reform, by litigation or otherwise, its respective agreements with Borrower or
any other Company. If any payment received by any Senior Lender with respect to
the Senior Lender Obligations shall be required to be repaid or returned in
whole or in part by such Senior Lender to the payor thereof or such payment is
otherwise rescinded, in whole or in part, pursuant to applicable law and any
Subordinated Lender shall have received any payment with respect to the
Subordinated Lender Obligations (other than a payment received pursuant to
Section 4.3 hereof), then such Subordinated Lender shall promptly, upon written
demand, return all or the ratable part, as the case may be, of such payment to
the LIFO Credit Agreement Agent for delivery to the appropriate Senior Lender.
ARTICLE V. SUBORDINATION FEES AND OTHER COMPENSATION
SECTION 5.1. Subordination Fees. In consideration of the agreements of
the Subordinated Lenders set forth herein, Borrower shall pay to each
Subordinated Lender a subordination fee in an amount equal to sixty (60) basis
points times the aggregate principal amount (including any exposure under any
letter of credit) of the Subordinated Lender Obligations owing to such
Subordinated Lender as set forth on Exhibit A hereto. Such fees shall be payable
on the date hereof; provided, however, that the Existing Credit Agreement Banks
shall only be paid half of the subordination fees owed to them on the date
hereof, with the remaining half to paid on the date, if ever, that the Existing
Credit Agreement Banks shall have agreed in writing to extend the maturity date
of the Existing Credit Agreement from August 14, 2002 to September 14, 2003.
Borrower acknowledges and agrees that the Existing Credit Agreement Banks shall
be under no obligation to extend such maturity date and any such extension shall
be in the sole discretion of the Existing Credit Agreement Banks.
SECTION 5.2. PIK Interest. In consideration of the agreements of the
Noteholders set forth herein, and in addition to such other amounts that are
payable pursuant to the Note Agreements, Borrower shall pay to the Noteholders
additional payment-in-kind (the "PIK Interest") on the outstanding principal
amount of the Subordinated Lender Obligations owing to each such Noteholder at
the rate per annum of one percent (1%). The PIK Interest shall be evidenced by
the promissory notes executed and delivered in connection with the Note
Agreements (the "Noteholder Notes"). The PIK Interest shall be payable in
accordance with the terms and conditions of the Noteholder Notes; provided,
however, that (a) the Noteholders shall not be permitted to amend or modify in
any respect the form or substance of the provisions of the PIK Interest set
forth in the Noteholder Notes without the prior written consent of the other
Creditors, and (b) the PIK Interest shall be subordinate and junior in right of
payment to the Senior Lender Obligations and the Subordinate Lender Obligations
pursuant to the subordination terms set forth in each Noteholder Notes.
SECTION 5.3. Warrants. As additional consideration for the agreements
of the Subordinated Lenders hereunder, Borrower shall issue to each Subordinated
Lender warrants (the "Warrants") to purchase shares of the common stock of
Borrower as set forth on Exhibit E hereto. The Warrants shall be issued on the
date hereof; provided, however, that the Existing Credit Agreement Banks shall
only be issued half of the Warrants due to them on the date hereof, with the
remaining half to be issued on the date, if ever, that the Existing Credit
Agreement Banks shall have agreed in writing to extend the maturity date of the
Existing Credit Agreement from August 14, 2002 to September 14, 2003. Borrower
acknowledges and agrees that the Existing Credit Agreement Banks shall be under
no obligation to extend such maturity date and any such extension shall be in
the sole discretion of the Existing Credit Agreement Banks. The Warrants shall
be issued in accordance with and subject to the terms and conditions of a
Warrant Agreement in the form Exhibit F hereto (the "Warrant Agreement");
provided, however, that, at the request of the Noteholders, Borrower and the
Existing Banks shall enter into an amendment of the Warrant Agreement as the
Noteholders may reasonably request.
ARTICLE VI. CLOSING CONDITIONS
SECTION 6.1. Conditions of Effectiveness of Waivers. The effectiveness of
the waivers granted in Article
II hereof are conditioned on the following:
(a) Borrower shall have caused each Guarantor to consent and
agree to and acknowledge the terms of this Agreement by executing the
Guarantor Acknowledgment and Agreement attached hereto;
(b) the LIFO Credit Agreement shall have been executed by all
parties thereto and all conditions precedent to effectiveness set forth
therein shall have been satisfied; and
(c) Borrower shall have paid all legal fees and expenses of
the Existing Credit Agreement Agent and the LIFO Credit Agreement Agent
and the Noteholders in connection with this Agreement and the documents
and transactions contemplated hereby.
SECTION 6.2. Conditions Precedent. Concurrently with the execution and
delivery of this Agreement, Borrower shall have
satisfied the following conditions:
(a) a collateral audit, field exam and appraisal of the
personal and real property of the Companies shall have been commenced
by such Persons as the Collateral Agent shall approve in its
discretion, the costs and expenses of which shall be paid for by
Borrower;
(b) Borrower shall have selected and retained a turnaround management firm
acceptable to the Creditors, the fees and expenses of which shall be
paid for by Borrower;
(c) the Subordinated Lenders shall have retained a turnaround financial
advisor acceptable to them, the fees and expenses of which shall be
paid for by Borrower;
(d) the Warrant Agreement shall have been executed by all
parties thereto, and all other documents, instruments or agreements
required to be delivered in connection therewith shall have been
delivered;
(e) Borrower shall have delivered to the Creditors an
officer's certificate certifying the names of the officers of Borrower
authorized to sign this Agreement and the other documents to be
executed by Borrower in connection herewith, together with the true
signatures of such officers and certified copies of the resolutions of
the board of directors of Borrower evidencing approval of the execution
and delivery hereof;
(f) Borrower shall have delivered to the Creditors an opinion of counsel
for Borrower, in form and substance satisfactory to the Creditors;
(g) Borrower shall have paid to the Subordinated Lenders the fees required
to be paid pursuant to Section 5.1 hereof;
(h) Borrower shall have executed and delivered to the Noteholders the
appropriate Noteholder Notes;
(i) the CTC Forbearance Agreement shall have been executed and delivered
by the parties thereto; and
(j) Borrower shall have satisfied such other conditions as the Creditors
may reasonably require.
SECTION 6.3. Post-Closing Items. Borrower shall have satisfied the
following conditions on the dates set forth below:
(a) within sixty (60) days of the date hereof, with respect to
each Mortgaged Real Property, as defined in the Existing Credit
Agreement, or such thereof as the Collateral Agent may require, at
Borrower's cost and expense, Borrower shall have caused to be delivered
a Loan Policy of title insurance, ALTA 1970 Form B (amended 10/17/70
and 10/17/84) (unless such form is unavailable in any particular state,
in which case Borrower shall provide such other form of a Loan Policy
of title insurance as may reasonably requested by the Collateral Agent)
issued by a title company satisfactory to the Collateral Agent
(collectively, the "Loan Policies" and individually, a "Loan Policy")
in an amount equal to the fair market value of such Mortgaged Real
Property insuring each Mortgage, as defined in the Existing Credit
Agreement, to be a valid Lien on such Mortgaged Real Property, free and
clear of all defects and encumbrances except such matters of record as
permitted pursuant to the Existing Credit Agreement, with waiver of any
survey exceptions and such other standard exceptions as the Collateral
Agent may require, and with such endorsements and affirmative insurance
as the Collateral Agent, in its reasonable discretion, may require;
(b) within sixty (60) days of the date hereof, Borrower shall
provide to the Collateral Agent, with respect to each Mortgaged Real
Property, or such thereof as the Collateral Agent may require, at
Borrower's cost and expense, environmental reports or studies prepared
by environmental engineering firms acceptable to the Collateral Agent
(the "Reports"), which Reports shall be in form acceptable to the
Collateral Agent, in its sole discretion; and
(c) within sixty (60) days of the date hereof, Borrower shall
provide to the Collateral Agent with respect to each Mortgaged Real
Property, or such thereof as the Collateral Agent may require, at
Borrower's cost and expense, (i) a current (certified not more than
sixty (60) days prior to the date of such request) survey of the such
Mortgaged Real Property, prepared by a licensed surveyor acceptable to
the Collateral Agent, certified to the Collateral Agent and the
Subordinated Lenders and the title company pursuant to certificate of
survey acceptable to the Collateral Agent; such survey shall be in form
and substance acceptable to the Collateral Agent, in its sole
discretion, shall be made in accordance with the "Minimum Standard
Detail Requirements for Land Title Surveys" adopted by the American
Land Title Association in 1999; (ii) a copy of the certificate of
occupancy for each building located on each such Mortgaged Real
Property; (iii) evidence satisfactory to the Collateral Agent of
compliance with all building and zoning codes applicable to the
Mortgaged Real Property, (iv) evidence of the availability and adequacy
of utilities for the buildings located on the Mortgaged Real Property;
and (v) evidence, satisfactory to the Collateral Agent, that no portion
of any of the Mortgaged Real Property is located in a Special Flood
Hazard Area or is otherwise classified as Class A or Class BX on the
Flood Maps maintained by the Federal Emergency Management Agency.
ARTICLE VII. MISCELLANEOUS
SECTION 7.1. Representations and Warranties. Borrower hereby represents
and warrants to the Creditors that (a) Borrower has the legal power and
authority to execute and deliver this Agreement; (b) the officers of Borrower
executing this Agreement have been duly authorized to execute and deliver the
same and bind Borrower with respect to the provisions hereof; (c) the execution
and delivery hereof by Borrower and the performance and observance by Borrower
of the provisions hereof do not violate or conflict with the Articles of
Incorporation or Bylaws of Borrower or any law applicable to Borrower or result
in a breach of any provision of or constitute a default under any other
agreement, instrument or document binding upon or enforceable against Borrower;
(d) after giving effect to Section 2.4 hereof, no default or event of default,
or event or condition that, with the passage of time or giving of notice or
both, would constitute a default or event of default, exists under any Creditor
Document, nor will any occur immediately after the execution and delivery of
this Agreement or by the performance or observance of any provision hereof; (e)
Borrower is not aware of any claim or offset against, or defense or counterclaim
to, Borrower's obligations or liabilities under any Creditor Document; (f) this
Agreement constitutes a valid and binding obligation of Borrower in every
respect, enforceable in accordance with its terms; and (g) no Company has
received a notice of default of any kind from any account debtor and no account
debtor has asserted any right of set-off, deduction or counterclaim with respect
to any account .
SECTION 7.2. Release. Borrower hereby waives and releases each Creditor
and the respective directors, officers, employees, agents, attorneys, affiliates
and subsidiaries of such Creditor from any and all claims, offsets, defenses and
counterclaims that Borrower may have as of the date of this Agreement, such
waiver and release being with full knowledge and understanding of the
circumstances and effect thereof and after having consulted legal counsel with
respect thereto.
SECTION 7.3. Creditor Documents Unaffected. Except as herein otherwise
specifically provided, all provisions
of the Creditor Documents shall remain in full force and effect and be
unaffected hereby.
SECTION 7.4. No Other Promises or Inducements. There are no promises or
inducements that have been made to any party hereto to cause such party to enter
into this Agreement other than those that are set forth in this Agreement. This
Agreement has been entered into by Borrower freely, voluntarily, with full
knowledge, and without duress, and, in executing this Agreement, Borrower is not
relying on any other representations, either written or oral, express or
implied, made to Borrower by any Creditor. Borrower agrees that the
consideration received by Borrower under this Agreement has been actual and
adequate.
SECTION 7.5. No Waiver of Rights. No waiver shall be deemed to be made
by any party hereunder of any of its rights hereunder unless the same shall be
in writing signed on behalf of such party; provided that the Existing Credit
Agreement Agent shall have the right to act on behalf of the Existing Credit
Agreement Banks pursuant to and in accordance with the terms of the Existing
Credit Agreement and the LIFO Credit Agreement Agent shall have the right to act
on behalf of the LIFO Credit Agreement Banks pursuant to and in accordance with
the terms of the LIFO Credit Agreement. Each waiver, if any, shall be a waiver
only with respect to the specific instance involved and shall in no way impair
the rights of any party or the obligations of the Subordinated Lenders to the
Senior Lenders in any other respect at any other time.
SECTION 7.6. Waiver of Notice and Successors and Assigns. Each
Subordinated Lender hereby waives (a) notice of acceptance of this Agreement;
(b) notice of the existence, creation, extension, refunding, refinancing or
non-payment of all or any of the Senior Lender Obligations; (c) all diligence in
collection or protection of or realization upon the Senior Lender Obligations,
or any part thereof or any of the Senior Lender Collateral; and (d) notice of
the release, waiver or cancellation of any obligors or guarantors of all or any
portion of the Senior Lender Obligations or any Senior Lender Collateral
therefor. This Agreement shall be immediately binding upon Subordinated Lenders,
and the respective successors and permitted assigns of the Subordinated Lenders,
and the subordination described herein shall inure to the benefit of the Senior
Lenders and their respective successors and assigns.
SECTION 7.7. Governing Law. This Agreement shall be construed according to
the laws of the State of Ohio, without regard to
principles of conflicts of laws.
SECTION 7.8. Entire Agreement. This Agreement sets forth the entire
agreement and understanding among the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements, and undertakings of
every kind and nature among them with respect to the subject matter hereof.
SECTION 7.9. Termination of Agreement. Except as set forth in Section
4.14 hereof with respect to the termination of the subordination provisions, the
agreements and other provisions set forth in this Agreement shall remain in full
force and effect until all of the Senior Lender Obligations and Subordinated
Lender Obligations shall have been indefeasibly paid in full.
SECTION 7.10. Counterparts. This Agreement may be executed in any
number of counterparts, and by the parties hereto on the same or separate
counterparts and by facsimile signature, and each such counterpart, when
executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
SECTION 7.11. Notice. All notices, requests, demands and other
communications provided for hereunder shall be in writing and mailed or
delivered to any party, addressed to the address of such party specified on the
signature page of this Agreement. All notices, statements, requests, demands and
other communications provided for hereunder shall be deemed to be given or made
when delivered or forty-eight (48) hours after being deposited in the mails with
postage prepaid by registered or certified mail, addressed as aforesaid, or sent
by facsimile with telephonic confirmation of receipt, except that notices
pursuant to any of the provisions hereof shall not be effective until received.
SECTION 7.12. Jurisdiction and Venue. All judicial proceedings arising
out of or relating to this Agreement or any obligation hereunder shall be
brought in the United States District Court for the Northern District of Ohio or
in the Court of Common Pleas, Cuyahoga County, Ohio, and by their respective
execution and delivery of this Agreement, the undersigned accept for themselves
and in connection with their properties, generally and unconditionally, the
jurisdiction of the aforesaid courts and waive any defense of forum
nonconveniens, and irrevocably agree to be bound by any judgment rendered
thereby in connection with this Agreement.
SECTION 7.13. Severability Of Provisions; Captions; Attachments.
Wherever possible each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. The several captions to Sections and subsections herein are
inserted for convenience only and shall be ignored in interpreting the
provisions of this Agreement. Each schedule or exhibit attached to this
Agreement shall be incorporated herein an shall be deemed to be a part hereof.
SECTION 7.14. Legal Representation Of Parties. This Agreement was
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring this Agreement to be
construed or interpreted against any party shall not apply to any construction
or interpretation hereof or thereof.
[Remainder of page intentionally left blank.]
SECTION 7.15. JURY TRIAL WAIVER.. EACH OF THE UNDERSIGNED, TO THE
EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG
THEM, OR ANY OF THEM, ARISING OUT OF, IN CONNECTION WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED THERETO. THIS WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE,
LIMIT, AMEND OR MODIFY THE ABILITY OF ANY OF THE UNDERSIGNED TO PURSUE REMEDIES
PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION CONTAINED IN ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG THE UNDERSIGNED.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date referenced in the first paragraph of this Agreement.
BORROWER:
Address: 0000 Xxxxxxxxxx Xxxxxxx Xxxxx AMCAST INDUSTRIAL CORPORATION
Xxxxxx, Xxxx 00000
Attention: President and CEO By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: CFO
SENIOR LENDERS:
Address: 000 Xxxxxx Xxxxxx XXXXXXX NATIONAL ASSOCIATION,
Xxxxxxxxx, Xxxx 00000-0000 as LIFO Credit Agreement Agent
Attention: Xxxx X. Xxxxx and LIFO Credit Agreement Bank
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: S.V.P.
Address: One Wall Street THE BANK OF NEW YORK
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Address: 000 X.Xxxxx Xxxxxx BANK ONE INDIANA, N.A.
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Address: Credit Agricole Indosuez CREDIT AGRICOLE INDOSUEZ
00 Xxxx Xxxxxx Xxxxxx, Xxx.0000
Xxxxxxx, XX 00000 By: /s/ Xxxxx Xxxxxx
Attention: Xxxxx Xxxxxx Name: Xxxxx Xxxxxx
Title: Vice President
and: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: V.P./Sr.Rel.Mgr.
Address: Comerica Bank COMERICA BANK
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000 By: /s/ X. X. Xxxxxxxx
Attention: X.X. Xxxxxxxx Name: X. X. Xxxxxxxx
Title: First Vice President
Address: 0 X. Xxxx Xxxxxx NATIONAL CITY BANK
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
Address: 000 X.Xxxxx Xxxxxx BANK ONE INDIANA, N.A.
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Address: 000 0xx Xxxxxx Xxxxx FIRSTAR BANK, N.A.
Xxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: AVP/Its Attorney-in-Fact
SUBORDINATED LENDERS:
Address: 000 Xxxxxx Xxxxxx XXXXXXX NATIONAL ASSOCIATION,
Xxxxxxxxx, Xxxx 00000-0000 as Existing Credit Agreement Agent,
Attention: Xxxx X. Xxxxx an Existing Credit Agreement Bank
and as the Collateral Agent
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: S.V.P.
Address: One Wall Street THE BANK OF NEW YORK
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Address: 000 X.Xxxxx Xxxxxx BANK ONE INDIANA, N.A.
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Address: Credit Agricole Indosuez CREDIT AGRICOLE INDOSUEZ
00 Xxxx Xxxxxx Xxxxxx, Xxx.0000
Xxxxxxx, XX 00000 By: /s/ Xxxxx Xxxxxx
Attention: Xxxxx Xxxxxx Name: Xxxxx Xxxxxx
Title: Vice President
and: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: V.P./Sr.Rel.Mgr.
Address: 0 X. Xxxx Xxxxxx NATIONAL CITY BANK
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
Address: 000 X.Xxxxx Xxxxxx BANK ONE INDIANA, N.A.
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Address: 000 0xx Xxxxxx Xxxxx FIRSTAR BANK, N.A.
Xxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: AVP/Its Attorney-in-Fact
Address: COMERICA BANK
Attention: By: /s/ X. X. Xxxxxxxx
Name: X. X. Xxxxxxxx
Title: First Vice President
Address: IntesaBci - Chicago Branch INTESABCI - CHICAGO BRANCH
One Xxxxxxx Street By: /s/ X. Xxxxxxx
Xxx Xxxx, XX 00000 Name: X. Xxxxxxx
Attention: X. Xxxxxxx Title: FVP/Deputy Manager
and /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Vice President
Address: Unicredito Italiano SPA UNICREDITO ITALIANO SPA
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000 By: /s/ Xxxxxxxxxxx X. Xxxxx
Attention: Xxxxxxxxxxx Xxxxx Name: Xxxxxxxxxxx X. Xxxxx
Title: FVP & Deputy Manager
and /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
Address: San Paolo IMI S.p.A. SAN PAOLO IMI S.p.A.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
and /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: G.M.
Address: Principal Life Insurance Co. PRINCIPAL LIFE INSURANCE
000 Xxxxx Xxxxxx XXXXXXX
Xxx Xxxxxx, Xxxx 00000
Attention: X. Xxxxxxxxx By: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
Name: Xxxxxxxxxxx X. Xxxxxxxxx
Title: Counsel
Address: Northwestern Mutual Life Xxx.Xx. THE NORTHWESTERN MUTUAL LIFE
000 Xxxx Xxxxxxxxx Xxxxxx INSURANCE COMPANY
Xxxxxxxxx, XX 00000 By: /s/ Xxxxxxx Xxxxxx
Attention: Xxxxxxx Xxxxxx Name: Xxxxxxx Xxxxxx
Title: VP & Attorney-in-fact
Address: 000 0xx Xxxxxx Xxxxx FIRSTAR BANK, N.A.
Xxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: AVP/Its Attorney-in-Fact
Address: 000 Xxxxxx Xxxxxx XXXXXXX NATIONAL ASSOCIATION,
Xxxxxxxxx, Xxxx 00000-0000 as a Line of Credit Lender
Attention: Xxxx X. Xxxxx
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: S.V.P.
Schedule 4
Line of Credit Lenders
Lender Maximum
------ Amount of Facility
------------------
KeyBank National Association $10,000,000
Firstar Bank, National Association $12,032,783
EXHIBIT A
OUTSTANDING INDEBTEDNESS
Facility Amount
-------- ------
Existing Credit Agreement $111,337,061.68
Note Agreements
Principal Note Agreement $ 25,000,000.00
Northwestern Note Agreement $ 25,000,000.00
Line of Credit Documents
KeyBank $ 4,200,000.00
Firstar $ 12,032,783.00
EXHIBIT B
EXISTING BANK DEFAULTS
1. Default under Section 5.7(a) (Interest Coverage) of the Existing
Credit Agreement.
2. Default under Section 5.7(b) (Leverage) of the Existing Credit
Agreement.
3. Failure to repay LIBOR Loans made prior to March 4, 2001 at the end of
the Interest Periods applicable thereto.
4. Cross- Default to Note Agreements.
5. Cross-Default under the CTC Guaranty.
EXHIBIT C
EXISTING NOTEHOLDER DEFAULTS
EXHIBIT D
EXISTING LINE OF CREDIT DEFAULTS
1. KeyBank National Association - Failure to repay the Advance in the
amount of $4,200,000 on the Maturity Date applicable thereto.
2. Firstar Bank, NA - None
EXHIBIT E
WARRANTS TO BE ISSUED
Existing Lenders Total Warrants Initial Warrants Subsequent Warrants
---------------- -------------- ---------------- -------------------
Bank One 100,239.3555 50,119.6778 50,119.6778
KeyBank 89,101.6493 44,550.8247 44,550.8247
Firstar 44,550.8247 22,275.4123 22,275.4123
Credit Agricole 44,550.8247 22,275.4123 22,275.4123
Comerica 38,981.9716 19,490.9858 19,490.9858
National City Bank 38,981.9716 19,490.9858 19,490.9858
BONY 22,275.4123 11,137.7062 11,137.7062
BCI 22,275.4123 11,137.7062 11,137.7062
UniCredito 22,275.4123 11,137.7062 11,137.7062
San Paolo 22,275.4123 11,137.7062 11,137.7062
Line of Credit Lenders
KeyBank 16,800.0000 8,400.0000 8,400.0000
Firstar 48,131.1320 24,065.5660 24,065.5660
Noteholders
Principal Mutual 100,000.0000 100,000.0000 0
Northwestern 100,000.0000 100,000.0000 0
------------ ------------ -------------
710,439.3787 455,219.6894 255,219.6894
EXHIBIT F
FORM OF WARRANT AGREEMENT
[See Attached]
