exv10w3



 





Exhibit 10.3




Execution Copy



“Notwithstanding anything herein to the contrary, the liens and security interests granted to the
Agent pursuant to this Agreement and the exercise of any right or remedy by the Agent hereunder,
are subject to the limitations and provisions of the Intercreditor Agreement dated as of December
29, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the
“Intercreditor Agreement”), among Bank of America, N.A., The Bank of New York Trust Company, N.A.,
Neenah Foundry Company and the Subsidiaries of Neenah Foundry Company party thereto. In the event
of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement,
the terms of the Intercreditor Agreement shall govern”.




SECURITY AGREEMENT




          THIS SECURITY AGREEMENT (this “Agreement”) is made as of the 29th day of December, 2006 by
each of the undersigned Lien Grantors (the “Lien Grantors”) in favor of The Bank of New York Trust
Company, N.A. for the benefit of the Secured Parties (as defined below). Certain capitalized terms
as used herein are defined in Section 1 hereof. Unless otherwise defined herein, capitalized terms
used herein and defined in the Indenture (as defined below) shall be used herein as therein defined
or, if not defined in the Indenture, as defined in the Code (as defined below).




W I T N E S S E T H:




     WHEREAS, Neenah Foundry Company (the “Issuer”) and The Bank of New York Trust Company, N.A.,
as trustee and collateral agent (in such capacity, the “Agent”), have entered into an Indenture,
dated as of December 29, 2006 (as amended, restated, supplemented or otherwise modified from time
to time, the “Indenture”), providing for the issuance of the 91/2% Senior Secured Notes due 2017
(“Notes”) of the Issuer, all as contemplated therein (with the holders from time to time of Notes
being referred to herein as the “Noteholders” and, together with the Agent, as the “Secured
Parties”);



     WHEREAS, the Issuer, various financial institutions from time to time party thereto and Bank
of America, N.A., as administrative agent and collateral agent (in such capacity, the “ABL Agent”),
are party to and amended and restated loan and security agreement, dated as of the date hereof (as
so amended and restated and as the same may be further amended, restated, supplemented or otherwise
modified from time to time, the “ABL Agreement”);



     WHEREAS, pursuant to the Note Guaranty, each Guarantor has jointly and severally guaranteed to
the Secured Parties the payment when due of all the Obligations;



     WHEREAS, it is a condition precedent to the issuance of Notes by the Issuer that each Lien
Grantor shall have executed and delivered to the Agent this Agreement;



 









 





     WHEREAS, each Lien Grantor will obtain benefits from the issuance of Notes by the Issuer under
the Indenture and, accordingly, desires to execute this Agreement in order to satisfy the condition
described in the preceding recital;



     NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:




	1.	 	DEFINITIONS. As used in this Agreement:





     “ABL Agent” shall have the meaning provided to such term in the recitals hereto.



     “ABL Agreement” shall have the meaning provided to such term in the recitals hereto.



     “Account Debtor” shall have the meaning provided to such term in the ABL Agreement as in
effect on the date hereof.



     “Agreement” shall have the meaning provided to such term in the preamble.



     “Cash Collateral Account” shall have the meaning provided to such term in Section 5.1.



     “Cash Distributions” shall mean dividends, interest and other distributions and payments
(including proceeds of liquidation, sale or other disposition) made or received in cash upon or
with respect to any Collateral.



     “Code” shall mean the Uniform Commercial Code as in effect from time to time in the State of
New York; provided that, if perfection or the effect of perfection or non-perfection or the
priority of any Lien granted hereunder on any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than New York, “Code” shall mean the Uniform Commercial Code
as in effect from time to time in such other jurisdiction for purposes of the provisions hereof
relating to such perfection, effect of perfection or non-perfection or priority.



     “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.



     “Computer Hardware and Software” shall mean all of each Lien Grantor’s rights (including
rights as licensee and lessee) with respect to (i) computer and other electronic data processing
hardware, including all integrated computer systems, central processing units, memory units,
display terminals, printers, computer elements, card readers, tape drives, hard and soft disk
drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral
devices and other related computer hardware; (ii) all Software and all software programs designed
for use on the computers and electronic data processing hardware described in clause (i) above,
including all operating system software, utilities and application programs in any form (source
code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever);
(iii) any firmware associated with any of the foregoing; and (iv) any documentation for hardware,
Software and firmware described in clauses (i), (ii) and (iii) above,



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including flow charts, logic diagrams, manuals, specifications, training materials, charts and
pseudo codes.



     “Environmental Laws” shall have the meaning provided to such term in the ABL Agreement as in
effect on the date hereof.



     “Event of Default” shall have the meaning provided to such term in Section 6.1.



     “Intellectual Property” shall have the meaning provided to such term in the ABL Agreement as
in effect on the date hereof.



     “Intellectual Property Mortgages” shall mean the Intellectual Property Mortgages entered into
between the Agent and certain Lien Grantors in respect of the Intellectual Property described
therein for the purpose of establishing the Agent’s Liens with respect to such Intellectual
Property.



     “Lien Grantors” shall have the meaning provided to such term in the preamble.



     “Liquid Investment” means a Permitted Investment (other than commercial paper) that matures
within 30 days after it is first included in the Collateral.



     “Mortgage” shall mean a mortgage creating a Lien on real property in favor of the Agent for
the benefit of the Secured Parties and with such changes in the form thereof as the Agent shall
request for the purpose of conforming to local practice for similar instruments in the jurisdiction
where such real property is located.



     “Noteholders” shall have the meaning provided to such term in the recitals hereto.



     “Noteholder Documents” shall mean, collectively, this Agreement, the Indenture, the Note
Guaranty, the Perfection Certificate and all other agreements, instruments and documents now or
hereafter executed and/or delivered by any Lien Grantor to the Agent or any other Secured Party in
order to evidence or secure the Obligations, as each may be amended, restated, supplemented or
otherwise modified from time to time.



     “Notes” shall have the meaning provided to such term in the recitals hereto.



     “Obligations” shall mean, as to a Lien Grantor, all principal of all Notes outstanding from
time to time, all interest on such Notes (including Post-Petition Interest), all other obligations
with respect to the Notes and all other advances, debts, liabilities, obligations, covenants and
duties arising, due or payable from such Lien Grantor to the Agent or any other Secured Party of
any kind or nature, present or future, in each case arising under the Note Guaranty, the Indenture
or any of the other Noteholder Documents to which such Lien Grantor is a party, 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. With respect to each
Lien Grantor that is a Guarantor, the term includes, without limitation, all interest, charges,
expenses, fees, attorneys’ fees and any other sums chargeable to such Lien Grantor under the Note
Guaranty, this Agreement or any of the other Noteholder Documents.



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     “Perfection Certificate” shall mean a certificate substantially in the form of Exhibit
A hereto, completed and supplemented with the schedules contemplated thereby to the
satisfaction of the Agent, and signed by an officer of each Lien Grantor.



     “Permitted Investments” shall mean investments in:




	 	(a)	 	direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the United States),
in each case maturing within one year from the date of acquisition thereof;
	 
	 	(b)	 	commercial paper maturing within 270 days from the date of acquisition thereof
and having, at such date of acquisition, the highest credit rating obtainable from S&P
or from Moody’s;
	 
	 	(c)	 	certificates of deposit, banker’s acceptances and time deposits maturing within
180 days from the date of acquisition thereof issued or guaranteed by or placed with,
and money market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States or any State thereof
which has a combined capital and surplus and undivided profits of at least
$500,000,000; and
	 
	 	(d)	 	fully collateralized repurchase agreements with a term of not more than 30 days
for securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above.





     “Personal Property Collateral” shall mean all property included in the Collateral except Real
Property Collateral.



     “Property” shall mean any interest of any Lien Grantor in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.



     “Post-Petition Interest” shall mean any interest that accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any
one or more of the Lien Grantors (or would accrue but for the operation of applicable bankruptcy or
insolvency laws), whether or not such interest is allowed or allowable as a claim in any such
proceeding.



     “Real Property Collateral” shall mean all real Property included in the Collateral.



     “Secured Parties” shall have the meaning provided to such term in the recitals hereto.


The foregoing definitions shall be equally applicable to the singular and plural of the defined
terms.





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	2.	 	SECURITY INTEREST.





     2.1. Security Interest in Collateral. To secure the prompt payment and performance to
the Agent and each other Secured Party of the Obligations, each Lien Grantor hereby grants to the
Agent, for the benefit of the Secured Parties, a continuing Lien upon all of such Lien Grantor’s
assets, including all of the following Property and interests in Property of such Lien 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;
	 
	 	(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 (of every jurisdiction whatsoever);
	 
	 	(r)	 	Letter-of-Credit Rights;




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	 	(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) the Agent will not enforce its Lien in the applicable Lien Grantor’s rights under such
lease, license, contract, permit, Document or Instrument (other than in respect of the Proceeds
thereof) for so long as such prohibition continues, and (ii) to the extent a violation of any such
prohibition caused by the Lien under this Section 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 (other than in respect of
the Proceeds thereof) shall not constitute Collateral for so long as such prohibition continues; it
being understood that upon request of the Agent, such Lien Grantor will in good faith use
reasonable efforts to obtain consent for the creation of a Lien in favor of the Agent (and to the
Agent’s enforcement of such Lien) in any lease, license, contract, permit, Document or Instrument
that prohibits any assignment thereof or the grant of a Lien therein; and provided,
further, that no Lien is granted in any “intent to use” trademark applications until such
time as a verified statement of use is filed.




     2.2. Other Collateral.



          2.2.1. Commercial Tort Claims. Each Lien Grantor shall promptly notify the Agent in
writing upon having a Commercial Tort Claim that arises after the Issue Date against any third
party and, upon request of the Agent, promptly enter into an amendment to this Agreement and do
such other acts or things reasonably deemed necessary by the Agent to give the Agent a security
interest in any such Commercial Tort Claim. Each Lien 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 Lien Grantor shall promptly (i) notify the Agent in
writing upon acquiring or otherwise obtaining any Collateral after the date hereof that consists of
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




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$1,000,000 and, upon the request of the Agent, promptly execute such other documents, and do
such other acts or things deemed appropriate by the Agent to deliver to the Agent control with
respect to such Collateral; (ii) notify the Agent in writing upon acquiring or otherwise obtaining
any Collateral after the date hereof that consists of Documents or Instruments in (or relating to)
an amount in excess of $250,000 and, upon the request of the Agent, will promptly execute such
other documents, and do such other acts or things deemed appropriate by the Agent to deliver to the
Agent possession of such Documents which are negotiable and Instruments, and, with respect to
nonnegotiable Documents, to have such nonnegotiable Documents issued in the name of the Agent;
(iii) notify the Agent in writing upon acquiring or otherwise obtaining any Collateral after the
date hereof that consists of motor vehicles and other Goods subject to a certificate of title
statute having an amount in excess of $250,000 and, upon the request of the Agent, promptly deliver
such certificates of title, execute such other documents, and do such other acts or things deemed
appropriate by the Agent to cause the Agent to have a perfected security interest with respect to
such Collateral; and (iv) with respect to any Collateral having a value in excess of $250,000 that
is in the possession of a third party, other than Certificated Securities and Goods covered by a
Document, obtain an acknowledgement from the third party that it is holding the Collateral for the
benefit of the Agent.




     2.3. Lien Perfection; Further Assurances. Each Lien Grantor shall execute such
instruments, assignments or documents as are necessary to perfect the Agent’s Lien upon any of the
Collateral and shall take such other action as may be required to perfect or to continue the
perfection of the Agent’s Lien upon the Collateral. Unless prohibited by applicable law, each Lien
Grantor hereby authorizes the Agent to execute and file any such financing statement, including,
without limitation, financing statements that indicate the Collateral (i) as all assets of such
Lien 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 Lien Grantor’s behalf. Each
Lien Grantor also hereby ratifies its authorization for the Agent to have filed in any jurisdiction
any like financing statements or amendments thereto if filed prior to the date hereof. The parties
agree that a carbon, photographic or other reproduction of this Agreement shall be sufficient as a
financing statement and may be filed in any appropriate office in lieu thereof. At the Agent’s
request, each Lien Grantor shall also promptly execute or cause to be executed and shall deliver to
the Agent any and all documents, instruments and agreements reasonably deemed necessary by the
Agent to give effect to or carry out the terms of the Noteholder Documents.


3. REPRESENTATIONS AND WARRANTIES. Each Lien Grantor represents and warrants that:




     3.1. Such Lien Grantor is duly organized, validly existing and in good standing under the laws
of the jurisdiction identified as its jurisdiction of organization in the Perfection Certificate.



     3.2. Such Lien Grantor has good and marketable title to all its Collateral (subject to
exceptions that are, in the aggregate, not material), free and clear of any Liens other than
Permitted Liens.



     3.3. Such Lien Grantor has not performed any acts that might prevent the Agent from enforcing
any of the provisions of the Noteholder Documents or that would limit the Agent in



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any such enforcement. No financing statement, security agreement, mortgage or similar or
equivalent document or instrument covering all or part of the Collateral owned by such Lien Grantor
is on file or of record in any jurisdiction in which such filing or recording would be effective to
perfect or record a Lien on such Collateral, except financing statements, mortgages or other
similar or equivalent documents with respect to Permitted Liens. After the Issue Date, no
Collateral owned by such Lien Grantor will be in the possession or under the control of any other
Person having a claim thereto or security interest therein, other than a Permitted Lien.



     3.4. The Agent’s Liens on all Personal Property Collateral owned by such Lien Grantor (a) have
been validly created, (b) will attach to each item of such Collateral on the Issue Date (or, if
such Lien Grantor first obtains rights thereto on a later date, on such later date) and (c) when so
attached, will secure the Obligations.



     3.5. When the relevant Mortgages have been duly executed and delivered, the Agent’s Liens on
all Real Property Collateral owned by such Lien Grantor as of the Issue Date granted thereunder
will have been validly created and will secure the Obligations. When such Mortgages have been duly
recorded, such Liens will rank prior to all other Liens (except Permitted Liens) on such Real
Property Collateral.



     3.6. The Lien Grantors have delivered the Perfection Certificate to the Agent. The
information set forth therein is correct and complete as of the Issue Date. Within 60 days after
the Issue Date, such Lien Grantor will furnish to the Agent a file search report from each relevant
UCC filing office listed in the Perfection Certificate, showing the filing made at such filing
office to perfect the Agent’s Liens on the Collateral.



     3.7. When UCC financing statements describing the Collateral set forth in Exhibit D to
the Perfection Certificate have been filed in the offices specified in such Perfection Certificate,
the Agent’s Liens granted hereunder will constitute perfected security interests in the Personal
Property Collateral owned by such Lien Grantor to the extent that a security interest therein may
be perfected by filing pursuant to the Code in such jurisdictions, prior to all Liens and rights of
others therein except Permitted Liens. Except for (a) the filing of such UCC financing statements,
(b) the filing of the Intellectual Property Mortgages and (c) the due recordation of the Mortgages,
no registration, recordation or filing with any governmental body, agency or official is required
in connection with the execution or delivery of the Noteholder Documents or is necessary for the
validity or enforceability thereof or for the perfection or due recordation of the Liens granted
hereunder or for the enforcement of such Liens.


4. COVENANTS. Each Lien Grantor covenants and agrees as follows:




     4.1. Location of Collateral. All Collateral, other than Goods in transit, motor
vehicles, Goods in the possession of employees in the ordinary course of business and other
miscellaneous immaterial items of Collateral not having a value that exceeds $250,000 in the
aggregate for all Lien Grantors, will at all times be kept by a Lien Grantor, or a bailee,
distributor, consignee, warehousemen or similar party of a Lien Grantor, at one or more of the
business locations set forth in Exhibit B to the Perfection Certificate, as updated by such
Lien Grantor providing prior written notice to the Agent of any new location.



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     4.2. Insurance of Collateral.



          4.2.1. Each Lien Grantor shall maintain and pay for insurance upon all Collateral wherever
located and with respect to the business of such Lien Grantor, covering casualty, hazard, public
liability, workers’ compensation, business interruption and such other risks. Borrowers shall
deliver certified copies of such policies to the Agent as promptly as practicable, with
satisfactory lender’s loss payable endorsements, naming the Agent (on behalf of the Secured
Parties) jointly with the ABL Agent as a loss payee, assignee or additional insured, as
appropriate, as its interest may appear, showing only such other loss payees, assignees and
additional insureds as are satisfactory to the Agent and with respect to business interruption
insurance, an executed collateral assignment thereof. Each policy of insurance or endorsement
shall contain a clause requiring the insurer to give not less than 10 days’ prior written notice to
the Agent in the event of cancellation of the policy for nonpayment of premium and not less than 30
days’ prior written notice to the Agent in the event of cancellation of the policy for any other
reason whatsoever and a clause specifying that the interest of the Agent shall not be impaired or
invalidated by any act or neglect of any Lien Grantor or the owner of the Property or by the
occupation of the premises for purposes more hazardous than are permitted by said policy. Each
Lien Grantor agrees to deliver to the Agent, promptly as rendered, true copies of all reports made
in any reporting forms to insurance companies.




     4.3. Protection of Collateral. Neither the Agent nor any other Secured Party shall be
liable or responsible in any way for the safekeeping of any of the Collateral or for any loss or
damage thereto (except for reasonable care in the custody thereof while any Collateral is in the
Agent’s or such Secured Party’s actual possession) or for any diminution in the value thereof, or
for any act or default of any warehouseman, carrier, forwarding agency, or other person whomsoever,
but the same shall be at the relevant Lien Grantors’ sole risk.



     4.4. Administration of Accounts. Each Lien Grantor shall keep accurate and complete
records of its Accounts and all payments and collections thereon.



     4.5. Inventory. Each Lien Grantor shall keep accurate and complete records of its
Inventory.



     4.6. Equipment. Each Lien Grantor shall keep its Equipment in good operating
condition and repair, reasonable wear and tear excepted; prevent any of its material Equipment from
becoming affixed to any real Property leased to such Lien Grantor such that an interest arises
therein under the real estate laws of the applicable jurisdiction, unless the landlord of such real
Property has executed a landlord waiver or leasehold mortgage in favor of the Agent; and prevent
any of its material Equipment from becoming an accession to any personal Property other than
Equipment that is subject to first priority (except for Permitted Liens) Liens in favor of the
Agent. Each Lien 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 the Agent, each Lien Grantor shall deliver to the Agent any and all
evidence of ownership, if any, of any of its Equipment.




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5. CASH COLLATERAL ACCOUNT.




     5.1. The Agent will establish with respect to the Lien Grantors an account (the “Cash
Collateral Account”), in the name and under the exclusive control of the Agent, into which all
amounts owned by the Lien Grantors that are to be deposited therein pursuant to the Noteholder
Documents shall be deposited from time to time. The Cash Collateral Account will be operated as
provided in this Section 5.



     5.2. The Agent shall deposit the following amounts, as and when received by it, in the Cash
Collateral Account:




	 	(a)	 	each amount required by Section 11.02 of the Indenture to be
deposited in a Cash Collateral Account with respect to any sale, lease,
transfer or other disposition by a Lien Grantor of Primary Collateral;
	 
	 	(b)	 	each amount received by a Lien Grantor as Casualty Proceeds
required by Section 11.02 of the Indenture to be deposited in a Cash Collateral
Account; and
	 
	 	(c)	 	each amount realized or otherwise received by the Agent with
respect to assets of any Lien Grantor upon any exercise of remedies pursuant to
any Noteholder Document.




The Agent shall maintain such records and/or establish such sub-accounts as shall be required to
enable it to identify the amounts held in each Cash Collateral Account from time to time pursuant
to preceding clauses (a), (b) or (c), as applicable. The Agent shall withdraw and apply amounts
from the Cash Collateral Account as provided in the Indenture.




     5.3. All Cash Distributions received with respect to assets held in the Cash Collateral
Account shall be deposited therein promptly upon receipt thereof.



     5.4. Funds held in the Cash Collateral Account may, until withdrawn, be invested and
reinvested in such Liquid Investments as the relevant Lien Grantor shall request in writing from
time to time.



     5.5. If an Event of Default shall have occurred and be continuing, the Agent may (a) liquidate
any or all investments held in the Cash Collateral Account and/or (b) withdraw any amounts held
therein and apply such amounts as provided in Section 6.10 of the Indenture.



     5.6. If immediately available cash on deposit in any Collateral Account is not sufficient to
make any distribution or withdrawal to be made pursuant hereto, the Agent will cause to be
liquidated, as promptly as practicable, such investments held in or credited to the Cash Collateral
Account as shall be required to obtain sufficient cash to make such distribution or withdrawal and,
notwithstanding any other provision hereof, such distribution or withdrawal shall not be made until
such liquidation has taken place.





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6. DEFAULTS; RIGHTS AND REMEDIES ON DEFAULT.





     6.1. Event of Default. Each of the following occurrences shall constitute a default
under this Agreement (each, an “Event of Default”):




	 	(a)	 	Breach of Indenture. The occurrence of any Event of
Default under the Indenture; or
	 
	 	(b)	 	Breach under Noteholder Documents. Any Lien Grantor’s
failure to pay when due any Obligations, or the occurrence of any breach of the
terms and conditions contained in any Noteholder Document.





     6.2. Remedies. Upon the occurrence and during the continuance of an Event of Default,
the Agent shall have and may upon direction of the other Secured Parties exercise from time to time
the following other rights and remedies, provided, however, that it shall be under
no obligation to so exercise:




	 	(a)	 	All of the rights and remedies of a secured party under the
Code or under other applicable law, and all other legal and equitable rights to
which the Agent or the other Secured Parties 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 Noteholder
Documents, and none of which shall be exclusive.
	 
	 	(b)	 	The right to take immediate possession of the Collateral, and
to (i) require each Lien Grantor to assemble the Collateral, at such Lien
Grantor’s expense, and make it available to the Agent at a place designated by
the Agent which is reasonably convenient to both parties, and (ii) enter any
premises where any of the Collateral shall be located and to keep and store the
Collateral on said premises until sold (and if said premises be the Property of
a Lien Grantor, such Lien Grantor agrees not to charge the Agent 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 the Agent,
in its sole discretion, may deem advisable. The Agent may, at the Agent’s
option, disclaim any and all warranties regarding the Collateral in connection
with any such sale. Each Lien Grantor agrees that 10 days’ written notice to
such Lien 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 the Agent may designate in said notice. The Agent shall have the
right to conduct such sales on any Lien Grantor’s premises, without charge
therefor, and such sales may be adjourned from time to time in accordance with
applicable law. The Agent shall have the right to sell, lease or otherwise
dispose of the Collateral, or any part thereof, for cash, credit or any
combination thereof, and the Agent, on behalf of the Secured Parties, may
purchase all or any part of the Collateral at public or, if




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	 	 	 	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 Lien Grantors shall remain liable to the
Agent and the other Secured Parties therefor. Any surplus shall be remitted
to whomsoever shall be legally entitled to the same.
	 
	 	(d)	 	The Agent is hereby granted a non-exclusive license or other
right to use, without charge, effective upon the occurrence and continuance of
an Event of Default, the Lien Grantors’ labels, patents, copyrights, licenses,
rights of use of any name, trade secrets, tradenames, trademarks and
advertising matter, or any Property of a similar nature, as it pertains to the
Collateral, in completing, advertising for sale and selling any Collateral and
the Lien Grantors’ rights under all licenses and all franchise agreements shall
inure to the Agent’s benefit.





     6.3. Remedies Cumulative; No Waiver. All covenants, conditions, provisions,
warranties, guaranties, indemnities, and other undertakings of each Lien Grantor contained in this
Agreement and the other Noteholder Documents, or in any document referred to herein or contained in
any agreement supplementary hereto or in any schedule or in the Note Guaranty, given to the Agent
or any other Secured Party or contained in any other agreement between any Secured Party and such
Lien Grantor or between the Agent and such Lien 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 such Lien Grantor herein contained. The failure or
delay of the Agent or any other Secured Party to require strict performance by any Lien 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
Obligations owing or to become owing from such Lien Grantor to the Agent and each other Secured
Party have been fully satisfied. None of the undertakings, agreements, warranties, covenants and
representations of any Lien Grantor contained in this Agreement or any of the other Noteholder
Documents and no Default or Event of Default by any Lien Grantor under this Agreement or any other
Noteholder Document shall be deemed to have been suspended or waived by the Secured Parties, 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 the Agent and directed to such Lien Grantor.


7. MISCELLANEOUS.




     7.1. Power of Attorney. Each Lien Grantor hereby irrevocably designates, makes,
constitutes and appoints the Agent (and all Persons designated by the Agent) as such Lien Grantor’s
true and lawful attorney (and agent-in-fact), solely with respect to the matters set forth in this
Section 7.1, and the Agent, or the Agent’s agent, may, without notice to such Lien Grantor and in
such Lien Grantor’s or the Agent’s name, but at the cost and expense of such Lien Grantor:



12









 





          7.1.1. At such time or times as the Agent, in its sole discretion, may determine, endorse such
Lien Grantor’s name on any checks, notes, acceptances, drafts, money orders or any
other evidence of payment or proceeds of the Collateral which come into the possession of the
Agent or under the Agent’s control.




          7.1.2. At such time or times after the occurrence and during the continuance of an Event of
Default (provided that the occurrence of an Event of Default shall not be required with
respect to clauses (iv), (vi) (except as set forth below in such clause (vi)), (viii) and (ix)
below), as the Agent or its agent in its sole discretion may determine: (i) demand payment of the
Accounts from the Account Debtors, enforce payment of the Accounts by legal proceedings or
otherwise, and generally exercise all of the Lien Grantors’ 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 the Agent deems advisable, and at the Agent’s option,
with all warranties regarding the Collateral disclaimed; (iv) take control, in any manner, of any
item of payment or proceeds relating to any Collateral; (v) prepare, file and sign any Lien
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; (vi) receive, open and dispose of all mail addressed to any Lien 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 the Agent may designate until such time as no Event
of Default exists; provided, that any contents of such mail other than any checks, notes,
acceptances, drafts, money orders or other evidence of payment or proceeds of the Collateral shall
be furnished by the Agent to such Lien Grantor in accordance with written instructions provided by
such Lien Grantor; (vii) endorse the name of any Lien Grantor upon any of the items of payment or
proceeds relating to any Collateral and deposit the same to the account of the Agent on account of
the Obligations; (viii) endorse the name of any Lien Grantor upon any chattel paper, document,
instrument, invoice, freight bill, bill of lading or similar document or agreement relating to any
Collateral; (ix) use any Lien Grantor’s stationery and sign the name of such Lien Grantor to
verifications of the Accounts and notices thereof to Account Debtors (provided that the Agent shall
deliver drafts of any such written communication to such Lien Grantor prior to the delivery thereof
to any Account Debtors); (x) use the information recorded on or contained in any data processing
equipment and Computer Hardware and Software relating to the Accounts, Inventory, Equipment and any
other Collateral; (xi) make and adjust claims under policies of insurance to the extent related to
the Collateral; and (xii) do all other acts and things necessary, to fulfill any Lien Grantor’s
obligations under this Agreement.




          7.1.3. The power of attorney granted hereby shall constitute a power coupled with an interest
and shall be irrevocable.




     7.2. Indemnity. Each Lien Grantor jointly and severally hereby agrees to indemnify
the Agent and each other Secured Party (and each of their Affiliates) and hold the Agent and each
other Secured Party (and each of their Affiliates) harmless from and against any liability, loss,
damage, claim, suit, action or proceeding suffered or incurred by any such Person (including
reasonable documented attorneys fees and legal expenses) as the result of such Lien Grantor’s
failure to observe, perform or discharge such Lien Grantor’s duties hereunder, except those



13









 




determined by a court of competent jurisdiction in a final nonappealable judgment to have been
caused by the gross negligence or willful misconduct of the Agent or such Secured Party.
In addition, each Lien Grantor shall defend the Agent and each other Secured Party (and each
of their Affiliates) against and hold them harmless from all claims of any Person with respect to
the Collateral (except those resulting from the bad faith, gross negligence or intentional
misconduct of any such Person). Without limiting the generality of the foregoing, each Lien
Grantor shall indemnify and hold harmless the Agent and each other Secured Party (and each of their
Affiliates) from and against any loss, damage, cost, expense or liability directly or indirectly
arising out of or under Environmental Laws, or attributable to the use, generation, storage,
release, threatened release, discharge, disposal or presence of any pollutants, flammables,
explosives, petroleum (including crude oil) or any fraction thereof, radioactive materials,
hazardous wastes, toxic substances or related materials, including, without limitation, any
substances defined as or included in the definition of toxic or hazardous substances, wastes, or
materials under any Environmental Law, except for those losses, damages, costs, expenses or
liabilities determined by a court of competent jurisdiction in a final nonappealable judgment to
have been caused by the gross negligence or willful misconduct of the Agent or such Secured Party.
Notwithstanding any contrary provision in this Agreement, the obligation of each Lien Grantor under
this Section 7.2 shall survive the payment in full of the non-indemnity Obligations and the
termination of this Agreement.




     7.3. Complete Agreement; Sale of Interest.




	 	(a)	 	The Noteholder 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 Lien
Grantor and the Agent. No Lien Grantor may sell, assign or transfer any
interest in this Agreement or any of the other Noteholder Documents, or any of
the Obligations or any portion thereof, including, without limitation, such Lien
Grantor’s rights, title, interests, remedies, powers and duties hereunder or
thereunder.
	 
	 	(b)	 	Each Lien Grantor hereby consents to any Secured Party’s
participation, sale, assignment, transfer or other disposition, at any time or
times hereafter, of this Agreement, the Notes, any of the other Noteholder
Documents or any of the Obligations, or of any portion hereof or thereof,
including, without limitation, such Secured Party’s rights, title, interests,
remedies, powers and duties hereunder or thereunder, subject to the conditions
set forth in the Indenture.





     7.4. Modification of Agreement. No amendment, modification or waiver of any provision
of this Agreement nor consent to any departure by any Lien Grantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Agent and such Lien Grantor, and
then such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given.



     7.5. Reimbursement of Expenses. If, at any time or times regardless of whether or not
an Event of Default then exists, (i) the Agent incurs reasonable and documented legal or



14









 







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 Noteholder Documents, any
amendment of or modification of this Agreement or any of the other Noteholder Documents or (2)
the administration of this Agreement or any of the other Noteholder Documents and the transactions
contemplated hereby and thereby; or (ii) the Agent or any other Secured Party 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 the
Agent, any other Secured Party, any Lien Grantor or any other Person) relating to the Collateral,
this Agreement or any of the other Noteholder Documents or any Lien Grantor’s affairs; (2) any
attempt to enforce any rights of the Agent or any other Secured Party against any Lien Grantor or
any other Person which may be obligated to the Agent or any other Secured Party by virtue of this
Agreement or any of the other Noteholder 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 the Agent or any other Secured
Party, as applicable, shall be charged to the Lien Grantors; provided, that the Lien
Grantors shall not be responsible for such expenses, costs and out-of-pocket expenses to the extent
incurred because of the gross negligence, bad faith or willful misconduct of the Agent or such
Secured Party. All amounts chargeable to the Lien Grantors under this Section 7.5 shall be
Obligations secured by all of the Collateral, shall be payable within 15 days following demand to
the Agent or such other Secured Party, as the case may be, and shall bear interest from the date
due and owing until paid in full at the rate applicable to the Notes. Each Lien Grantor shall also
reimburse the Agent for expenses incurred by the Agent in its administration of the Collateral to
the extent and in the manner provided in the Indenture.



     7.6. Perfection by Possession or Control. With respect to any provision in this
Agreement which requires any Lien Grantor to deliver possession of any negotiable document,
instrument, certificated securities, promissory notes or other Collateral requiring possession
thereof in order to perfect the security interest of the Agent therein under the Code, or which
requires the Agent to have “control” (as defined in the Code) of investment property or deposit
accounts, in order to perfect the security interest of the Agent therein, until the Discharge of
the Bank Obligations (as defined in the Intercreditor Agreement) has occurred, no such delivery to
the Agent shall be required to the extent such Collateral is delivered to the Bank Agent (as
defined in the Intercreditor Agreement) in accordance with the Bank Documents (as defined in the
Intercreditor Agreement), it being understood that the Bank Agent is acting as non-fiduciary agent
for the benefit of the Agent solely for the purpose of perfecting the security interest in such
Collateral pursuant to the terms of the Intercreditor Agreement.



     7.7. 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.



     7.8. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of each Lien Grantor, the Agent and each other Secured Party.




15










 





     7.9. Notice. Except as otherwise provided herein, all notices, requests and
demands to or upon a party hereto, to be effective, shall be in writing, return receipt requested,
by personal delivery against receipt, by overnight courier or by facsimile and, unless otherwise
expressly provided herein, shall be deemed to have been validly served, given, delivered or
received, as applicable, immediately when delivered against receipt, one Business Day after deposit
with an overnight courier or, in the case of facsimile notice, when sent, addressed as follows:



	 	 	 	 	 
	 

	 	If to the Agent:
	 	The Bank of New York Trust Company, N.A.
	 

	 	 	 	2 North LaSalle Street
	 

	 	 	 	Suite 1020
	 

	 	 	 	Chicago, IL 60602
	 

	 	 	 	Attention:      Corporate Trust Administration
	 

	 	 	 	Fax No.:         (312) 827-8542
	 
	 	 	 	 
	 

	 	If to a Lien Grantor:
	 	c/o Neenah Foundry Company
	 

	 	 	 	2121 Brooks Avenue
	 

	 	 	 	Neenah, Wisconsin 54957
	 

	 	 	 	Attention:      Mr. Gary LaChey
	 

	 	 	 	Fax No.:         (920) 729-3633
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Quarles & Brady LLP
	 

	 	 	 	411 East Wisconsin Avenue
	 

	 	 	 	Milwaukee, Wisconsin 53202-4497
	 

	 	 	 	Attention:      Andrew M. Barnes, Esq.
	 

	 	 	 	Fax No.:         (411) 277-5105







or to such other address as each party may designate for itself by notice given in
accordance with this Section 7.8.



     7.10. Release; Termination.



          7.10.1. Upon any sale, lease, transfer or other disposition of any item of Collateral that is
consummated in compliance with the Indenture, the Agent shall execute and deliver such documents
that the relevant Lien Grantor may reasonably request to evidence the release of any such item of
Collateral from the security interests granted hereunder.




          7.10.2. Upon the maturity of the Notes 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 respective Lien Grantors. Upon such termination,
the Agent shall execute and deliver such documents that the Lien Grantors may reasonably request to
evidence such termination.




     7.11. Interpretation. No provision of this Agreement or any of the other Noteholder
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.



16









 





     7.12. Governing Law; Consent to Forum. THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED
AND DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN NEW YORK, NEW YORK. 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 THE AGENT’S LIEN UPON SUCH
COLLATERAL AND THE ENFORCEMENT OF THE AGENT’S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE
EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF 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 LIEN GRANTOR, THE AGENT OR ANY OTHER SECURED PARTY,
EACH LIEN GRANTOR HEREBY CONSENTS AND AGREES THAT THE COURTS OF THE STATE OF NEW YORK, SITTING IN
THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR, AT THE AGENT’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 SUCH LIEN GRANTOR ON THE ONE HAND AND THE AGENT OR ANY
OTHER SECURED PARTY 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 ANY AGREEMENT TO WHICH
ANY LIEN GRANTOR IS A PARTY, EACH LIEN GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH LIEN GRANTOR HEREBY WAIVES
ANY OBJECTION WHICH SUCH LIEN GRANTOR MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS. EACH LIEN 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 LIEN GRANTOR AT THE ADDRESS SET FORTH IN THIS AGREEMENT OR OTHERWISE
PROVIDED TO THE AGENT AS A NEW NOTICE ADDRESS IN ACCORDANCE WITH THE TERMS HEREOF AND THAT SERVICE
SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH LIEN GRANTOR’S ACTUAL RECEIPT THEREOF OR
FIVE (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 THE AGENT OR ANY OTHER SECURED PARTY TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY THE
AGENT OR ANY OTHER SECURED PARTY 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.



17









 





     7.13. Waivers. EACH LIEN GRANTOR IRREVOCABLY WAIVES (A) THE RIGHT TO TRIAL BY
JURY (WHICH THE AGENT 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 NOTEHOLDER 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 THE AGENT OR ANY OTHER SECURED PARTY, ON WHICH SUCH LIEN GRANTOR MAY
IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER THE AGENT OR ANY LENDER 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 THE AGENT TO EXERCISE ANY REMEDIES
HEREUNDER; (D) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS AND (E) NOTICE OF
ACCEPTANCE HEREOF. EACH LIEN GRANTOR ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL
INDUCEMENT TO THE AGENT’S ENTERING INTO THIS AGREEMENT AND THAT THE AGENT IS RELYING UPON THE
FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH SUCH LIEN GRANTOR. EACH LIEN 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.



     7.14. Incorporation by Reference. In connection with its appointment and acting
hereunder the Agent is entitled to all rights, privileges, immunities, protections, benefits and
indemnities provided to it as Trustee under the Indenture.



     7.15. Force Majeure. In no event shall the Agent be responsible or liable
for any failure or delay in the performance of its obligations hereunder arising out of or
caused by, directly or indirectly, forces beyond its control, including, without
limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military
disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware) services; it being
understood that the Agent shall use reasonable efforts which are consistent with accepted practices
in the banking industry to resume performance as soon as practicable under the circumstances.



     7.16. Limitation on Duty of Agent in Respect of Collateral; 




	 	(a)	 	Beyond the exercise of reasonable care in the custody thereof,
the Agent shall have no duty as to any Collateral in its possession or control
or in the possession or control of any agent or bailee or any income thereon or
as to preservation of rights against prior parties or any other rights
pertaining




18









 






	 	 	 	thereto and the Agent shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any
public office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral. The Agent shall be
deemed to have exercised reasonable care in the custody of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which it accords its own property and shall not be liable or responsible
for any loss or diminution in the value of any of the Collateral, by reason
of the act or omission of any carrier, forwarding agency or other agent or
bailee selected by the Agent in good faith.






	 	(b)	 	The Agent shall not be responsible for the existence, genuineness
or value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Liens granted in any of the Collateral, whether impaired
by operation of law or by reason of any of any action or omission to act on its
part hereunder, except to the extent such action or omission constitutes gross
negligence, bad faith or willful misconduct on the part of the Agent, for the
validity or sufficiency of the Collateral or any agreement or assignment
contained therein, for the validity of the title of the Lien Grantors to the
Collateral, for insuring the Collateral or for the payment of taxes, charges,
assessments or Liens upon the Collateral or otherwise as to the maintenance of
the Collateral.
	 
	 	(c)	 	Notwithstanding anything in this Agreement to the contrary and
for the avoidance of doubt, the Agent shall have no duty to act outside of the
United States in respect of any Collateral located in any jurisdiction other
than the United States.
	 
	 	(d)	 	The Lien Grantors agree to record and file, at their own expense,
financing statements (and continuation statements when applicable) with respect
to the Collateral now existing or hereafter created meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect, and maintain perfected the security interests in the Collateral
created hereunder and under the other Noteholder Documents, and to deliver a
file stamped copy of each such financing statement or other evidence of filing
to the Agent promptly thearafter. The Agent shall be under no obligation
whatsoever to file such financing statements or continuation statements or to
make any other filing under the Code.





19









 






     IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year specified
at the beginning hereof.



	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.,
	 	 	as Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roxane Ellwanger	 	 
	 

	 	 	 	 	 	 
	 	 	Title: Assistant Vice President  















 





NEENAH FOUNDRY COMPANY

ADVANCED CAST PRODUCTS, INC.

DALTON CORPORATION

DALTON CORPORATION, WARSAW MANUFACTURING FACILITY

DALTON CORPORATION, STRYKER MACHINING FACILITY CO.

DALTON CORPORATION, ASHLAND MANUFACTURING FACILITY

DALTON CORPORATION, KENDALLVILLE MANUFACTURING FACILITY

DEETER FOUNDRY, INC.

GREGG INDUSTRIES, INC.

MERCER FORGE CORPORATION

A&M SPECIALTIES, INC.

NEENAH TRANSPORT, INC.

CAST ALLOYS, INC.

BELCHER CORPORATION

PEERLESS CORPORATION,

each, as a Lien Grantor




	 	 	 	 	 
	 	Acting on behalf of each of the Lien Grantors

 	 
	 	By:  	/s/ Gary W. LaChey
 	 
	 	Title: Corporate Vice President - Finance 	 
	 	 	  and Chief Financial Officer