<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 31, 1996
------------------
TOWER AUTOMOTIVE, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-24644 41-1746238
- ---------------------------- ----------------------- ------------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
4508 IDS Center, Minneapolis, Minnesota 55402
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 342-2310
--------------
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 31, 1996, pursuant to the Stock Purchase Agreement dated May 31,
1996 among the Registrant, the Registrant's wholly owned subsidiary, R.J. Tower
Corporation, a Michigan corporation ("Tower"), and MascoTech, Inc., a Delaware
corporation ("MascoTech"), Tower acquired from MascoTech all of the issued and
outstanding capital stock of MascoTech Stamping Technologies, Inc., a Delaware
corporation ("MSTI"). MSTI's assets are located in Rochester Hills, Michigan,
Kendallville, Indiana, Upper Sandusky, Ohio and Bluffton, Ohio.
MSTI is engaged in the design, manufacturing, marketing and sales of
stampings used in chassis and suspension systems by North American car, mini-
van, and light truck manufacturers. The Registrant intends to continue to use
MSTI's assets in substantially the same manner as they were used prior to the
acquisition.
The aggregate purchase price of all of the issued and outstanding capital
stock of MSTI was approximately $79 million in cash, stock, and warrants.
Contingent consideration of up to $30 million is payable over the next three
years if MSTI achieves certain operating results over that period (including a
7% promissary note issued in favor of MascoTech payable approximately one year
following the acquisition in an aggregate principal amount of $5.0 million,
subject to reduction based on the operating profits of the MSTI facilities for
the 12 months following the acquisition). The purchase price was funded through
the issuance by Tower of $65 million of Senior Secured Notes and through
borrowings under Tower's First Amendment to Third Amended and Restated Credit
Agreement (the "Credit Agreement") with Comerica Bank, as agent. The Credit
Agreement provides a revolving credit facility of $75 million and letters of
credit of approximately $47.4 million. The aggregate purchase price was arrived
at through arm's length negotiations between the parties.
-2-
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired. The following financial
statements of MSTI are included herein beginning on page F-1:
Report of Independent Public Accountants
Statements of Net Assets Acquired as of
December 31, 1994 and 1995 and unaudited
as of March 31, 1996
Statements of Revenues and Expenses for each of the
three years in the period ended December 31, 1995
and unaudited for the three months ended March 31, 1995 and
1996
Statements of Cash Flows for each of the three
years in the period ended December 31, 1995
and unaudited for the three months ended March 31, 1995 and
1996
(b) Unaudited Pro Forma Financial Information. The following unaudited pro
forma financial information is included herein beginning on page F-11:
Introduction
Unaudited Pro Forma Statements of Operations
For the year ended December 31, 1995
Unaudited Pro Forma Statement of Operations
For the three months ended March 31, 1996
Notes to Unaudited Pro Forma Statements of Operations
Unaudited Pro Forma Balance Sheet as of
March 31, 1996
Notes to Unaudited Pro Forma Balance Sheet
(c) Exhibits.
+2.1 Stock Purchase Agreement, dated as of May 31, 1996, among Tower
Automotive, Inc., R.J. Tower Corporation and MascoTech, Inc.
*4.1 First Amendment to Third Amended and Restated Credit Agreement,
dated as of May 31, 1996, by and among R.J. Tower Corporation,
the financial institutions parties thereto and Comerica Bank, as
agent.
-3-
<PAGE>
*4.2 $39,000,000 Revolving Credit Note, dated as of May 31, 1996,
issued by R.J. Tower Corporation, a Michigan corporation, to
Comerica Bank.
*4.3 $18,000,000 Revolving Credit Note, dated as of May 31, 1996,
issued by R.J. Tower Corporation, a Michigan corporation, to Bank
of America Illinois.
*4.4 $18,000,000 Revolving Credit Note, dated as of May 31, 1996,
issued by R.J. Tower Corporation, a Michigan corporation, to
First Bank National Association.
4.5 [INTENTIONALLY OMITTED]
*4.6 Joinder Agreement to Amended and Restated Guaranty (Tower Indiana
Debt) made by MascoTech Stamping Technologies, Inc., a Delaware
corporation, in favor of Comerica Bank, as agent.
*4.7 Joinder Agreement to Amended and Restated Guaranty (Tower
Kentucky Debt) made by MascoTech Stamping Technologies, Inc., a
Delaware corporation, in favor of Comerica Bank, as agent.
*4.8 Form of Second Amended and Restated Security Agreement, dated as
of May 31, 1996, made by each of R.J. Tower Corporation, a
Michigan corporation, R.J. Tower Corporation, a Kentucky
corporation, R.J. Tower Corporation, an Indiana corporation,
Kalamazoo Stamping and Die Company, a Michigan corporation,
Edgewood Manufacturing Corp., a Delaware corporation, in favor of
Comerica Bank, as agent.
*4.9 Amended and Restated Security Agreement, dated as of May 31,
1996, made by Trylon Corporation, a Michigan corporation, in
favor of Comerica Bank, as agent.
*4.10 Form of Second Amended and Restated Mortgage, dated as of May 31,
1996, made by each of R.J. Tower Corporation, a Michigan
corporation, R.J. Tower Corporation, an Indiana corporation,
Kalamazoo Stamping and Die Company, a Michigan corporation,
Edgewood Manufacturing Corp., a Delaware corporation, in favor of
Comerica Bank, as agent.
*4.11 Second Amended and Restated Security Agreement (Third Party
Pledge), dated as of May 31, 1996, made by Tower Automotive,
Inc., a Delaware corporation, in favor of Comerica Bank, as
agent.
-4-
<PAGE>
4.12 Intercreditor and Collateral Agency Agreement, dated as of May
31, 1996, among Comerica Bank, Bank of America Illinois, First Bank National
Association, Teachers Insurance and Annuity Association of America, Northern
Life Insurance Company, Northwestern National Life Insurance Company, Bankers
Security Life Insurance Society, Jefferson-Pilot Life Insurance Company and
Alexander Hamilton Life Insurance Company of America.
4.13 Form of R.J. Tower Corporation Note Agreement, dated as of May
31, 1996, between R.J. Tower Corporation and each of Teachers Insurance and
Annuity Association of America, Northern Life Insurance Company, Northwestern
National Life Insurance Company, Bankers Security Life Insurance Society,
Jefferson-Pilot Life Insurance Company and Alexander Hamilton Life Insurance
Company of America.
4.14 Form of 7.65% Senior Secured Notes, Series A , due June 1, 2006,
issued by R.J. Tower Corporation to (i) Teachers Insurance and Annuity
Association of America in the principal amount of $10 million, (ii) Northern
Life Insurance Company in the principal amount of $8.5 million, (iii)
Northwestern National Life Insurance Company in the principal amount of $4.0
million, (iv) Bankers Security Life Insurance Society in the principal amount of
$2.5 million, (v) Jefferson-Pilot Life Insurance Company in the principal amount
of $7.5 million and (vi) Alexander Hamilton Life Insurance Company of America in
the principal amount of $7.5 million.
4.15 7.82% Senior Secured Note, Series B, due June 1, 2008, issued by
R.J. Tower Corporation to Teachers Insurance and Annuity Association of America
in the principal amount of $25 million.
4.16 Subsidiaries Guaranty, dated as of May 31, 1996, made by Trylon
Corporation, a Michigan corporation, R.J. Tower Corporation, a Kentucky
corporation, R.J. Tower Corporation, an Indiana corporation, Kalamazoo Stamping
and Die Company, a Michigan corporation, Edgewood Manufacturing Corp., a
Delaware corporation and MascoTech Stamping Technologies, Inc., a Delaware
corporation, in favor of Teachers Insurance and Annuity Association of America,
Northern Life Insurance Company, Northwestern National
-5-
<PAGE>
Life Insurance Company, Bankers Security Life Insurance Society,
Jefferson-Pilot Life Insurance Company and Alexander Hamilton
Life Insurance Company of America.
4.17 Registration Rights and Voting Agreement, dated as of May 31,
1996, between Tower Automotive, Inc. and MascoTech, Inc.
4.18 $5 million Promissory Note, dated as of May 31, 1996, issued by
R.J. Tower Corporation to MascoTech, Inc.
4.19 Stock Purchase Warrant, dated as of May 31, 1996, issued by Tower
Automotive, Inc. to MascoTech, Inc.
23.1 Consent of Arthur Andersen LLP.
99.1 Press release dated May 31, 1996.
_________________________________
+ The registrant has omitted the exhibits and schedules to the Stock Purchase
Agreement and agrees to furnish supplementally a copy of such exhibits and
schedules to the Commission upon request.
*To be filed by Amendment.
-6-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TOWER AUTOMOTIVE, INC.
Date: May 31, 1996 By: /s/ Anthony A. Barone
------------------------------
Anthony A. Barone
Chief Financial Officer
<PAGE>
REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
To MascoTech Stamping Technologies, Inc.:
We have audited the accompanying statements of net assets acquired of MascoTech
Stamping Technologies, Inc. as of December 31, 1994 and 1995, and the related
statements of revenues and expenses and cash flows for each of the three years
in the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
These financial statements have been prepared to reflect the operations of
MascoTech Stamping Technologies, Inc. acquired pursuant to the Stock Purchase
Agreement discussed in Note 1 and are not intended to be a complete presentation
of MascoTech Stamping Technologies, Inc.'s assets and liabilities, revenues and
expenses or cash flows.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets acquired of MascoTech Stamping
Technologies, Inc. pursuant to the Stock Purchase Agreement discussed in Note 1
as of December 31, 1994 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
May 31, 1996
F-1
<PAGE>
MASCOTECH STAMPING TECHNOLOGIES, INC.
STATEMENTS OF NET ASSETS ACQUIRED
(Amounts in thousands)
<TABLE>
<CAPTION>
December 31,
----------------------------- March 31,
1994 1995 1996
-------------- -------------- --------------
<S> <C> <C> <C>
ASSETS (unaudited)
CURRENT ASSETS:
Cash $ 92 $ 322 $ 196
Accounts receivable, net of reserves of $375, $712
and $831 18,725 22,872 26,476
Inventories 7,350 7,599 6,041
Prepaid customer tooling and other 10,078 2,111 3,685
Deferred income tax benefit 2,027 1,775 1,775
-------------- -------------- --------------
Total current assets 38,272 34,679 38,173
-------------- -------------- --------------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 548 548 548
Buildings and improvements 10,652 11,452 11,452
Machinery and equipment 35,692 49,336 50,053
Construction in progress 10,121 7,313 7,139
-------------- -------------- --------------
57,013 68,649 69,192
Less-Accumulated depreciation (16,233) (19,341) (20,545)
-------------- -------------- --------------
Net property, plant and equipment 40,780 49,308 48,647
-------------- -------------- --------------
GOODWILL AND OTHER ASSETS, net 49,443 47,795 47,383
-------------- -------------- --------------
Total assets 128,495 131,782 134,203
-------------- -------------- --------------
LIABILITIES
CURRENT LIABILITIES:
Accounts payable 32,012 26,936 22,019
Accrued compensation costs 3,215 3,242 2,847
Other accrued liabilities 937 2,483 4,600
-------------- -------------- --------------
Total current liabilities 36,164 32,661 29,466
OTHER LONG-TERM LIABILITIES 327 444 450
DEFERRED INCOME TAXES 5,513 6,555 6,555
COMMITMENTS AND CONTINGENCIES (Note 5)
-------------- -------------- --------------
Total liabilities 42,004 39,660 36,471
-------------- -------------- --------------
NET ASSETS ACQUIRED $ 86,491 $ 92,122 $ 97,732
============== ============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
F-2
<PAGE>
MASCOTECH STAMPING TECHNOLOGIES, INC.
STATEMENTS OF REVENUES AND EXPENSES
(Amounts in thousands)
<TABLE>
<CAPTION>
For The Year Ended For the Three Months
December 31, Ended March 31,
----------------------------------------------- ----------------------------
1993 1994 1995 1995 1996
------------- ------------- ------------- ------------ ------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues $102,610 $125,439 $152,895 $38,806 $42,361
Cost of sales 93,627 122,038 136,592 35,172 36,638
------------- ------------- ------------- ------------ ------------
Gross profit 8,983 3,401 16,303 3,634 5,723
Selling, general and administrative expenses 6,122 8,154 8,054 2,104 1,998
Amortization expense 1,638 1,638 1,638 410 410
------------- ------------- ------------- ------------ ------------
Revenues over (under) expenses before
provision (benefit) for income taxes 1,223 (6,391) 6,611 1,120 3,315
Provision (benefit) for income taxes 1,158 (1,776) 3,330 610 1,490
------------- ------------- ------------- ------------ ------------
Revenues over (under) expenses $ 65 $ (4,615) $ 3,281 $ 510 $ 1,825
============= ============= ============= ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
MASCOTECH STAMPING TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS
(Amounts in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
For the Years Ended December 31, March 31,
-------------------------------- --------------------------
1993 1994 1995 1995 1996
-------- -------- --------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 65 $ (4,615) $ 3,281 $ 510 $ 1,825
Adjustments to reconcile net income (loss) to
net cash provided by (used for) operating
activities:
Depreciation and amortization 3,354 3,677 5,036 1,066 1,344
Deferred income tax provision (benefit) 563 (102) 1,294 - -
Changes in other operating items -
Accounts receivable (8,106) (794) (4,147) (7,447) (3,604)
Inventories 2,162 (2,352) (249) 1,040 1,558
Prepaid customer tooling and other 3,373 (11,452) 7,862 (3,087) (1,574)
Accounts payable, accrued liabilities
and other 4,203 21,633 (3,385) (4,872) (3,191)
------- -------- -------- -------- -------
Net cash provided by (used for)
operating activities 5,614 5,995 9,692 (12,790) (3,642)
------- -------- -------- -------- -------
INVESTING ACTIVITIES:
Capital expenditures, net (8,761) (15,417) (11,915) (2,342) (271)
------- -------- -------- -------- -------
FINANCING ACTIVITIES:
Net advances from MascoTech, Inc. 3,286 8,321 2,453 15,040 3,787
------- -------- -------- -------- -------
NET CHANGE IN CASH 139 (1,101) 230 (92) (126)
CASH:
Beginning of period 1,054 1,193 92 92 322
------- -------- -------- -------- -------
End of period $ 1,193 $ 92 $ 322 $ - $ 196
======= ======== ======== ======== =======
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
MASCOTECH STAMPING TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE THREE MONTH PERIODS
ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)
1. ORGANIZATION AND BASIS OF PRESENTATION:
During the periods presented, MascoTech Stamping Technologies, Inc. (MSTI -
a Delaware corporation) was a wholly owned subsidiary of MascoTech, Inc.
(MascoTech or the Parent). On May 31, 1996, all of the outstanding common
stock of the Company was acquired by R.J. Tower Corporation (R.J. Tower), a
wholly owned subsidiary of Tower Automotive, Inc. (See Note 7) pursuant to
the terms of a Stock Purchase Agreement (the Acquisition.) Prior to the
Acquisition and during the years presented, MSTI divested of certain
operations. The accompanying financial statements reflect the assets
acquired and liabilities assumed, revenues and expenses and cash flows of
the operations conducted by MSTI acquired by R.J. Tower as of the date of
the Acquisition. This presentation is intended to provide a more meaningful
representation of the historical financial information of the acquired
operations and is not intended to represent a presentation of the financial
position and results of operations of MSTI. The operations included in the
accompanying financial statements are referred to herein as the Company.
The accompanying financial statements have not been adjusted to reflect the
effects of the Acquisition.
The accompanying statement of net assets acquired as of March 31, 1996, and
the statements of revenues and expenses and cash flows for the three month
periods ended March 31, 1995 and 1996, are unaudited. In the opinion of
management, such financial statements include all adjustments, consisting
solely of normal recurring adjustments, necessary for a fair presentation
of results for these interim periods. The revenues and expenses for the
three-month period ended March 31, 1996 are not necessarily indicative of
results to be expected for the entire year.
The Company is a manufacturer and supplier of stamped chassis and
suspension components and assemblies for the North American automotive
industry and has three manufacturing facilities.
2. SIGNIFICANT ACCOUNTING POLICIES:
Arrangements with Affiliates:
During the periods presented, the Company provided certain services to
other entities which were affiliated through common ownership or which had
previously been wholly owned subsidiaries of MSTI that were sold prior to
the Acquisition. One of these affiliates was Trylon Corporation which was
acquired by R.J. Tower in January 1996. These services consisted of the
performance of accounting and treasury functions, maintenance of management
information systems, product engineering and assistance with other
administrative matters. In addition, a division of the Company designed,
developed and manufactured customer tooling on behalf of these affiliates
for use in their manufacturing operations. Certain other services were
provided to the Company and these affiliates by MascoTech and its
affiliate, Masco Corporation (Masco - see Note 6 for further discussion
of these arrangements).
Through the course of providing services to these affiliates, information
related to amounts receivable from customers, obligations to vendors and
costs incurred in the development and manufacture of customer tooling were
maintained by MSTI on a commingled basis during certain periods. In the
preparation of the accompanying financial statements, it was determined
that it was not practicable to specifically identify
F-5
<PAGE>
such amounts which related solely to the Company. Accordingly, the amounts
presented in the accompanying financial statements related to these matters
reflect estimates, which management believes were reasonable and
appropriate in the circumstances, of the portion of such balances which
were associated with the acquired operations. Management does not believe
that such estimates would differ materially from actual amounts had it been
practicable to specifically identify such actual amounts.
Inventories:
Inventories are valued at the lower of first-in, first-out cost or market.
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
December 31,
------------------- March 31,
1994 1995 1996
------- ------- ---------
<S> <C> <C> <C>
Raw materials $ 3,473 $ 1,676 $ 1,008
Work in process 1,468 3,481 3,031
Finished goods 2,409 2,442 2,002
------- ------- -------
$ 7,350 $ 7,599 $ 6,041
======= ======= =======
</TABLE>
Prepaid Customer Tooling:
Prepaid customer tooling represents costs incurred by the Company in the
development of new tooling used in the manufacture of the Company's
products. Once customer approval is obtained for the manufacture of a new
product, the Company is entitled to be reimbursed by the customer for the
cost of the tooling, at which time the tooling becomes the property of the
customer.
Property, Plant and Equipment:
Property, plant and equipment are stated at cost. For financial reporting
purposes, depreciation and amortization are provided using the straight-
line method over the following estimated useful lives:
Buildings and improvements 20 to 40 years
Machinery and equipment 3 to 15 years
Accelerated depreciation methods are used for tax reporting purposes.
Maintenance and repairs are charged to expense as incurred. Major
improvements which extend the useful life of the related item are
capitalized and depreciated. The cost and accumulated depreciation of
property, plant and equipment retired or otherwise disposed of are removed
from the related accounts, and any residual values are charged or credited
to income.
Goodwill and Other Assets:
Goodwill represents the excess of consideration paid over the fair value of
the net assets acquired in the Company's previous acquisitions and is being
amortized on a straight-line basis over 40 years. Goodwill is presented
net of accumulated amortization of $16,244,000, $17,882,000 and $18,292,000
at December 31, 1994 and 1995 and March 31, 1996. At each balance sheet
date, management assesses whether there has been a permanent impairment
of goodwill by comparing anticipated undiscounted future cash flows from
operating activities with the carrying amount of goodwill. Based on this
assessment, there was no impairment of goodwill at December 31, 1995.
Other assets were not significant during any period presented.
Income Taxes:
The Company accounts for income taxes under the liability method, whereby
F-6
<PAGE>
deferred income taxes are recognized at currently enacted income tax rates
to reflect the tax effect of temporary differences between the financial
reporting and tax bases of assets and liabilities.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Such estimates relate primarily to the
carrying amounts of accounts receivable, inventories and customer tooling
balances and to the determination of account balances which were maintained
by the Company on a commingled basis with certain affiliates, as discussed
above. The ultimate results could differ from those estimates.
3. MAJOR CUSTOMERS:
The Company sells its products directly to automobile manufacturers and
their direct suppliers. Following is a summary of customers that accounted
for more than 10% of revenues:
<TABLE>
<CAPTION>
Three Months Ended
Year Ended December 31, March 31,
---------------------- ------------------
1993 1994 1995 1995 1996
---- ---- ---- ------ -------
<S> <C> <C> <C> <C> <C>
Ford 63% 62% 68% 62% 73%
Chrysler 6% 7% 9% 13% 10%
</TABLE>
Receivables from these customers represented 74% and 78% of total accounts
receivable at December 31, 1994 and 1995, and 67% at March 31, 1996.
4. INCOME TAXES:
MSTI's results of operations are included in the consolidated federal
income tax returns of MascoTech while separate income tax returns are filed
for state income tax purposes. As a result, all tax payments are made by
MascoTech. The provisions for income taxes in the accompanying statements
of revenues and expenses for the years ended December 31, 1993, 1994, and
1995, and for the three-month periods ended March 31, 1995 and 1996 were
computed on a separate-company basis as if the Company had filed separate
federal tax returns.
The income tax provision (benefit) consisted of the following (in
thousands):
<TABLE>
<CAPTION>
For the Three Months
Year Ended December 31, Ended March 31,
------------------------------ --------------------
1993 1994 1995 1995 1996
------ ------- ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Currently payable (receivable) $ 595 $(1,674) $2,036 $610 $1,490
Deferred income tax
provision (benefit) 563 (102) 1,294 - -
------ ------- ------ ---- ------
$1,158 $(1,776) $3,330 $610 $1,490
====== ======= ====== ==== ======
</TABLE>
The deferred income tax provision (benefit) consisted of the following (in
thousands):
<TABLE>
<CAPTION>
For the Year Ended December 31,
----------------------------------
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Depreciation lives and
methods $(185) $ 205 $ 970
Reserves and accruals not
currently deductible 695 (366) 233
Other, net 53 59 91
----- ----- ------
Net deferred income
tax provision (benefit) $ 563 $(102) $1,294
===== ===== ======
</TABLE>
There was no deferred income tax provision (benefit) for the three month
periods ended
F-7
<PAGE>
March 31, 1995 and 1996.
A reconciliation of the income tax provision (benefit) computed at
statutory rates to the reported income tax provision (benefit) is as
follows (in thousands):
<TABLE>
<CAPTION>
For the Three Months
For the Year Ended December 31, Ended March 31,
------------------------------- --------------------
1993 1994 1995 1995 1996
-------- -------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Taxes at federal
statutory rates $ 428 $(2,237) $2,314 $392 $1,160
State income taxes, net of
federal benefit 61 (128) 330 56 166
Effect of permanent
differences, primarily
goodwill amortization 669 589 686 162 164
------ ------- ------ ---- ------
Provision (benefit) for
income taxes $1,158 $(1,776) $3,330 $610 $1,490
====== ======= ====== ==== ======
</TABLE>
A summary of the net deferred income tax benefit (liability) is as follows
(in thousands):
<TABLE>
<CAPTION>
December 31,
------------------ March 31,
1994 1995 1996
------- ------- ---------
<S> <C> <C> <C>
Reserves and accruals not currently
deductible $ 2,041 $ 1,809 $ 1,809
Other (14) (34) (34)
------- ------- -------
Net current deferred income tax benefit $ 2,027 $ 1,775 $ 1,775
======= ======= =======
Depreciation lives and methods $(5,842) $(6,811) $(6,811)
Other 329 256 256
------- ------- -------
Net long-term deferred income tax liability $(5,513) $(6,555) $(6,555)
======= ======= =======
</TABLE>
5. COMMITMENTS AND CONTINGENCIES:
Employee Benefit Plans:
During the periods presented, employees of the Company were eligible to
participate in a variety of employee benefit plans sponsored by the Parent.
Participation in these plans was subject to certain eligibility conditions.
The Parent sponsors retirement savings plans which provide qualified
employees the opportunity to defer a portion of their salary on a before-
tax basis. The Company may match a portion of these contributions, at its
discretion. No matching contributions were made during any period
presented in the accompanying financial statements.
The Company may also make discretionary contributions on behalf of certain
of its salaried employees to profit-sharing plans sponsored by the Parent.
Such contributions which have been charged to expense in the accompanying
statements of revenues and expenses were $288,000 during the year ended
December 31, 1995 and $94,000 and $117,000 during the three-month periods
ended March 31, 1995 and 1996. Such amounts were not significant during
the other periods presented.
Certain of the Company's employees also participate in plans sponsored by
the Parent which provide for future benefit payments which are determined
on a formula basis dependent upon such factors as years of service and
specified benefit levels. The Parent, as sponsor of these plans, has
ultimate responsibility for payment of these benefits and charges the
Company a predetermined amount related to those employees of the Company
that participate in these plans. Amounts charged to the Company relative
to these plans which have been reflected as expense in the accompanying
statements of revenues and expenses were $525,000, $689,000 and $675,000
during the years ended December 31, 1993, 1994 and 1995, and $170,000 and
$185,000 during the three month periods ended March 31, 1995 and 1996.
In connection with the Acquisition, all benefits earned by the Company's
employees through the acquisition date under the plans described above
remained the responsibility
F-8
<PAGE>
of MascoTech and those employees are eligible to participate in the
employee benefit plans, if any, maintained by the Company following the
acquisition.
In addition to the above plans, certain hourly and salaried
employees at one of the Company's manufacturing facilities are entitled to
receive medical and life insurance benefits upon their retirement, if they
meet specified eligibility requirements, under the terms of a plan
sponsored by MascoTech. During all periods presented in the accompanying
financial statements, MascoTech was responsible for providing these
benefits. Accordingly, no liability has been recognized in the financial
statements of the Company associated with these obligations. In connection
with the Acquisition, R.J. Tower agreed to assume this obligation and will
record it as part of the purchase. As of December 31, 1995, the estimated
accumulated benefit obligation associated with these employees was not
significant.
Environmental and Legal Matters:
Due to the nature of its business, the Company may, from time to
time, be exposed to potential liabilities to clean up environmental
contaminants. In addition, the Company is periodically involved in legal
proceedings during the ordinary course of business. In the opinion of
management, such matters are not expected to have a material impact on the
Company's future operating results or financial position.
6. RELATED PARTY TRANSACTIONS:
Prior to the acquisition of the Company by R.J. Tower, Masco and the Parent
provided certain administrative services to the Company, and the Company
engaged in certain transactions with Masco, MascoTech and its subsidiaries.
Such services and transactions included the following:
. Cash management functions related to the collection of amounts
receivable from customers and the funding of payments made to vendors.
. The purchase and sale of certain manufactured products between the
Company and other MascoTech operations.
. Participation in insurance programs and selected employee benefit plans
which were sponsored by the Parent.
Charges for the Company's respective share of the amounts related to its
participation in common programs with the Parent and its subsidiaries are
reflected as a component of operating expenses in the accompanying
statements of revenues and expenses. Under the terms of these
arrangements, the Company pays fees to MascoTech, and MascoTech, in turn,
pays fees to Masco for services such as those discussed above. Such fees,
which are determined principally as a percentage of sales, totaled
$1,791,000, $2,922,000 and $3,572,000 during the years ended December 31,
1993, 1994 and 1995, and $867,000 and $617,000 during the three month
periods ended March 31, 1995 and 1996.
7. ACQUISITION BY R.J. TOWER:
Effective May 30, 1996, all of the outstanding common stock of the Company
was acquired by R.J. Tower (see discussion in Note 1). Terms of the Stock
Purchase Agreement provided for the purchase of the common stock for
consideration of approximately $55 million in cash, 785,000 shares of Tower
Automotive, Inc. common
F-9
<PAGE>
stock, a one-year promissory note in the amount of $5 million bearing
interest at 7% and warrants to acquire 200,000 common shares of Tower
Automotive, Inc. at $18 per share. Payment of the one-year promissory note
is contingent upon the Company achieving certain operating results during
the first year following the acquisition. In addition, MascoTech may
receive additional cash consideration of up to $25 million if the Company
achieves certain operating results during the three years following the
completion of the acquisition. Subsequent to this acquisition, the
operations of the Company will be continued by R.J. Tower. The acquisition
of the Company will be accounted for by R.J. Tower as a purchase and,
accordingly, the Company's assets and liabilities will be recorded at their
fair values as of the acquisition date.
F-10
<PAGE>
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The following Unaudited Pro Forma Statement of Operations for the year ended
December 31, 1995 gives effect to Tower's acquisition of Trylon Corporation
(including related financing transactions), which was completed on January 16,
1996 and the acquisition of MSTI (including related financing transactions) as
if such transactions had occurred on January 1, 1995. The following Unaudited
Pro Forma Statement of Operations for the three months ended March 31, 1996
gives effect to the acquisition of MSTI (including related financing
transactions) as if such transaction had occurred on January 1, 1996. Tower
acquired Trylon on January 16, 1996. Results of operations of Trylon for the
period from January 1, 1996 through the acquisition date are not material and
therefore have not been included in the Registrant's results of operations for
the three-month period ended March 31, 1996.
The information included in the Unaudited Pro Forma Balance Sheet as of
March 31, 1996 reflects the acquisition of MSTI (including related financing
transactions) as if such transaction occurred on such date. The historical
financial statements of the Registrant as of March 31, 1996 already reflect
the acquisition of Trylon.
In connection with the acquisition of MSTI, Tower has committed to make
additional earn-out payments if certain operating targets are achieved by the
MSTI facilities in the first three years following the acquisition. The
Unaudited Pro Forma Financial Statements do not include any amounts related to
such payments as a result of their contingent nature.
The unaudited pro forma financial data presented herein are based on the
assumptions and adjustments described in the accompanying notes. The Unaudited
Pro Forma Statements of Operations do not purport to represent what the
Registrant's results of operations actually would have been if the events
described above had occurred as of the dates indicated or what such results
will be for any future periods. The Unaudited Pro Forma Financial Statements
are based upon assumptions and adjustments that the Registrant believes are
reasonable. The Unaudited Pro Forma Financial Statements and the accompanying
notes should be read in conjunction with the historical financial statements
of the Registrant, Trylon and MSTI, including the notes thereto.
F-11
<PAGE>
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THE PRO FORMA
REGISTRANT (1) TRYLON (2) MSTI ADJUSTMENTS PRO FORMA
-------------- --------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues............... $222,801 $47,911 $152,895 $423,607
Cost of sales.......... 185,388 41,315 136,592 100 (3) 363,770
375 (4)
-------- ------- -------- ------- --------
Gross profit........... 37,413 6,596 16,303 (475) 59,837
Selling, general and
administrative
expenses.............. 14,308 700 8,054 23,062
Amortization expense... 1,185 372 1,638 (32)(5) 2,497
(666)(6)
-------- ------- -------- ------- --------
Operating income....... 21,920 5,524 6,611 223 34,278
Interest expense, net.. 1,799 -- -- 2,000 (7) 8,207
4,408 (8)
-------- ------- -------- ------- --------
Income before
provision for income
taxes................. 20,121 5,524 6,611 (6,185) 26,071
Provision for income
taxes................. 8,050 2,296 3,330 (3,247)(9) 10,429
-------- ------- -------- ------- --------
Net income........... $ 12,071 $ 3,228 $ 3,281 $(2,938) $ 15,642
======== ======= ======== ======= ========
Net income applicable
to common
stockholders........ $ 12,247 $ 3,228 $ 3,281 $(2,938) $ 15,818
======== ======= ======== ======= ========
Net income per common
and common
equivalent share.... $ 1.05 $ 1.27
Weighted average
common and common
equivalent shares
outstanding......... 11,697 785 (10) 12,482
</TABLE>
See accompanying notes to unaudited pro forma statements of operations.
F-12
<PAGE>
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THE PRO FORMA
REGISTRANT MSTI ADJUSTMENTS PRO FORMA
---------- ------- ----------- ---------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues........................... $68,921 $42,361 $111,282
Cost of sales...................... 58,406 36,638 (400)(11) 94,744
100 (4)
------- ------- ----- --------
Gross profit....................... 10,515 5,723 300 16,538
Selling, general and
administrative expenses........... 3,514 1,998 5,512
Amortization expense............... 375 410 (161)(6) 624
------- ------- ----- --------
Operating income................... 6,626 3,315 461 10,402
Interest expense, net.............. 1,308 -- 1,119 (8) 2,427
------- ------- ----- --------
Income before provision for income
taxes............................. 5,318 3,315 (658) 7,975
Provision for income taxes......... 2,130 1,490 (430)(9) 3,190
------- ------- ----- --------
Net income....................... $ 3,188 $ 1,825 $(228) $ 4,785
======= ======= ===== ========
Net income applicable to common
stockholders.................... $ 3,232 $ 1,825 $(228) $ 4,829
======= ======= ===== ========
Net income per common and common
equivalent share................ $ 0.28 $ 0.39
Weighted average common and
common equivalent shares
outstanding..................... 11,733 785 (10) 12,518
</TABLE>
See accompanying notes to unaudited pro forma statements of operations.
F-13
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
(1) Represents the results of operations of the Registrant for the year ended
December 31, 1995. Beginning in 1996, the Registrant began classifying
certain engineering expenses that were previously classified as selling,
general and administrative expenses as cost of sales. These engineering
expenses incurred in 1995 have been reclassified to cost of sales to be
consistent with the 1996 presentation. This reclassification had no effect
on previously reported operating income or net income.
(2) Represents the results of operations of Trylon for the year ended December
31, 1995. The Registrant acquired Trylon on January 16, 1996. Results of
operations of Trylon for the period from January 1, 1996 through the
acquisition date are not material and therefore have not been included in
the Unaudited Pro Forma Consolidated Statement of Operations for the three
months ended March 31, 1996.
(3) Represents the change in depreciation expense resulting from adjustments
to the depreciable lives of property, plant and equipment of Trylon to
their estimated useful lives at the time of their acquisition and from
adjustments to value such property, plant and equipment at fair value as
of the date of acquisition.
(4) Represents the net periodic postretirement benefit cost associated with
the postretirement benefit obligation assumed in connection with the
acquisition of MSTI.
(5) Represents amortization of goodwill arising from the acquisition of
Trylon, net of amortization of goodwill previously recorded by Trylon
which has been eliminated. Goodwill will be amortized on a straight-line
basis over a forty year period.
(6) Represents amortization of goodwill arising from the acquisition of MSTI,
net of amortization of goodwill previously recorded by MSTI which has been
eliminated. Goodwill will be amortized on a straight-line basis over a
forty year period.
(7) Represents incremental interest expense arising from indebtedness incurred
in connection with the acquisition of Trylon. Interest expense was
calculated using the weighted average interest rate on the borrowings
incurred to fund the acquisition.
(8) Represents incremental interest expense arising from indebtedness incurred
in connection with the acquisition of MSTI. Interest expense was
calculated using the weighted average interest rate on the borrowings
incurred to fund the acquisition.
(9) To adjust the provision for income taxes on a pro forma basis to reflect
the Company's incremental tax rate of 40%.
(10) Represents the shares of Common Stock issued to MascoTech in connection
with the acquisition of MSTI.
(11) Represents the change in depreciation expense resulting from adjustments
to the depreciable lives of property, plant and equipment of MSTI to
their estimated useful lives at the time of their acquisition and from
adjustments to value such property, plant and equipment at fair value as
of the date of acquisition.
F-14
<PAGE>
UNAUDITED PRO FORMA BALANCE SHEET
AS OF MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
-------------------
THE PRO FORMA
ASSETS REGISTRANT MSTI ADJUSTMENTS PRO FORMA
------ ---------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents........ $ 1,057 $ 196 $ (196)(1) $ 1,057
Accounts receivable.............. 53,075 26,476 79,551
Inventories...................... 14,777 6,041 20,818
Other current assets............. 6,826 5,460 12,286
-------- -------- -------- --------
Total current assets........... 75,735 38,173 (196) 113,712
Property, plant and equipment, net. 103,234 48,647 (1,000)(2) 150,881
Restricted cash.................... 14,593 -- 14,593
Goodwill and other intangible
assets, net....................... 58,148 47,383 (6,902)(3) 98,629
-------- -------- -------- --------
$251,710 $134,203 $ (8,098) $377,815
======== ======== ======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS'
INVESTMENT
-----------------------------
<S> <C> <C> <C> <C>
Current liabilities:
Current maturities of long-term
debt............................ $ 5,730 -- $ (5,000)(4) $ 730
Accounts payable................. 28,029 22,019 50,048
Accrued liabilities.............. 15,475 7,447 22,922
-------- -------- -------- --------
Total current liabilities...... 49,234 29,466 (5,000) 73,700
Long-term debt, net of current
maturities........................ 85,470 -- 63,000 (4) 148,470
Other noncurrent liabilities....... 28,019 7,005 10,500 (5) 45,524
-------- -------- -------- --------
Stockholders' investment:
Preferred stock.................. -- -- --
Common Stock..................... 108 -- 8 (6) 116
MSTI Warrants.................... -- -- 2,000 (6) 2,000
Additional paid-in capital....... 63,547 -- 19,126 (6) 82,673
Retained earnings................ 25,701 -- 25,701
Net assets acquired.............. -- 97,732 (97,732)(7) --
Subscriptions receivable......... (369) -- (369)
-------- -------- -------- --------
Total stockholders' investment. 88,987 97,732 (76,598) 110,121
-------- -------- -------- --------
$251,710 $134,203 $ (8,098) $377,815
======== ======== ======== ========
</TABLE>
See accompanying notes to unaudited pro forma balance sheet.
F-15
<PAGE>
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
(IN THOUSANDS)
(1) To eliminate MSTI cash balances which were not included in the acquisition
of MSTI.
(2) To state property, plant and equipment acquired in the acquisition of MSTI
at estimated fair value and eliminate historical accumulated depreciation.
(3) To adjust goodwill to the amount recognized in connection with the
acquisition of MSTI. The goodwill will be amortized on a straight-line
basis over forty years.
(4) To reflect the financing transactions related to the acquisition of MSTI
as follows:
<TABLE>
<S> <C>
Sources:
Proceeds from Senior Notes..................................... $65,000
Borrowings under the revolving credit facility................. 18,000
-------
$83,000
=======
Uses:
Cash paid to MascoTech in connection with the acquisition of
MSTI.......................................................... $55,000
Repayment of term loan......................................... 25,000
Transaction costs.............................................. 3,000
-------
$83,000
=======
</TABLE>
(5) To record Company management's preliminary estimate of reserves to be
established in connection with the acquisition of MSTI including $1,300 of
losses to be incurred on sale of products which have costs in excess of
selling prices, $5,800 of costs to be incurred to rationalize certain
facilities of MSTI, $300 of employee severance and related costs and
$3,100 for the estimated accumulated benefit obligation associated with
assumed post retirement medical and life insurance benefits of certain
MascoTech employees. These reserves have been established based on
preliminary estimates. Management does not believe the actual amounts to
be incurred will be materially different than the estimated amounts.
(6) To reflect the $19,134 value of the Common Stock and $2,000 value of the
warrants issued to MascoTech in connection with the acquisition of MSTI.
The warrants were valued using the Black-Scholes option pricing model.
(7) To eliminate the historical stockholder's investment of MSTI.
F-16
<PAGE>
EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
MASCOTECH, INC. (SELLER),
TOWER AUTOMOTIVE, INC. (PARENT)
AND
R.J. TOWER CORPORATION (BUYER)
DATED AS OF MAY 31, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
PURCHASE AND SALE OF STOCK..................................................................... 1
1.1 Purchase and Sale...................................................................... 1
1.2 Purchase Price......................................................................... 1
1.3 Adjustments to Cash Purchase Price..................................................... 2
1.4 Determination of Earnout Amount........................................................ 3
1.5 Closing Transactions................................................................... 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY......................................................................... 6
2.1 Organization and Corporate Power....................................................... 6
2.2 Authorization of Transactions.......................................................... 6
2.3 Capitalization......................................................................... 6
2.4 Subsidiaries; Investments.............................................................. 6
2.5 Absence of Conflicts................................................................... 7
2.6 Financial Statements................................................................... 7
2.7 Absence of Undisclosed Liabilities..................................................... 7
2.8 Absence of Certain Developments........................................................ 7
2.9 Real and Personal Property............................................................. 8
2.10 Accounts Receivable.................................................................... 11
2.11 Inventory.............................................................................. 11
2.12 Taxes.................................................................................. 11
2.13 Contracts and Commitments.............................................................. 13
2.14 Proprietary Rights..................................................................... 14
2.15 Litigation; Proceedings................................................................ 15
2.16 Brokerage.............................................................................. 15
2.17 Governmental Licenses and Permits...................................................... 15
2.18 Employee Benefit Plans................................................................. 16
2.19 Insurance.............................................................................. 17
2.20 Officers and Directors; Bank Accounts.................................................. 18
2.21 Affiliate Transactions................................................................. 18
2.22 Compliance with Laws................................................................... 18
2.23 Environmental and Safety Matters....................................................... 18
2.24 Product Warranty and Product Liability................................................. 20
2.25 Employees.............................................................................. 20
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
2.26 Powers of Attorney; Guarantees......................................................... 21
2.27 Products............................................................................... 21
2.28 Ford LTA............................................................................... 21
ARTICLE III
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO SELLER......................................... 21
3.1 Authorization of Transactions.......................................................... 21
3.2 Absence of Conflicts................................................................... 21
3.3 Shares................................................................................. 22
3.4 Litigation............................................................................. 22
3.5 Investment Representation.............................................................. 22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT............................................. 23
4.1 Corporate Organization and Power....................................................... 23
4.2 Authorization.......................................................................... 23
4.3 Absence of Conflicts................................................................... 23
4.4 Investment Intent...................................................................... 23
4.5 Litigation............................................................................. 24
4.6 Reports................................................................................ 24
4.7 Brokers' Fees.......................................................................... 24
ARTICLE V
INDEMNIFICATION AND RELATED MATTERS............................................................ 24
5.1 Survival............................................................................... 24
5.2 Indemnification........................................................................ 24
5.3 Arbitration Procedures................................................................. 30
ARTICLE VI
ADDITIONAL AGREEMENTS.......................................................................... 31
6.1 Tax Matters............................................................................ 31
6.2 Employee Benefit Matters............................................................... 33
6.3 Intercompany Accounts.................................................................. 34
6.4 Press Releases and Announcements....................................................... 34
6.5 Further Transfers...................................................................... 35
6.6 Specific Performance................................................................... 35
6.7 Transition Assistance.................................................................. 35
6.8 Investigation; Confidentiality......................................................... 36
6.9 Expenses............................................................................... 36
6.10 Books and Records...................................................................... 36
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C> <C>
6.11 Non-Competition, Non-Solicitation and Confidentiality.................................. 37
6.12 Operating Leases....................................................................... 38
6.13 Securities Laws Legend................................................................. 38
6.14 Rohde Settlement....................................................................... 39
6.15 License and Patents.................................................................... 39
6.16 Account Collection..................................................................... 39
6.17 Litigation Matter...................................................................... 39
6.18 Plant Improvements..................................................................... 40
6.19 The MascoTech Name..................................................................... 40
6.20 Kendallville Facility Environmental Conditions......................................... 40
ARTICLE VII
MISCELLANEOUS.................................................................................. 42
7.1 Amendment and Waiver................................................................... 42
7.2 Notices................................................................................ 42
7.3 Binding Agreement; Assignment.......................................................... 43
7.4 Severability........................................................................... 43
7.5 No Strict Construction................................................................. 43
7.6 Captions............................................................................... 44
7.7 Entire Agreement....................................................................... 44
7.8 Counterparts........................................................................... 44
7.9 Governing Law.......................................................................... 44
7.10 Parties in Interest.................................................................... 44
7.11 Knowledge.............................................................................. 44
LIST OF EXHIBITS.................................................................................... 46
LIST OF SCHEDULES................................................................................... 47
</TABLE>
-iii-
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of May 31, 1996
by and among MascoTech, Inc., a Delaware corporation ("Seller"), Tower
Automotive, Inc., a Delaware corporation ("Parent") and R.J. Tower Corporation,
a Michigan corporation and a wholly owned subsidiary of Parent ("Buyer").
The authorized capital stock of MascoTech Stamping Technologies, Inc., a
Delaware corporation (the "Company"), consists of 1,000 shares of common stock,
par value $1.00 per share, of which 1,000 shares are issued and outstanding
(collectively, the "Company Stock"). Seller owns beneficially and of record
100% of the outstanding Company Stock.
Buyer desires to acquire from Seller, and Seller desires to sell to Buyer,
all of the shares of Company Stock owned by Seller.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
--------------------------
1.1 PURCHASE AND SALE. On and subject to the terms and conditions set
forth in this Agreement, on the Closing Date (as defined), Buyer will purchase
from Seller, and Seller will sell and transfer to Buyer, all of the shares of
Company Stock owned by the Seller, free and clear of all liens, charges,
security interests and other encumbrances.
1.2 PURCHASE PRICE. The aggregate purchase price to be paid to Seller
for the Company Stock (the "Purchase Price") will consist of the Cash Purchase
Price, the Shares, the Note, the Warrant (as each of such terms is defined
below), and the Earnout Amount (as defined in Section 1.4).
(a) Cash Purchase Price. Buyer shall pay to Seller $55 million in
immediately available funds, as adjusted pursuant to Section 1.3 (a) below (the
"Cash Purchase Price").
(b) Shares. Parent shall transfer to Seller 785,000 shares of Parent's
Common Stock, par value $.01 per share ("Parent's Common") (the "Shares").
(c) Note. Buyer shall issue to Seller a promissory note bearing interest
at 7% per annum (the "Note") in the form of Exhibit A attached hereto, in the
principal amount of $5 million, as may be adjusted pursuant to the terms thereof
(such principal (as adjusted) plus interest, the "Note Amount").
(d) Warrant. Parent shall issue to Seller a four year warrant (the
"Warrant") in the form of Exhibit B attached hereto, for 200,000 shares of
Parent's Common (the "Warrant Shares") at an exercise price of $18 per share.
<PAGE>
1.3 ADJUSTMENTS TO CASH PURCHASE PRICE.
(a) As promptly as practicable after the Closing Date, Buyer and Seller
shall in good faith jointly prepare a statement of working capital of the
Company as of the close of business on the Closing Date (the "Closing Statement
of Working Capital") for the purpose of establishing the Actual Closing Working
Capital. For purposes hereof, "Actual Closing Working Capital" means the book
value of the Company's total current assets relating to the Company's operations
at Rochester Hills, Michigan (including the GEI tooling operations),
Kendallville, Indiana, Bluffton, Ohio and Upper Sandusky, Ohio (the "Company
Operations") (excluding cash to the extent retained by Seller through the
Closing Date, prepaid launch costs, and those accounts receivable and tooling
in process items as set forth or described on Schedule 1.3(a) attached hereto
(the "Carved-Out Assets Schedule")) less the Company's total current liabilities
relating to the Company Operations (excluding any current liability which is
retained or discharged by Seller after the Closing including, without
limitation, federal and state income taxes, workers' compensation obligations
and intercompany accounts and excluding those reserves established in respect of
those assets which are set forth or described on the Carved-Out Asset Schedule)
(which amount may be a negative number), determined from the Closing Statement
of Working Capital as of 11:59 p.m. on the Closing Date. The Closing Statement
of Working Capital shall (i) be prepared in accordance with generally accepted
accounting principles, consistently applied ("GAAP") regardless of whether GAAP
was applied in prior periods (other than (A) with respect to vacation accruals
for salaried employees for which no accruals shall be made, and (B) with respect
to the current portion of deferred taxes for which no accruals shall be made),
(ii) reflect all items and adjustments regardless of materiality, and (iii)
reflect reserves determined in accordance with GAAP (other than those reserves
described in the parenthetical set forth in clause (i) above).
(b) If Buyer and Seller are unable to come to a mutual agreement with
respect to any item on the Closing Statement of Working Capital within 60
business days after the Closing Date, Buyer and Seller shall jointly retain the
independent accounting firm of Price Waterhouse, LLP (the "Auditor") to resolve
any such disagreements in accordance with subsection (c) below; provided,
however, that Seller or Buyer, as the case may be, shall within 3 business days
following the retention of the Auditor pay to Buyer or Seller, as the case may
be, any amount determined pursuant to subsection (d) below which is not subject
to dispute.
(c) Buyer and Seller shall direct the Auditor to render a determination
within 25 days of its retention and Buyer and Seller shall use their best
efforts to cause the Auditor to resolve all disagreements over individual line
items as soon as possible. The Auditor shall consider only those items and
amounts in the Closing Statement of Working Capital which Buyer and Seller are
unable to resolve. The determination of the Auditor shall be conclusive and
binding upon Buyer and Seller. The fees and expenses of the Auditor shall be
borne one-half by Buyer and one-half by Seller.
(d) If Actual Closing Working Capital exceeds $12.6 million, Buyer shall
within 3 business days pay to Seller the amount of such excess in immediately
available funds. If Actual Closing Working Capital is less than $12.6 million,
Seller shall within 3 business days pay to Buyer
-2-
<PAGE>
in immediately available funds the amount of such shortfall. All amounts owed
pursuant to this subsection (d) shall include interest, from the Closing Date to
the date of payment, at the Prime Rate (as defined) calculated on the basis of a
365-day year.
1.4 DETERMINATION OF EARNOUT AMOUNT.
(a) In accordance with this Section 1.4, Buyer shall pay the Earnout Amount
(as defined below) achieved in each of the 12-month periods ending on May 31,
1997, 1998 and 1999 (each such 12-month period, an "Anniversary Period") to
Seller. The "Earnout Amount" for each Anniversary Period means an amount equal
to (i) two (2) multiplied by (ii) the excess (but not the shortfall), if any, of
(A) Plant Profits (as defined below) for such Anniversary Period, over (B) $24
million; provided that in the event Plant Profits for such Anniversary Period
exceeds $33 million then the Earnout Amount for such Anniversary Period shall be
equal to $30 million (subject to reduction pursuant to Section 1.4(b) below).
(b) Notwithstanding anything to the contrary set forth in this Agreement,
in no event shall Buyer be obligated pursuant to this Section 1.4 to pay to
Seller an aggregate amount in excess of (i) $30 million minus (ii) the sum of
(A) any amount previously paid pursuant to this Section 1.4 plus (B) the
principal amount paid under the Note.
(c) Within sixty (60) days after the end of each Anniversary Period, Buyer
will prepare and deliver to Seller an accounting of the Plant Profits and the
Earnout Amount for such Anniversary Period (the "Earnout Statement") together
with the Earnout Amount (if any) for such Anniversary Period in immediately
available funds. Upon delivery of the Earnout Statement, Buyer will permit
Seller and its representatives access to the Company's and, if applicable, the
Buyer's financial books and records during normal business hours for the purpose
of reviewing such accounting. If Seller disagrees with any item on the Earnout
Statement, Seller shall notify Buyer in writing of such disagreement within
thirty (30) days after Seller's receipt thereof (such notice setting forth the
basis for such disagreement in reasonable detail) and Buyer and Seller shall
thereafter negotiate in good faith to resolve any such disagreements. If Buyer
and Seller are unable to resolve any such disagreements within thirty (30) days
after such Seller's notice, Buyer and Seller shall jointly retain the Auditor to
resolve the disagreements in accordance with Section 1.3(b) above (substituting
the words "Earnout Statement" for the words "Closing Statement of Working
Capital" therein). Within five business days after the Auditor notifies Buyer of
the Auditor's determination that Buyer owes an additional amount to Seller
pursuant to this Section 1.4 for such Anniversary Period, Buyer shall pay such
additional amount to Seller in immediately available funds plus interest on such
additional amount accruing after the sixty (60) days after the end of such
Anniversary Period at the Prime Rate, calculated on the basis of a 365-day year,
and such payment (excluding interest) shall be part of the Earnout Amount for
such Anniversary Period.
(d) For purposes hereof, "Plant Profits" for any given Anniversary Period
shall mean the consolidated net income solely with respect to the Company's
operations at Kendallville, Indiana, Bluffton, Ohio and Upper Sandusky, Ohio
facilities (and excluding the Company's Rochester Hills, Michigan facility) (the
"Southern Plants") for such Anniversary Period, as determined in accordance
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with GAAP plus, to the extent such net income has been reduced thereby, (i) the
amount of federal, state and local income taxes and other taxes imposed upon net
income or receipts of the Southern Plants plus (ii) the amount of amortization
in respect of intangible assets (including launch costs) for such Anniversary
Period plus (iii) the amount of interest expense for indebtedness for borrowed
money (including capitalized leases) for such Anniversary Period plus (iv)
management fees paid to Buyer, if any; provided however that such Plant Profits
will be adjusted pursuant to Schedule 1.4(d) attached hereto (the "Plant Profits
Adjustments Schedule").
(e) At the request of Seller, representatives of Buyer shall meet with
representatives of Seller on a quarterly basis (the "Oversight Committee") to
review and discuss the Company's current and future operations including,
without limitation, current and future staffing levels and repair and
maintenance matters as they relate to Plant Profits. The Buyer will, promptly
upon completion thereof, provide Seller copies of the Company's unaudited
balance sheet and related statement of operations on a quarterly basis during
each Anniversary Period.
1.5 CLOSING TRANSACTIONS.
(a) Closing. The closing of Buyer's purchase of the Company Stock
contemplated by this Agreement (the "Closing") will take place at the offices of
Kirkland & Ellis, 200 East Randolph Drive, Chicago, Illinois 60601, on May 31,
1996 or on such other date selected by Buyer which is reasonably satisfactory to
Seller. The date and time of the Closing are herein referred to as the "Closing
Date."
(b) Buyer's Deliveries. Subject to the conditions set forth in this
Agreement, Buyer agrees to deliver to Seller the following items at Closing:
(i) an amount equal to the Cash Purchase Price in immediately
available funds;
(ii) certificates representing the Shares;
(iii) the Note;
(iv) the Warrant;
(v) an opinion, dated as of the Closing Date, of Kirkland & Ellis,
counsel to Buyer, substantially in the form of Exhibit C attached hereto;
(vi) certified copies of the resolutions of Buyer's board of directors
approving the transactions contemplated by this Agreement; and
(vii) evidence of HSR approval.
(c) Seller's Deliveries. Subject to the conditions set forth in this
Agreement, Seller agrees to deliver to Buyer the following items at Closing:
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(i) certificates representing the Company Stock owned by Seller,
duly endorsed for transfer with all requisite state and federal transfer
stamps (if any) affixed thereto;
(ii) all minute books and stock transfer books of the Company in
Seller's possession or under its control;
(iii) all third party and governmental consents, approvals, filings,
releases and terminations required in connection with the consummation of
the transactions contemplated hereby that are received by Seller prior to
the Closing Date;
(iv) the resignations from the Board of Directors of the Company of
Lee Gardner and Timothy Wadhams in form reasonably satisfactory to Buyer;
(v) all documents and assistance necessary (including estoppel
certificates, owner's affidavits and gap undertakings) for Buyer to obtain,
at Buyer's cost and expense, ALTA Owners Policies of Title Insurance, Form
B-1990, for each parcel of Real Property, issued by Lawyers Title Insurance
Company (the "Title Insurer"), effective as of the Closing Date, in such
amount as Buyer reasonably determines to be the fair market value thereof
(including all Improvements thereon), insuring the Company's interest in
such parcel as of the Closing Date, subject only to the Permitted
Encumbrances, and with such endorsements and other terms and conditions as
Buyer may reasonably request;
(vi) all documentation and assistance necessary to enable Buyer to
procure, at Buyer's cost and expense, current surveys for each parcel of
the Real Property (the "Surveys"), prepared by a licensed surveyor and
conforming to 1992 ALTA/ACSM Minimum Detail Requirements for Urban Land
Title Surveys, and such standards as the Title Insurer may reasonably
require as a condition to the removal of any survey exceptions from the
Title Policy, and certified to Seller, Buyer, Buyer's lenders and the Title
Insurer, in a form sufficient to permit the issuance of the title policies
described in Section 1.5(c)(v);
(vii) an opinion, dated as of the Closing Date, of Seller's counsel,
substantially in the form set forth on Exhibit D attached hereto;
(viii) certified copies of the resolutions of the Seller's board of
directors approving the transactions contemplated by this Agreement; and
(ix) certificates of the secretary of state of each state in which
the Company is qualified to do business as set forth on the Qualifications
Schedule (as defined in Section 2.1 below), stating that the Company is in
good standing in such state.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY
----------------------
As a material inducement to Buyer to enter into this Agreement, Seller
represents and warrants that:
2.1 ORGANIZATION AND CORPORATE POWER. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is qualified to do business in every jurisdiction in which the
nature of its business or its ownership of property requires it to be so
qualified. All such jurisdictions in which the Company is so qualified are set
forth on Schedule 2.1 attached hereto (the "Qualifications Schedule"). Except as
set forth on the Environmental Requirements Schedule, the Company has full
corporate power and authority and all material licenses, permits and
authorizations necessary to own and operate its properties and to carry on its
business as now conducted and presently proposed to be conducted. The copies of
the Company's certificate of incorporation and by-laws included in the
Qualifications Schedule reflect all amendments made thereto and are correct and
complete.
2.2 AUTHORIZATION OF TRANSACTIONS. No corporate proceedings on the part of
the Company are necessary to approve and authorize the execution and delivery of
this Agreement and all other agreements contemplated hereby and the consummation
of the transactions contemplated hereby and thereby.
2.3 CAPITALIZATION. All of the issued and outstanding shares of the
Company Stock have been duly authorized, are validly issued, fully paid and
nonassessable, are not subject to, nor were they issued in violation of, any
preemptive rights, and are owned of record and beneficially by Seller. There are
no outstanding or authorized options, warrants, rights, contracts, calls, puts,
rights to subscribe, conversion rights or other similar securities, agreements
or commitments to which the Company is a party or by which the Company is bound
providing for the issuance, disposition or acquisition of any of its capital
stock (other than this Agreement). There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to the Company. There
are no voting trusts, proxies or any other agreements or understandings with
respect to the voting of the capital stock of the Company. The Company is not
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock.
2.4 SUBSIDIARIES; INVESTMENTS. The Company does not own or hold any shares
of stock or any other security or interest in any other Person or any rights to
acquire any such security or interest. For purposes hereof, "Person" means an
individual, a partnership, a limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
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2.5 ABSENCE OF CONFLICTS. Except as set forth in Schedule 2.5 attached
hereto (the "Restrictions Schedule"), the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby do
not and will not (a) conflict with or result in any breach of any of the
provisions of, (b) constitute a default under, (c) result in a violation of, (d)
give any third party the right to terminate or to accelerate any obligation
under, (e) result in the creation of any lien, security interest, charge or
encumbrance upon the Company Stock under, or (f) require any authorization,
consent, approval, exemption or other action by or notice to any court or other
governmental body under, the provisions of the certificate of incorporation or
by-laws of the Company or any indenture, mortgage, lease, loan agreement or
other agreement or instrument by which the Company is bound or affected, or any
law, statute, rule or regulation or any judgment, order or decree to which the
Company is subject.
2.6 FINANCIAL STATEMENTS. Schedule 2.6 attached hereto (the "Financial
Statements Schedule") includes copies of the (i) unaudited balance sheet as of
April 30, 1996 (the "Latest Balance Sheet") and the related statement of income
and operations for the 4-months then ended and (ii) unaudited balance sheet as
of, and the related statements of income for, the fiscal year ended December 31,
1994 and 1995. Except as set forth on the Financial Statements Schedule, each of
the foregoing financial statements (including in all cases the notes thereto, if
any) (the "Financial Statements") is accurate and complete, was prepared from
the Company's financial books and financial records, presents fairly the
Company's financial condition and results of operations as of the times and for
the periods referred to therein, and has been prepared in accordance with GAAP.
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. The Company has no obligations or
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise,
whether or not known, whether due or to become due and regardless of when
asserted) arising out of transactions entered into at or prior to the Closing,
or any action or inaction at or prior to the Closing, or any state of facts
existing at or prior to the Closing, except (i) liabilities or obligations under
contracts or commitments included in the Contracts Schedule (as defined) or
under contracts and commitments which are not required to be disclosed thereon
(but not liabilities for breaches thereof), (ii) liabilities reflected on the
liabilities side of the Latest Balance Sheet, (iii) liabilities which have
arisen after the date of the Latest Balance Sheet in the ordinary course of
business (none of which is a liability for breach of contract, breach of
warranty, tort or infringement, or a claim or lawsuit, or an environmental
liability), and (iv) liabilities otherwise expressly disclosed in this Agreement
or the schedules attached hereto or generally described on the Financial
Statements Schedule.
2.8 ABSENCE OF CERTAIN DEVELOPMENTS. Except as set forth in Schedule 2.8
attached hereto (the "Developments Schedule") since April 30, 1996, the Company
has conducted its business and operations in the usual and ordinary course of
business in accordance with past custom and practice, including, without
limitation, collection of accounts receivable, payment of accounts payable,
repairs and maintenance, capital expenditures and cash management practices
generally, and except as expressly contemplated by this Agreement, since April
30, 1996, the Company has not:
(a) suffered a material adverse change in the business, financial
condition, operating results, assets or customer, supplier, employee or sales
representative relations of the Company;
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(b) redeemed or repurchased, directly or indirectly, any shares of its
capital stock;
(c) issued, sold or transferred any notes, bonds or other debt securities
or any equity securities, securities convertible, exchangeable or exercisable
into equity securities, or warrants, options or other rights to acquire equity
securities, of the Company;
(d) borrowed any amount or incurred or become subject to any liabilities,
except current liabilities incurred in the ordinary course of business and
intercompany borrowings from Seller;
(e) mortgaged, pledged or subjected to any lien, charge or any other
encumbrance, any portion of its properties or assets;
(f) sold, leased, assigned or transferred (including without limitation
transfers to Seller or its affiliates) any portion of its tangible assets
(excluding cash), except in the ordinary course of business, or cancelled
without fair consideration any debts or claims owing to or held by it;
(g) sold, assigned, licensed or transferred (including without limitation
transfers to any Seller or affiliates) any Proprietary Rights or disclosed any
confidential information other than to an affiliate of the Company or pursuant
to agreements preserving all rights of the Company in such confidential
information or, to the Company's knowledge, received any confidential
information of any third party in violation of any obligation of
confidentiality;
(h) suffered any theft, damage, destruction or loss in excess of $50,000,
to its tangible assets, whether or not covered by insurance or suffered any
substantial destruction of the Company's books and records;
(i) entered into, amended or terminated any lease, contract, agreement,
commitment, or any other transaction in excess of $50,000 other than in the
ordinary course of business and in accordance with past custom and practice, or
entered into any transaction or agreement which will survive the Closing with
any Insider;
(j) made or granted any bonus or any wage, salary or compensation increase
in excess of $50,000 per year to any employee, sales representative, or
consultants or made or granted any increase in any employee benefit plan or
arrangement, or amended or terminated any existing employee benefit plan or
arrangement or adopted any new employee benefit plan or arrangement;
(k) made any loans or advances (except intercompany loans or advances) to,
or guarantees for the benefit of, any persons; or
(l) changed or authorized any change in its certificate of incorporation
or by-laws.
2.9 REAL AND PERSONAL PROPERTY.
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(a) Schedule 2.9(a) attached hereto (the "Real Property Schedule") sets
forth a list of all owned U.S. real property and owned foreign real property
(collectively, the "Real Property"). With respect to each such parcel of Real
Property except as set forth on the Real Property Schedule: (i) such parcel is
free and clear of all encumbrances, except Permitted Encumbrances; (ii) there
are no leases, subleases, licenses, concessions, or other agreements, written or
oral, granting to any person the right of use or occupancy of any portion of
such parcel; and (iii) there are no outstanding actions or rights of first
refusal to purchase such parcel (other than the right of the Buyer pursuant to
this Agreement), or any portion thereof or interest therein. "Permitted
Encumbrances" shall mean: (A) statutory liens for current taxes or other
governmental charges with respect to the Real Property not yet due and payable
or the amount or validity of which is being contested in good faith by
appropriate proceedings by Seller and for which appropriate accruals have been
established in accordance with GAAP; (B) mechanics, carriers, workers, repairers
and similar statutory liens arising or incurred in the ordinary course of
business for amounts which are not delinquent and which are not, individually or
in the aggregate, material to the Company; (C) zoning, entitlement, building and
other land use regulations imposed by governmental agencies having jurisdiction
over the Real Property which are not violated by the current use and operation
of the Real Property (except as set forth on Schedule 2.9(f)); and (D) those
matters shown on the title commitments and policies delivered pursuant to
Section 1.5(c)(v) above.
(b) The assets owned or leased by the Company, including all buildings,
machinery, equipment, and other tangible assets, are in adequate operating
condition for the conduct of the business of the Company as presently conducted.
(c) Except as set forth on Schedule 2.9(c) attached hereto (the "Personal
Property Schedule"), the Company has good title to, or a valid leasehold
interest in, all personal property used in connection with the operation of the
business of the Company, free and clear of all mortgages, pledges, security
interests, encumbrances, charges or other liens.
(d) Schedule 2.9(d) attached hereto (the "Leases Schedule") sets forth a
list of all of the Company's real property leases and subleases ("Leases") and
each leased and subleased parcel of real property in which the Company has a
leasehold or subleasehold interest (the "Leased Real Property"). Each of the
Leases is in full force and effect and the Company holds a valid and existing
leasehold or subleasehold interest under each of the Leases. Seller has
delivered to Buyer complete and accurate copies of each of the Leases. With
respect to each Lease: (i) the Lease is legal, valid, binding, enforceable and
in full force and effect except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and limitations on the availability of equitable remedies and other
matters affecting the landlord's interests; (ii) the Lease will continue to be
legal, valid, binding, enforceable and in full force and effect on identical
terms following the Closing except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and limitations on the availability of equitable
remedies and other matters affecting the landlord's interests; (iii) neither the
Company, nor to the knowledge of the Company any other party to the Lease, is in
breach or default, and no event has occurred which, with notice or lapse of
time, would constitute such a breach or default or permit termination,
modification or acceleration under the
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Lease; (iv) the Lease has not been modified in any respect, except to the extent
that such modifications are disclosed by the documents delivered to Buyer and
there are no disputes between the parties to the Lease; and (v) the Company has
not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered
any interest in the Lease.
(e) There are no proceedings in eminent domain or other similar proceedings
pending or, to the knowledge of Seller, threatened, affecting any portion of the
Real Property or, to Seller's knowledge, the Leased Real Property. There exists
no writ, injunction, decree, order or judgment outstanding, nor any litigation,
pending or to the knowledge of Seller threatened, relating to the ownership,
lease, use, occupancy or operation by any person of the Real Property or the
Leased Real Property. The current use of the Real Property (and, to Seller's
knowledge, the Leased Real Property) does not violate in any material respect
any instrument of record or agreement affecting such Real Property or Leased
Real Property. There are no dues, assessments or other amounts currently owed
with respect to the Real Property due under an instrument of record. Except as
set forth on Schedule 2.9(e) attached hereto, (the "Occupancy Schedule") there
is no violation of any covenant, condition, restriction, easement, agreement or
order of any governmental authority having jurisdiction over any of the Real
Property (or, to Seller's knowledge, with respect to the Leased Real Property)
that affects such real property or the use or occupancy thereof. No damage or
destruction has occurred with respect to any of the Real Property or the Leased
Real Property that, individually or in the aggregate, has had or resulted in, or
will have or result in, a significant adverse effect on the operation of the
Company.
(f) Except as set forth on Schedule 2.9(f) attached hereto (the
"Improvements Schedule"), all components of all buildings, structures and other
improvements included within the Real Property and the Leased Real Property (the
"Improvements") are in adequate condition to operate the Company's business as
currently operated, to the best of Seller's knowledge and belief, there are no
facts or conditions affecting any of the Improvements which would, individually
or in the aggregate, interfere in any significant respect with the use,
occupancy or operation thereof as currently used, occupied or operated or
currently intended to be used, occupied or operated. Except as set forth on the
Improvements Schedule, all water, gas, electrical, steam, compressed air,
telecommunication, sanitary and storm sewage lines and systems and other similar
systems serving the Real Property and the Leased Real Property are installed and
operating and are sufficient to enable the Real Property and the Leased Real
Property to continue to be used and operated in the manner currently being used
and operated. Except as disclosed on the Surveys, each Improvement has direct
access to a public street adjoining the Real Property and the Leased Real
Property on which such Improvement is situated over the driveways and accessways
currently being used in connection with the use and operation of such
Improvement and no existing accessway crosses or encroaches upon any property or
property interest not owned by the Company. To the knowledge of Seller, no
Improvement or portion thereof is dependent for its access, operation or utility
on any land, building or other improvement not included in the Real Property and
the Leased Real Property. Except as disclosed on the Surveys, there are no
survey defects or encroachments from or onto any of the Real Property and the
Leased Real Property.
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2.10 ACCOUNTS RECEIVABLE. Except as set forth on Schedule 2.10 attached
hereto (the "Accounts Receivable Schedule"), all of the notes and accounts
receivable of the Company reflected on the Latest Balance Sheet are, and all
notes and accounts receivable of the Company reflected on the Closing Statement
of Working Capital will be, good and valid receivables, net of allowance for
doubtful accounts. As of the Closing Date, there are no individual accounts
receivable which are more than 151 days past due, except as set forth on the
Accounts Receivable Schedule. As of the Closing Date, no person or entity will
have any lien on such receivables or any part thereof, and no agreement for
deduction, free goods, discount, reduction for excess transportation, or other
deferred price or quantity adjustment will have been made with respect to any
such receivables other than in the ordinary course of business.
2.11 INVENTORY. Except as set forth in Schedule 2.11 attached hereto (the
"Inventory Schedule"), the inventories of the Company reflected on the Latest
Balance Sheet are of, and the inventories of the Company as reflected on the
Closing Statement of Working Capital will consist of, a quantity and quality
usable and saleable in the ordinary course of business without discount, are not
damaged, defective, slow-moving (i.e., greater than the requirement based on
written releases (other than service parts)) or obsolete (in each case net of
any reserves for slow moving or obsolete inventory reflected on the Closing
Statement of Working Capital).
2.12 TAXES.
(a) Except as set forth in Schedule 2.12 attached hereto (the "Taxes
Schedule"), the Company has filed all Tax Returns which it is required to file
under applicable laws and regulations; all such Tax Returns are complete and
correct and have been prepared in compliance with all applicable laws and
regulations; the Company has paid all Taxes due and owing by it (whether or not
such Taxes are required to be shown on a Tax Return) and has withheld and paid
over to the appropriate taxing authority all Taxes which it is required to
withhold from amounts paid or owing to any employee, equityholder, creditor or
other third party; the Company has not waived any statute of limitations with
respect to any Taxes or agreed to any extension of time with respect to any Tax
assessment or deficiency; the Company has not incurred any liability for Taxes
other than in the ordinary course of business; the assessment of any additional
Taxes for periods for which Tax Returns have been filed by the Company shall not
exceed the recorded liability therefor on the Closing Statement of Working
Capital (excluding any amount recorded which is attributable solely to timing
differences between book and Tax income); no foreign, federal, state or local
tax audits or administrative or judicial proceedings are pending or being
conducted with respect to the Company, no information related to Tax matters has
been requested by any foreign, federal, state or local taxing authority and no
written notice indicating an intent to open an audit or other review has been
received by the Company from any foreign, federal, state or local taxing
authority; and there are no material unresolved questions or claims concerning
the Company's Tax liability.
(b) Except as set forth in the Taxes Schedule, with respect to each
Affiliated Group of which the Company is or has been a member: (i) such
Affiliated Group has filed all Federal income Tax Returns which it is required
to file under applicable law and regulations and all such Federal income Tax
Returns are complete and correct and have been prepared in compliance in all
material
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respects with all applicable laws and regulations; (ii) no material
assessment for any additional Federal income Taxes for periods for which Tax
Returns have been filed by such Affiliated Group have been made against such
Affiliated Group; and (iii) no Federal income Tax audits or administrative or
judicial proceedings are pending or being conducted with respect to such
Affiliated Group.
(c) The Company has not made an election under (S) 341(f) of the Internal
Revenue Code of 1986, as amended ("IRC"). The Company is not liable for the
Taxes of another Person under (a) Treasury Regulation (S) 1.1502-6 (or
comparable provisions of state, local or foreign law), (b) as a transferee or
successor, (c) by contract or indemnity or (d) otherwise. The Company is not a
party to any tax sharing agreement. The Company and each Affiliated Group have
disclosed on their federal income Tax Returns any position taken for which
substantial authority (within he meaning of IRC (S) 6662(d)(2)(B)(i)) did not
exist at the time the return is filed. The Company has not made any payments, is
not obligated to make payments and is not a party to an agreement that could
obligate it to make any payments that would not be deductible under IRC (S)
280G.
(d) No claim has been made, for which the statute of limitations has not
expired, by a taxing authority in a jurisdiction where the Company does not file
tax returns that the Company is or may be subject to taxes assessed by such
jurisdiction.
(e) There are no liens for Taxes (other than for current Taxes not yet due
and payable) upon the assets of the Company.
(f) The Company will not be required (i) as a result of a change in method
of accounting for a taxable period ending on or prior to the Closing Date, to
include any adjustment in taxable income for any taxable period (or any portion
thereof) or (ii) as a result of any "closing agreement," as described in IRC (S)
7121 (or any corresponding provision of state, local or foreign income Tax law),
to include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing
Date.
(g) The Company has not been a member of an Affiliated Group other than the
one of which Seller or the Company was the common parent, or filed or been
included in a combined, consolidated or unitary income Tax Return, other than
one filed by Seller or the Company.
(h) Buyer will not be required to deduct and withhold any amount pursuant
to IRC (S) 1445(a) upon the transfer of the Company Stock to the Buyer.
(i) The Company does not own any interest in real property in any
jurisdiction in which a tax (other than a net income or franchise tax or
transfer tax) is imposed on the gain on a transfer of an interest in real
property.
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(j) As used in this Agreement, the following terms shall have the following
respective meanings:
(i) "Affiliated Group" means an affiliated group as defined in Section
1504 of the Code (or any similar combined, consolidated or unitary group
defined under state, local or foreign income Tax law).
(ii) "Tax" or "Taxes" means any federal, state, local or foreign
income, gross receipts, franchise, estimated, alternative minimum, add-on
minimum, sales, use, transfer, registration, value added, excise, natural
resources, severance, stamp, occupation, premium, windfall profit,
environmental, customs, duties, real property, personal property, capital
stock, social security, unemployment, disability, payroll, license,
employee or other withholding, or other tax, of any kind whatsoever,
including any interest, penalties or additions to tax or additional amounts
in respect of the foregoing.
(iii) "Tax Returns" means returns, declarations, reports, claims for
refund, information returns or other documents (including any related or
supporting schedules, statements or information) filed or required to be
filed in connection with the determination, assessment or collection of
Taxes of any party or the administration of any laws, regulations or
administrative requirements relating to any Taxes.
2.13 CONTRACTS AND COMMITMENTS.
(a) Except as specifically contemplated by this Agreement and except as set
forth in Schedule 2.13 attached hereto (the "Contracts Schedule"), the Company
is not a party to or bound by, whether written or oral, any: (i) collective
bargaining agreement or contract with any labor union or any bonus, pension,
profit sharing, retirement or any other form of deferred compensation plan or
any stock purchase, stock option, hospitalization insurance or similar plan or
practice, whether formal or informal; (ii) contract for the employment of any
officer, individual employee or other Person on a full-time or consulting basis
or any severance agreements; (iii) agreement or indenture relating to the
borrowing of money or to mortgaging, pledging or otherwise placing a lien on any
of its assets; (iv) agreements with respect to the lending or investing of
funds; (v) license, sublicense or royalty agreements; (vi) lease or agreement
under which it is lessee of, or holds or operates, any personal property owned
by any other party calling for payments in excess of $50,000 annually; (vii)
lease or agreement under which it is lessor of or permits any third party to
hold or operate any property, real or personal, owned or controlled by it;
(viii) contract or group of related contracts with the same party for the
purchase or sale of supplies, products or other personal property or for the
furnishing or receipt of services which involves a sum in excess of $50,000
annually; (ix) contract or group of related contracts with the same party
continuing over a period of more than 6 months from the date or dates thereof,
not terminable by it on 30 days' or less notice without penalties or payments;
(x) contract which prohibits it from freely engaging in business anywhere in the
world; (xi) contract relating to the distribution, marketing or sales of its
products; (xii) agreements, contracts or understandings pursuant to which the
Company subcontracts work to third parties; (xiii) contract or other agreement
under which it agrees to indemnify another party under a contract involving a
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sum in excess of $50,000 annually or guarantee the obligations of another party
in an amount in excess of $50,000; or (xiv) other agreement material to it
whether or not entered into in the ordinary course of business.
(b) Except as specifically contemplated by this Agreement or disclosed in
the Contracts Schedule, (i) neither the Seller nor the Company has knowledge of
any cancellation, breach or anticipated breach by any other party to any
contract or commitment required to be disclosed on the Contracts Schedule, (ii)
the Company has performed all the obligations required to be performed in
connection with the contracts or commitments required to be disclosed on the
Contracts Schedule and is not in receipt of any written claim of default under
any contract or commitment required to be disclosed on the Contracts Schedule,
(iii) the Company has no present expectation or intention of not fully
performing any obligation pursuant to any contract required to be disclosed on
the Contracts Schedule, and (iv) since September 1, 1995, to the knowledge of
Messrs. Junk, Hunt, Glogowski, Pitzer or Wasylyk, no customer has indicated in
writing or orally to Seller or to the Company that it will stop or materially
decrease the rate of any business done with the Company which accounts for $5.0
million in revenues or that it desires to renegotiate its contract with the
Company.
(c) The Contracts Schedule includes all written contracts which are
referred to on the Contracts Schedule, in each case together with all
amendments, waivers or other changes thereto. The Contracts Schedule contains a
description of all material terms of all oral contracts referred to therein.
2.14 PROPRIETARY RIGHTS.
(a) "Proprietary Rights" shall mean all of the following items owned
by, issued to or licensed to, the Company: (i) patents, patent applications,
patent disclosures and inventions; (ii) trademarks, service marks, trade dress,
logos, designs, trade names and corporate names together with all goodwill
associated therewith; (iii) copyrights registered or unregistered and
copyrightable works and all derivative works thereof; (iv) all registrations,
applications and renewals for any of the foregoing; (v) trade secrets and
confidential information; (vi) computer software and licensed program products
licensed to or used by the Company; (vii) any other proprietary rights; and
(viii) all copies and tangible embodiments, in each case including, without
limitation, the items set forth on Schedule 2.14 attached hereto (the
"Proprietary Rights Schedule").
(b) The Proprietary Rights comprise all of the intellectual property owned
by or used in and necessary for the operation of the Company's business as
currently conducted or as currently proposed to be conducted by the Company. The
Proprietary Rights Schedule sets forth a complete and correct list of: (i) all
patented or registered Proprietary Rights and all pending patent applications
and other applications for registration of Proprietary Rights owned, filed or
used by the Company; (ii) all trade names and unregistered trademarks used by
the Company; (iii) all computer software (other than "off-the-shelf" software)
licensed to or used by the Company; and (iv) all licenses or similar agreements
or arrangements to which the Company is a party either as licensee or licensor.
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(c) Except as set forth in the Proprietary Rights Schedule, (i) the Company
owns and possesses all right, title and interest in and to, or has a valid and
enforceable right to use, each of the Proprietary Rights free and clear of all
liens and encumbrances, and no claim by any third party contesting the validity,
enforceability, use or ownership of any of the Proprietary Rights has been made,
is currently outstanding or to the knowledge of Seller is threatened, and to the
knowledge of Seller there are no grounds for same; (ii) the Company has received
no notices of, nor is the Company aware of any facts which indicate a likelihood
of, any infringement or misappropriation by, or conflict with any rights of, any
third party with respect to any Proprietary Right including, without limitation,
any demand or request that the Company license rights from a third party; and
(iii) to the Seller's knowledge the Company has not otherwise infringed,
misappropriated or otherwise conflicted with any rights of any third parties and
the Company is not aware of any infringement which will occur as a result of the
continued operation of the Company's business as currently conducted.
(d) Except as otherwise set forth in Section 6.19 below, all of the
Proprietary Rights are or will be owned by, or properly assigned or licensed to,
the Company at the time of the Closing. The transactions contemplated by this
Agreement will have no adverse effect on the Company's right, title and interest
in and to the Proprietary Rights. The Company has taken all reasonable actions
to maintain and protect the Proprietary Rights necessary in light of the nature
of the Company's business so as not to adversely affect the ownership, validity
or enforcement of such Proprietary Rights.
(e) To the knowledge of Seller and the Company, Seller has no rights in any
patent, patent application, or, to its knowledge, discovery capable of being
patented that blocks the Company's ability to practice the best use of any item
listed in the Proprietary Rights Schedule.
2.15 LITIGATION; PROCEEDINGS. Except as set forth in Schedule 2.15 attached
hereto (the "Litigation Schedule"), there are no actions, suits, proceedings,
orders or investigations pending or, to the knowledge of the Company and Seller,
threatened against or affecting the Company or any of its assets at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, and there is no basis known to the Company or Seller for any of the
foregoing. Except as set forth on the Litigation Schedule, in the two years
prior to the Closing Date the Company has not received any written opinion or
written legal advice to the effect that the Company is exposed from a legal
standpoint to any liability which may be material to the Company's business as
previously or presently conducted or business prospects.
2.16 BROKERAGE. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf of the
Company or Seller.
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2.17 GOVERNMENTAL LICENSES AND PERMITS.
(a) Schedule 2.17(a) attached hereto (the "Licenses Schedule") contains a
complete listing and summary description of all permits, certificates of
occupancy, licenses, franchises, certificates, approvals and other
authorizations of foreign, federal, state and local governments or other similar
rights (collectively, the "Licenses") owned or possessed by the Company and no
other Licenses are required in the conduct of its business or used by the
Company in the conduct of its business. Except as indicated on the Licenses
Schedule, the Company owns or possesses all right, title and interest in and to
all of the Licenses which are necessary to conduct its business as presently
conducted. No loss or expiration of any License is, to the knowledge of the
Company or Seller, threatened, pending or reasonably foreseeable (including,
without limitation, as a result of the transactions contemplated hereby) other
than expiration in accordance with the terms thereof.
(b) Except for HSR Approval and except as set forth on Schedule 2.17(b)
attached hereto (the "Governmental Consent Schedule"), no permit, approval or
authorization of, or declaration to or filing with, any governmental or
regulatory authority is required to be obtained by the Company or Seller in
connection with its execution, delivery and performance of this Agreement or the
consummation of any other transaction contemplated hereby. "HSR Approval" shall
mean all authorizations and approvals required by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 as amended and the rules and regulations
promulgated thereunder that are required for the consummation of the
transactions contemplated hereby.
2.18 EMPLOYEE BENEFIT PLANS.
(a) Except as set forth on Schedule 2.18 attached hereto (the "Employee
Benefit Plans Schedule"), with respect to current or former employees of the
Company, the Company does not maintain or contribute to or have any liability
with respect to any (i) nonqualified deferred compensation, bonus or retirement
plans or arrangements, (ii) qualified defined contribution or defined benefit
plans or arrangements which are employee pension benefit plans (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA"),
or (iii) employee welfare benefit plans (as defined in Section 3(1) of ERISA),
stock option or stock purchase plans, or material fringe benefit plans or
programs. Except as set forth on the Employee Benefit Plans Schedule, since
January 1, 1990, the Company has not contributed to any multiemployer plan (as
defined in Section 3(37) of ERISA), and the Company has not maintained or
contributed to any defined benefit plan (as defined in Section 3(35) of ERISA).
Except as set forth on the Employee Benefit Plans Schedule, the Company does not
maintain or contribute to any employee welfare benefit plan which provides
health, accident or life insurance benefits to former employees, their spouses
or dependents, other than in accordance with Section 4980B of the IRC ("COBRA").
(b) The employee pension benefit plans and employee welfare benefit plans
set forth on the Employee Benefit Plans Schedule (and related trusts and
insurance contracts) comply in form and in operation in all material respects
with all applicable laws and regulations, including ERISA and the IRC; and each
such employee pension benefit plan meets the requirements of "qualified plans"
under Section 401(a) of the IRC, and each such employee pension benefit plan,
and each trust
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(if any) forming a part thereof, has received a favorable determination letter,
or has timely applied for a favorable determination letter, from the Internal
Revenue Service as to the qualification under the IRC of such plan and the tax-
exempt status of such related trust, or is a new plan which is made up of
employee pension benefit plans which previously received such a favorable
determination letter, and nothing has occurred since the date of such
determination letter that could adversely affect the qualification of such plan
or the tax exempt status of such related trust.
(c) All required reports and descriptions (including Form 5500 Annual
Reports, Summary Annual Reports and Summary Plan Descriptions) with respect to
the employee pension benefit plans and employee welfare benefit plans have been
properly and timely filed in substantial compliance with applicable law and
regulations with the appropriate government agency and distributed to
participants as required. The Company has complied with the requirements of
COBRA .
(d) With respect to each employee pension benefit plan, all contributions
which are due (including all employer contributions and employee salary
reduction contributions) have been paid to such employee pension benefit plan,
all contributions for prior plan years which are not yet due and with respect to
the current plan year for the period ending on the Closing Date have been made
or accrued in accordance with GAAP, and, with respect to the employee welfare
benefit plans, all premiums or other payments which are due on or before the
Closing Date have been paid.
(e) The Company has no liability or potential liability to the Pension
Benefit Guaranty Corporation, the Internal Revenue Service, any multiemployer
plan, the Department of Labor, or to any participant or beneficiary other than
ordinary benefit claims or payments with respect to any employee pension benefit
plan currently or previously maintained by any company, which together with the
Company would be deemed to be part of a "controlled group" within the meaning of
subsections (b), (c), (m) or (o) of Section 414 of the IRC.
(f) With respect to each employee pension benefit plan and each employee
welfare benefit plan, (i) there have been no prohibited transactions as defined
in Section 406 of ERISA or Section 4975 of the IRC, (ii) no fiduciary (as
defined in Section 3(21) of ERISA) has any liability for breach of fiduciary
duty or any other failure to act or comply in connection with the administration
or investment of the assets of such plans, and (iii) no actions, investigations,
suits or claims with respect to the assets thereof (other than routine claims
for benefits) are pending or threatened, and the Company has no knowledge of any
facts which would give rise to or could reasonably be expected to give rise to
any such actions, suits or claims.
(g) With respect to each of the employee pension benefit plans and each
employee welfare benefit plan, the Company has furnished to Buyer true and
complete copies of (i) the plan documents and summary plan descriptions, (ii)
the most recent determination letter received from the Internal Revenue Service,
(iii) the last Form 5500 Annual Report (including all schedules and other
attachments), and (iv) all related trust agreements, insurance contracts or
other funding agreements which implement such plans.
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2.19 INSURANCE. Schedule 2.19 attached hereto (the "Insurance Schedule")
lists and briefly describes the insurance coverage maintained by the Company
with respect to its properties, assets and business. All such coverage shall
terminate as of the Closing Date.
2.20 OFFICERS AND DIRECTORS; BANK ACCOUNTS. Schedule 2.20 attached hereto
(the "Officers and Directors Schedule") lists all officers and directors of the
Company, and all of the Company's bank accounts (designating each authorized
signatory and the level of each signatory's authorization).
2.21 AFFILIATE TRANSACTIONS. Except as generally described on Schedule 2.21
attached hereto (the "Affiliate Transactions Schedule"), neither Seller nor any
of its affiliates (collectively, the "Insiders") is a party to any agreement,
contract, commitment or transaction with the Company or that pertains to the
business of the Company or has any interest in any property, real or personal or
mixed, tangible or intangible, used in or pertaining to the business of the
Company.
2.22 COMPLIANCE WITH LAWS. Except as set forth on Schedule 2.22 attached
hereto (the "Compliance Schedule"), the Company has complied with all applicable
laws, regulations and zoning ordinances of foreign, federal, state and local
governments and all agencies thereof which affect the business, business
practices (including, but not limited to, the Company's production, marketing,
sales and distribution of its products and services), any real or personal
properties of the Company and to which the Company may be subject, and the
Company is not aware of and has not received any notice alleging a violation of
any such laws or regulations.
2.23 ENVIRONMENTAL AND SAFETY MATTERS.
(a) Except as set forth on Schedule 2.23(a) attached hereto (the
"Environmental Requirements Schedule"), the Company since January 1, 1993 has
complied, and is in compliance, with all Environmental and Safety Requirements
(as defined).
(b) Without limiting the generality of the foregoing, the Company has
obtained and since January 1, 1993 complied with, and is currently in compliance
with, all permits, licenses and other authorizations that may be required
pursuant to Environmental and Safety Requirements for the occupation of its
facilities and the operation of its businesses. A list of all such permits,
licenses and other authorizations is set forth on Schedule 2.23(b) attached
hereto (the "Environmental Permits Schedule").
(c) Except as set forth on Schedule 2.23(c) attached hereto (the
"Environmental Claims Schedule"), since January 1, 1993 the Company has not
received any claim, complaint, citation, report or other information regarding
any actual or alleged violation of Environmental and Safety Requirements or any
liabilities or potential liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any investigatory, remedial or corrective
obligations, arising under Environmental and Safety Requirements ("Environmental
Claim"). The Company has not received an Environmental Claim prior to January 1,
1993, the subject matter of which has not been fully settled or resolved.
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(d) Without limitation upon any other subsection of this Section 2.23,
except as disclosed on Schedule 2.23(d) attached hereto (the"Environmental
Disclosure Schedule"), to Seller's knowledge none of the following exists at any
property used, occupied or operated by the Company:
(i) underground storage tanks;
(ii) asbestos-containing material in any form or condition;
(iii) materials or equipment containing polychlorinated biphenyls; or
(iv) surface impoundments, landfills, or other disposal areas.
(e) Except as set forth on Schedule 2.23(e) attached hereto (the "Hazardous
Substances Schedule"), the Company has not treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled, or released any
substance, including without limitation any hazardous substance, or owned or
operated any property or facility (and no such property or facility is
contaminated by any such substance) in a manner that has given or could give
rise to liabilities of the Company, including any liability for response costs,
corrective action costs, personal injury, property damage, natural resources
damages or attorney fees, pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA") or the Solid Waste
Disposal Act, as amended ("SWDA") or any other Environmental and Safety
Requirements.
(f) To the Company's knowledge, no facts, events or conditions relating to
the past or present facilities, properties or operations of the Company prevent,
hinder or limit compliance with Environmental and Safety Requirements, give rise
to any investigatory, remedial or corrective obligations pursuant to
Environmental and Safety Requirements, or give rise to any other liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise) pursuant to
Environmental and Safety Requirements, including without limitation any relating
to onsite or offsite releases or threatened releases of hazardous or otherwise
regulated materials, substances or wastes, personal injury, property damage or
natural resources damage.
(g) Neither this Agreement nor the transaction that is the subject of this
Agreement will result in any obligations for site investigation or cleanup, or
notification to or consent of government agencies or third parties, pursuant to
any transaction-triggered or responsible property transfer Environmental and
Safety Requirements.
(h) The Company has not, either expressly or by operation of law, assumed
or undertaken any liability, including without limitation any obligation for
corrective or remedial action, of any other Person arising under Environmental
and Safety Requirements.
(i) To the knowledge of Seller, no Environmental Lien (as defined) has
attached to any property owned, leased or operated by the Company.
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(j) As used in this Section 2.23, the following terms shall have the
following respective meanings:
(i) "Environmental and Safety Requirements" shall mean all federal,
state, local and foreign statutes, regulations, ordinances and similar
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation all those relating
to the presence, use, production, generation, handling, transport, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge,
release, threatened release, control, or cleanup of any hazardous or otherwise
regulated materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls or noise.
(ii) "Environmental Lien" shall mean a lien, either recorded or
unrecorded, in favor of any governmental entity, relating to any liability of
the Company arising under Environmental and Safety Requirements.
2.24 PRODUCT WARRANTY AND PRODUCT LIABILITY.
(a) No liabilities (other than ordinary course liabilities (such ordinary
course liabilities not to include recalls)) exist for repair, replacement or
other damages in connection with any products designed, manufactured,
merchandised, serviced, distributed, sold or delivered by the Company at any
time prior to the Closing Date. No products heretofore sold by the Company are
now subject to any guarantee or warranty other than the Company's and its
customers' standard terms and conditions of purchase and sale.
(b) The Company has no liabilities, other than ordinary course liabilities,
arising out of any injury to individuals or property as a result of the
ownership, possession, or use of any product manufactured, sold, leased, or
delivered by the Company and to the Company's knowledge there is no basis for
any present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against the Company giving rise to any liability.
2.25 EMPLOYEES. To the knowledge of the Seller and the Company, none of the
management and other key employees of the Company has any plans to terminate
employment with the Company. Except as set forth on Schedule 2.25 attached
hereto (the "Employees Schedule"), Seller and the Company have no knowledge of
any organizational effort presently being made or threatened by or on behalf of
any labor union with respect to the employees of the Company. Except as set
forth in the Employees Schedule, the Company has complied with all applicable
laws relating to the employment of labor and within the last three years, the
Company has not experienced any strikes, unresolved grievances, unfair labor
practice claims or unresolved disputes with former employees of the Company
regarding termination and/or severance pay.
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2.26 POWERS OF ATTORNEY; GUARANTEES. Except as set forth on Schedule 2.26
attached hereto (the "Powers Schedule"), there are no outstanding powers of
attorney executed on behalf of the Company. The Company is not a guarantor or
otherwise liable for any indebtedness or other obligations of any other Person
other than endorsements for collection in the ordinary course of business.
2.27 PRODUCTS. Except as set forth on Schedule 2.27 attached hereto (the
"Products Schedule"), to the knowledge of Seller and the Company, no products,
components or parts currently produced by the Company which are projected to
generate at least $250,000 in annual revenues are presently scheduled to balance
out prior to December 31, 1997.
2.28 FORD LTA. Schedule 2.28 attached hereto (the "Ford LTA Schedule") sets
forth the current status of the Company's LTA negotiations with Ford Motor
Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO SELLER
-----------------------------------------------------
As a material inducement to Buyer to enter into this Agreement, Seller
represents and warrants to Buyer that:
3.1 AUTHORIZATION OF TRANSACTIONS. Seller has full power and authority to
execute and deliver this Agreement and all other agreements contemplated hereby
to which Seller is a party, and to perform its obligations and to consummate the
transactions contemplated hereby and thereby. This Agreement and the other
agreements contemplated hereby to which Seller is a party has been duly executed
and delivered by Seller and constitute the valid and binding agreements of
Seller, enforceable against Seller in accordance with their terms, except as
enforceability hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and limitations
on the availability of equitable remedies.
3.2 ABSENCE OF CONFLICTS. Neither the execution, delivery or performance of
this Agreement and the other documents contemplated hereby to which Seller is a
party, nor the consummation of the transactions contemplated hereby and thereby,
will (a) conflict with, (b) result in a breach of any of the provisions of, (c)
constitute a default under, (d) result in the violation of, (e) give any third
party the right to terminate or to accelerate any obligation under, (f) result
in the creation of any lien, security interest or charge or encumbrance upon the
Company Stock under, or (g) require any authorization, consent, approval,
execution or other action by or notice to any court or other governmental body
under, the provisions of any indenture, mortgage, lease, loan agreement or other
agreement or instrument to which Seller is bound or affected, or any statute,
regulation, rule, judgment, order, decree or other restriction of any
government, governmental agency or court to which Seller is subject. No notice
to, filing with or authorization, consent or approval of any government or
governmental agency by Seller is necessary for the consummation of the
transactions
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contemplated by this Agreement and the other documents contemplated hereby to
which Seller is a party.
3.3 SHARES. The authorized, issued and outstanding capital stock of the
Company is as it is set forth in the recitals of this Agreement and Seller holds
of record and owns beneficially 100% of the issued and outstanding shares of
Company Stock, free and clear of any restrictions on transfer (other than any
restrictions under the Securities Act of 1933, as amended, and the state
securities laws), claims, taxes, liens, charges, encumbrances, pledges, security
interests, options, warrants, rights, contracts, calls, commitments, equities
and demands. Seller is not a party to any option, warrant, right, contract,
call, put or other agreement or commitment providing for the disposition or
acquisition of any capital stock of the Company (other than this Agreement).
Seller is not a party to any voting trust, proxy or other agreement or
understanding with respect to the voting of any capital stock of the Company.
3.4 LITIGATION. There are no actions, suits, proceedings, orders or
investigations pending or, to the best of Seller's knowledge, threatened against
or affecting Seller at law or in equity, or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which would adversely affect Seller's
performance under this Agreement and the other agreements contemplated hereby to
which Seller is a party or the consummation of the transactions contemplated
hereby or thereby.
3.5 INVESTMENT REPRESENTATION. In connection with the issuance of the
Shares and the Warrant hereunder from Parent, Seller represents and warrants to
Buyer that:
(a) Seller has had an opportunity to ask questions and receive answers
concerning the terms and conditions of the Shares and the Warrant, has had full
access to such other information concerning Parent and Buyer as Seller has
requested and possesses substantial information about, and familiarity with
Parent and Buyer as a result of the information provided to Seller;
(b) Seller is able to bear the economic risk of the investment in the
Shares and the Warrant for an indefinite period of time;
(c) Seller is acquiring the Shares and the warrant hereunder for its own
account with the present intention of holding such security for investment
purposes and has no intention of selling such security in a public distribution
in violation of federal or state securities laws; and
(d) Seller is an accredited investor, as such term is defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
--------------------------------------------------
As a material inducement to Seller to enter into this Agreement, each of
Buyer and Parent, as appropriate, hereby represents and warrants to Seller that:
4.1 CORPORATE ORGANIZATION AND POWER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Michigan, with full corporate power and authority to enter into this Agreement
and the other agreements contemplated hereby to which Buyer is a party and
perform its obligations hereunder and thereunder. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with full corporate power and authority to enter into this Agreement
and the other agreements contemplated hereby to which Parent is a party and
perform its obligations hereunder and thereunder.
4.2 AUTHORIZATION. The execution, delivery and performance of this
Agreement and the other agreements contemplated hereby to which Buyer or Parent
is a party by Buyer and Parent, respectively, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all requisite corporate action on the part of Buyer and Parent,
respectively, and no other corporate proceedings on their part are necessary to
authorize the execution, delivery or performance of this Agreement. This
Agreement constitutes, and each of the other agreements contemplated hereby to
which Buyer or Parent is a party will when executed constitute, a valid and
binding obligation of Buyer and Parent, respectively, enforceable in accordance
with their terms, except as enforceability hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and limitations on the availability of equitable remedies.
4.3 ABSENCE OF CONFLICTS. Neither the execution, delivery or performance of
this Agreement and the other documents contemplated hereby to which Buyer or
Parent is a party, nor the consummation of the transactions contemplated hereby
and thereby, will (a) conflict with, (b) result in a breach of any of the
provisions of, (c) constitute a default under, (d) result in the violation of,
(e) give any third party the right to terminate or to accelerate any obligation
under, or (f) require any authorization, consent, approval, execution or other
action by or notice to any court or other governmental body under, the
provisions of any indenture, mortgage, lease, loan agreement or other agreement
or instrument to which Buyer or Parent is bound or affected, or any statute,
regulation, rule, judgment, order, decree or other restriction of any
government, governmental agency or court to which Buyer or Parent is subject. No
notice to, filing with or authorization, consent or approval of any government
or governmental agency by Buyer or Parent is necessary for the consummation of
the transactions contemplated by this Agreement and the other documents
contemplated hereby to which Buyer or Parent is a party.
4.4 INVESTMENT INTENT. Buyer is acquiring the Company Stock for its own
account for investment and not with a view to, or for sale in connection with,
any distribution thereof, nor with any present intention of distributing or
selling the same in violation of applicable securities laws.
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4.5 LITIGATION. There are no actions, suits, proceedings, orders or
investigations pending or, to the best of Buyer's knowledge, threatened against
or affecting Buyer or Parent at law or in equity, or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which would adversely affect
Buyer's or Parent's performance under this Agreement and the other agreements
contemplated hereby to which Buyer or Parent is a party or the consummation of
the transactions contemplated hereby or thereby.
4.6 REPORTS. Since September 1, 1994, Parent has filed all reports,
registrations and statements, together with any amendments required to be made
with respect thereto, that were and are required to be filed with the Securities
and Exchange Commission, including but not limited to Forms 10-K, Forms 10-Q,
Forms 8-K and proxy statements (all such reports and statements are collectively
referred to herein as the "Parent Reports"). As of their respective dates, the
Parent Reports complied and all will comply in all material respects with all
the statutes, rules and regulations enforced or promulgated by the regulatory
authority with which they were filed and did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.7 BROKERS' FEES. Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which Seller could become liable or
obligated.
ARTICLE V
INDEMNIFICATION AND RELATED MATTERS
-----------------------------------
5.1 SURVIVAL. All representations, warranties, covenants and agreements set
forth in this Agreement or in any writing delivered in connection with this
Agreement will survive the Closing Date and the consummation of the transactions
contemplated hereby and will not be affected by any examination made for or on
behalf of Buyer, the knowledge of any of its officers, directors, stockholders,
employees or agents, or the acceptance of any certificate or opinion; provided,
however, with respect to representations and warranties set forth in Articles
II, III and IV, such representations and warranties shall survive for the
periods set forth in subsections 5.2(c) and 5.2(d), as applicable.
5.2 INDEMNIFICATION.
(a) Seller agrees to indemnify Buyer, its officers, directors and
stockholders (the "Buyer Group") and hold them harmless from and against any
loss, liability, deficiency, damage or expense including, without limitation,
reasonable legal expenses and costs and including interest and penalties (a
"Loss") (net of (x) any amounts when and as recovered by the Buyer Group with
respect
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to the matter for which the Buyer Group is being indemnified under insurance
policies for the benefit of the Buyer Group that reduce the losses that would
otherwise be sustained, except to the extent by which the Buyer Group can
demonstrate the premiums of such policies have increased as a result of such
recovery (it being understood that in the event such a Loss is incurred and
indemnity hereunder is requested prior to the Buyer Group's receipt of any such
insurance proceeds, Seller shall indemnify the Buyer Group in full and the Buyer
Group will pay over such proceeds to the Seller when and as received by the
Buyer Group, but not in excess of the amount previously so paid by Seller), (y)
any reduction in federal, state, local or foreign income or franchise tax
liability when and as realized at any time by the Buyer Group in connection with
the losses in respect to which indemnification is sought hereunder and (z) any
reserves to the extent reflected on the Closing Statement of Working Capital
which relate directly to any item for which indemnification is sought hereunder)
which the Buyer Group may suffer, sustain or become subject to, to the extent
resulting from (i) the breach by Seller of any representation or warranty made
by Seller contained in Articles II or III hereof; provided, however, with
respect to Section 2.23 above, without giving effect to any disclosure set forth
on the Hazardous Substances Schedule, (ii) the breach by Seller of any
representation, warranty (other than representations and warranties set forth in
Articles II or III hereof), covenant or agreement made by Seller contained in
this Agreement, any exhibit hereto or any certificate delivered by the Company
or Seller to Buyer in connection with the Closing, (iii) any claims of any
brokers or finders claiming by, through or under Seller or by, through or under
the Company in respect of the transactions contemplated herein, (iv) the
Company's non-compliance with applicable Environmental and Safety Requirements
(other than applicable OSHA rules and regulations), (v) any customer claim
arising under or related to any tooling costs incurred and billed by the Company
or Seller prior to the Closing Date, (vi) the operations or ownership of
property at any of the Sellers', its subsidiaries' or their successors' or
transferees' facilities located in Oxford, Michigan, Troy, Michigan, St. Clair
Shores, Michigan, Berne, Indiana or Harrison, Michigan, whether arising before
or after the Closing Date including, without limitation, any claims or
liabilities relating to the items set forth on the Litigation Schedule in which
the injury, or event giving rise to the claim thereunder, occurred at any such
facility (except as otherwise provided for in the Component Resourcing Agreement
dated May 6, 1996 among Seller, Buyer and W. C. McCurdy Company (the "Oxford
Agreement")), (vii) the Company's non-compliance with applicable OSHA rules and
regulations (and any similar state statutes, rules and regulations) other than
with respect to those matters addressed in Section 6.18 below, (viii) any
indemnification or other obligation arising under, or related to, the Company's
sale of its assets located in St. Clair Shores, Michigan and Troy, Michigan and
(ix) the matters addressed under Section 6.20 hereof.
(b) (i) With respect to claims for breaches of representations and
warranties referred to in Section (a)(i) above, Seller will be liable to the
Buyer Group for Losses arising therefrom only if the aggregate amount of all
such Losses resulting to the Buyer Group from all such breaches or claims
exceeds $1,500,000, in which case Seller will be liable only for such excess,
and (ii) with respect to any claim referred to in Section 5.2(a) above, Seller
shall not be liable to the Buyer Group to the extent such Losses exceed the
Purchase Price; provided that the foregoing clause (i) shall not apply in
respect of any Loss with respect to the breach by the Seller of any
representation or warranty made by Seller in Sections 2.2, 2.3 and 2.12 (solely
to the extent such Loss is attributable to federal
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or state income taxes or any franchise taxes, including any interest or
penalties payable thereon) and in Sections 3.1 and 3.3.
(c) Seller will be liable to the Buyer Group with respect to claims
referred to (i) in subsection (a)(i) above only if Buyer gives Seller written
notice thereof within two years after the Closing Date, except for claims
arising from breaches of the representations and warranties (A) set forth in
Section 2.12 as to which claims must be made prior to the expiration of the
applicable statute of limitation with respect thereto, (B) set forth in Sections
2.2, 2.3, 3.1 and 3.3 as to which claims may be made at any time, and (C) set
forth in Section 2.23 as to which claims may be made any time within five years
after the Closing Date, (ii) in subsection (a)(vii) above only for Losses
actually incurred within 90 days after the Closing Date by the Company or the
Buyer Group relating to any injury which occurs, or any fines or other penalties
which are imposed on the Company or the Buyer Group, as a result of the
occurrence of such non-compliance, prior to the Closing Date or during the
period of 90 days after the Closing Date, all such Losses not to exceed $150,000
in the aggregate and (iii) in subsection (a)(iv) above only for Losses actually
incurred within 90 days after the Closing Date by the Company or the Buyer Group
relating to any fines or other penalties which are imposed on the Company or the
Buyer Group as a result of the occurrence of such non-compliance prior to the
Closing Date or during the period of 90 days after the Closing Date.
(d) Buyer agrees to indemnify Seller and hold Seller harmless from and
against any Loss which Seller may suffer, sustain or become subject to, as the
result of a breach of any representation, warranty, covenant, or agreement by
Buyer contained in this Agreement; provided however, with respect to claims for
breaches of representations and warranties set forth in (i) Sections 4.3 and
4.5, Buyer will be liable only if Seller gives Buyer written notice thereof
within two (2) years after the Closing Date and (ii) Section 4.6, Buyer will be
liable only if Seller gives Buyer written notice thereof prior to the expiration
of the applicable statute of limitations with respect thereto.
(e) If a party hereto seeks indemnification under this Section 5.2, such
party (the "Indemnified Party") shall give written notice to the other party
(the "Indemnifying Party") of the facts and circumstances giving rise to the
claim. In that regard, if any suit, action, claim, liability or obligation shall
be brought or asserted by any third party (a "Third Party Claim") which, if
adversely determined, would entitle the Indemnified Party to an indemnity
payment pursuant to this Section 5.2, the Indemnified Party shall promptly
notify the Indemnifying Party of the same in writing, specifying in reasonable
detail the basis of such claim and the facts pertaining thereto and the
Indemnifying Party may elect (except that the Indemnifying Party may not so
elect without the Indemnified Party's written consent if (i) such Third Party
Claim seeks to impose any liability or obligation upon the Indemnified Party
other than for money damages, or (ii) such Third Party Claim relates to a claim
made by the Indemnified Party's customers or employees) to assume and control
the defense thereof (and shall consult with the Indemnified Party with respect
thereto), including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of expenses; provided, however, that the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without prior written
consent of the Indemnified Party (not to be withheld unreasonably) unless the
judgment or proposed
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settlement involves only the payment of money damages solely by the Indemnifying
Party and does not impose an injunction or any other equitable relief upon the
Indemnified Party.
(f) If the Indemnifying Party has failed to assume the defense of any Third
Party Claim, the Indemnified Party may defend against such Third Party Claim in
any manner it may reasonably deem appropriate; provided, however, if the
Indemnifying Party is prevented from electing control of any defense as a result
of the Indemnified Party's refusal to give written consent thereto (i) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim involving the payment of
money damages by the Indemnifying Party without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), (ii) the fees and expenses
of any counsel employed by the Indemnified Party shall be split evenly between
the Indemnified Party and the Indemnifying Party and (iii) the Indemnifying
Party shall have the right to employ counsel separate from counsel employed by
the Indemnifying Party in any such action and to participate in the defense
thereof. If the Indemnifying Party elects to assume and control the defense, the
Indemnified Party shall have the right to employ counsel separate from counsel
employed by the Indemnifying Party in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel employed by the
Indemnified Party shall be at the expense of the Indemnified Party unless the
employment thereof has been specifically authorized by the Indemnifying Party in
writing.
(g) Effective upon the Closing, except as otherwise set forth in the Oxford
Agreement, Seller hereby irrevocably waives, releases and discharges forever the
Company from any and all liabilities and obligations to Seller, its affiliates,
officers and directors of any kind or nature whatsoever in existence as of the
Closing Date, whether in its or his capacity as Seller hereunder, as a
stockholder, officer or director of the Company or otherwise, including, without
limitation, in respect of rights of contribution or indemnification, in each
case whether absolute or contingent, liquidated or unliquidated, and whether
arising hereunder or under any other agreement or understanding or otherwise at
law or equity, and Seller hereby covenants and agrees that it will indemnify and
hold harmless the Company and the Buyer Group from and against all such
liabilities or obligations.
(h) (i) After the Closing, and with respect to environmental matters for
which Seller is obligated to indemnify Buyer under Section 5.2(a)(iv) and under
Section 5.2(a)(i) (which would entitle the Indemnified Party to an indemnity
payment pursuant to this Section 5.2), Seller shall, upon acknowledging such
obligation in writing, have the option to assume principal control of any such
environmental matter and to (i) obtain any tests, reports, and surveys necessary
to define and delineate the extent of any contamination or noncompliance, (ii)
contact governmental authorities, make any reports to such authorities, submit
any remediation or compliance plans to such authorities, negotiate with such
authorities, and otherwise deal with such authorities, (iii) prepare the work
plan for any remediation or correction of noncompliance, and (iv) conduct or
direct any such remediation or correction of noncompliance. If Seller elects to
assume principal control of such environmental matter, Seller shall manage such
environmental matter in good faith and any activities conducted in connection
therewith shall be undertaken promptly and concluded expeditiously, using all
reasonable efforts, subject to the schedules and approvals required by the
applicable governmental or regulatory
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authorities. To carry out its obligations under this Agreement, Seller shall,
provided Seller provides Buyer reasonable advance notice, have reasonable access
to the affected premises and the right to perform any such environmental
remediation, investigation, assessment, sampling, monitoring, treatment,
removal, cleanup or other action required by governmental authorities to comply
with Environmental and Safety Requirements ("Remediation") by means approved by
applicable governmental or regulatory authorities and considered reasonable and
customary in the environmental engineering profession (including the right to
construct and maintain wells, dikes, "caps" or covers, barriers, pump and treat
systems, soil vapor extraction systems, other testing and treatment equipment
and systems, related buildings and structures, and supporting utility services
on such premises, the right to perform excavations and exhumations of soils and
subsurface materials and withdrawals and reinjections of groundwater on such
premises); provided, however, that Seller will not unreasonably interfere with
the normal business operations of the Company and provided, further, that Seller
shall not compound or aggravate any environmental matter for which it is not
indemnifying Buyer pursuant to Section 5.2(a) above. Seller agrees to promptly
dispose of all soil, groundwater, waste, decontamination water, cuttings,
samples, or other material generated as a result of the Remediation, and agrees
to restore the affected premises as nearly as is feasible to its prior condition
as soon as practicable. Any such Remediation shall be deemed sufficient to
satisfy corresponding obligations under this Agreement so long as the result
meets or exceeds applicable standards (including any standards resulting from
any site-specific risk assessments) under all applicable Environmental and
Safety Requirements in effect at the time of completion of the Remediation based
on the use of the property as of the Closing Date. Buyer will cooperate with
Seller (including by making relevant personnel and non-privileged records
available to Seller at all reasonable times without charge for any immaterial
internal costs) in connection with the Remediation.
(ii) Buyer will cooperate with Seller in connection with Seller's
efforts to seek reimbursement under applicable governmental underground
storage tank or other reimbursement programs relating to Environmental and
Safety Requirements and under applicable insurance policies of the Company
which are in effect for periods prior to the Closing relating to
remediation or other liabilities for which Seller may be responsible that
are related to or arise out of Environmental and Safety Requirements.
(iii) Seller shall keep the Buyer regularly informed regarding such
Remediation and shall provide the Buyer with copies of all monitoring,
sampling and other data relating to the Remediation. Seller shall give
Buyer the opportunity to review and comment in advance upon any material
submissions to governmental or regulatory authorities with respect to the
Remediation and Seller shall reasonably address and incorporate Buyer's
comments that are within the scope of Seller's obligation hereunder. Buyer
shall have the right to attend and participate in material meetings with
governmental or regulatory authorities with respect to the Remediation.
(iv) To better delineate the respective obligations of Seller and
Buyer with respect to environmental matters involving the Company, Buyer
will use commercially reasonable best efforts to cause the Company to
conduct its operations after the Closing Date in material
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compliance with Environmental and Safety Requirements so as not to compound
or aggravate any environmental condition or noncompliance for which Seller
is responsible under this Agreement.
(v) Buyer will maintain in confidence information concerning any
environmental matter for which Seller is obligated to indemnify Buyer under
Section 5.2(a). Notwithstanding the foregoing, Buyer may disclose such
information (A) in confidence to any Person with whom Buyer proposes to
enter into contract for any commercial purpose, including financing
entities; (B) as required by Environmental and Safety Requirements or any
other applicable law, including, without limitation, securities laws; (C)
in order to attain compliance with Environmental and Safety Requirements;
and (D) that is otherwise publicly available. Buyer shall not take action
designed to initiate or encourage a claim by a third party, including any
governmental agency, concerning an environmental matter for which Seller is
obligated to indemnify Buyer under Section 5.2(a). Notwithstanding the
foregoing, Buyer may take any action required by Environmental and Safety
Requirements, in order to attain compliance with Environmental and Safety
Requirements, or take such proactive action that is reasonable and prudent
under the circumstance in order to prevent or mitigate a risk to human
health or the environment. If Buyer intends to disclose information or take
action concerning an environmental matter for which Seller is obligated to
indemnify Buyer under Section 5.2(a), Buyer will notify Seller of such
proposed disclosure or action.
(i) The indemnification provisions in this Agreement shall be the
exclusive remedy (other than equitable remedies and remedies for intentional
misrepresentation) for any breach of the representations, warranties and
covenants contained in this Agreement. Without limiting the generality of the
foregoing, Buyer explicitly waives to the extent permitted by applicable law any
rights and remedies under the common law, and any statutory rights and remedies,
that it otherwise might have against Seller after the Closing with respect to
the Company, excluding any remedy that Buyer may have for intentional
misrepresentation, in which case the foregoing indemnification provisions are in
addition to, and not in derogation of, any statutory or common law remedy the
Buyer may have for such intentional misrepresentation.
(j) Nothing set forth in this Section 5.2 shall be construed to require
the Company or the Buyer Group to modify the terms, scope or size of their
insurance coverage as in effect on the Closing Date.
(k) Subject to the terms and conditions set forth in this Section 5.2, in
the event of a breach of any representation, warranty, covenant or agreement
contained in this Agreement, the non-breaching party may, at its option, setoff
all or any portion of a Loss for which the parties do not dispute (or any other
Loss after a Final Determination is made with respect thereto pursuant to
Section 5.3(e) below) which such party suffers, sustains or becomes subject to
as a result of such breach against any amounts due or to become due to the
breaching party pursuant to this Agreement or the Note.
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5.3 ARBITRATION PROCEDURES.
(a) The parties hereto agree that the arbitration procedure set forth
below shall be the sole and exclusive method for resolving and remedying claims
for money damages arising out of this Agreement (the "Disputes"), except as
otherwise provided by Sections 1.3 and 1.4 above. Nothing in this Section 5.3
shall prohibit a party hereto from instituting litigation to enforce any Final
Determination (as defined in subsection (e) below) or availing itself of the
other remedies set forth in Sections 6.6, 6.8(b) and 6.11(f) below. The parties
hereto hereby agree and acknowledge that, except as otherwise provided in this
Section 5.3 or in the Commercial Arbitration Rules of the American Arbitration
Association, as in effect from time to time, the arbitration procedures and any
Final Determination hereunder shall be governed by, and shall be enforced
pursuant to the Uniform Arbitration Act of the State of Michigan.
(b) In the event that any party hereto asserts that there exists a
Dispute, such party shall deliver a written notice to each other party involved
therein specifying the nature of the asserted Dispute and requesting a meeting
to attempt to resolve the same. If no such resolution is reached within 20
business days after such delivery of such notice, the party delivering such
notice of Dispute (the "Disputing Person") may, within 45 business days after
delivery of such notice, commence arbitration hereunder by delivering to each
other party involved therein a notice of arbitration (a "Notice of
Arbitration"). Such Notice of Arbitration shall specify the matters as to which
arbitration is sought, the nature of any Dispute, the claims of each party to
the arbitration and shall specify the amount and nature of any damages, if any,
sought to be recovered as a result of any alleged claim, and any other matters
required by the Commercial Arbitration Rules of the American Arbitration
Association, as in effect from time to time, to be included therein, if any.
(c) Buyer and Seller shall each select one independent arbitrator expert
in the subject matter of the Dispute (the arbitrators so selected shall be
referred to herein as "Buyer's Arbitrator" and "Seller's Arbitrator,"
respectively). In the event that either party fails to select an independent
arbitrator as set forth herein within 20 days from delivery of a Notice of
Arbitration, then the matter shall be resolved by the arbitrator selected by the
other party. Seller's Arbitrator and Buyer's Arbitrator shall select a third
independent arbitrator expert in the subject matter of the dispute, and the
three arbitrators so selected shall resolve the matter according to the
procedures set forth in this Section 5.3. If Seller's Arbitrator and Buyer's
Arbitrator are unable to agree on a third arbitrator within 20 days after their
selection, Seller's Arbitrator and Buyer's Arbitrator shall each prepare a list
of three independent arbitrators. Seller's Arbitrator and Buyer's Arbitrator
shall each have the opportunity to designate as objectionable and eliminate one
arbitrator from the other arbitrator's list within seven days after submission
thereof, and the third arbitrator shall then be selected by lot from the
arbitrators remaining on the lists submitted by Seller's Arbitrator and Buyer's
Arbitrator.
(d) The arbitrator(s) selected pursuant to subsection (c) above will
determine the allocation of the costs and expenses of arbitration based upon the
percentage which the portion of the contested amount not awarded to each party
bears to the amount actually contested by such party. For example, if Buyer
submits a claim for $1,000, and if Seller contests only $500 of the amount
claimed by Buyer, and if the arbitrator(s) ultimately resolves the dispute by
awarding Buyer $300
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of the $500 contested, then the costs and expenses of arbitration will be
allocated 60% (i.e. 300 / 500) to Seller and 40% (i.e. 200 / 500) to Buyer.
(e) The arbitration shall be conducted under the Commercial Arbitration
Rules of the American Arbitration Association as in effect from time to time,
except as modified by the agreement of all parties. The arbitrator(s) shall so
conduct the arbitration that a final result, determination, finding, judgment
and/or award (the "Final Determination") is made or rendered as soon as
practicable, but in no event later than the later of 90 business days after the
delivery of the Notice of Arbitration and 10 days following completion of the
arbitration. The Final Determination must be agreed upon and signed by the sole
arbitrator or by at least two of the three arbitrators (as the case may be). The
Final Determination shall be final and binding on all parties and there shall be
no appeal from or reexamination of the Final Determination, except for fraud,
perjury, evident partiality or misconduct by an arbitrator prejudicing the
rights of any party and except to correct manifest clerical errors.
(f) Buyer and Seller may enforce any Final Determination in any state or
federal court having jurisdiction over the dispute. For the purpose of any
action or proceeding instituted with respect to any Final Determination, each
party hereto hereby irrevocably submits to the jurisdiction of such courts,
irrevocably consents to the service of process by registered mail or personal
service and hereby irrevocably waives, to the fullest extent permitted by law,
any objection which it may have or hereafter have as to personal jurisdiction,
the laying of the venue of any such action or proceeding brought in any such
court and any claim that any such action or proceeding brought in such court has
been brought in any inconvenient forum.
(g) If any party shall fail to pay the amount of any damages, if any,
assessed against it within 10 days of the delivery to such party of such Final
Determination, the unpaid amount shall bear interest from the date of such
delivery at the lesser of (i) the prime rate, as declared by Citibank, N.A. from
time to time (which rate shall be adjusted on the effective date of each change
in such rate) (the "Prime Rate") plus 300 basis points and (ii) the maximum rate
permitted by applicable usury laws. Interest on any such unpaid amount shall be
compounded semiannually, computed on the basis of a 365-day year and shall be
payable on demand. In addition, such party shall promptly reimburse the other
party for all reasonable costs or expenses of any nature or kind whatsoever
(including but not limited to all attorneys' fees) incurred in seeking to
collect such damages or to enforce any Final Determination.
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
6.1 TAX MATTERS. The following provisions shall govern the allocation of
responsibility as between Buyer and Seller for certain tax matters following the
Closing Date:
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(a) Tax Periods Ending on or Before the Closing Date. Buyer shall prepare
or cause to be prepared and file or cause to be filed all Tax Returns for the
Company for all periods ending on or prior to the Closing Date which are filed
after the Closing Date (other than (i) income Tax Returns with respect to
periods for which the consolidated, unitary and combined income Tax Returns of
Seller will include the operations of the Company and (ii) Tax Returns filed
under the Michigan Single Business Tax, each of such Tax Returns the Seller will
prepare and pay such Taxes). Seller shall pay to Buyer within fifteen (15) days
of the date on which any such Taxes are paid by Buyer with respect to such
period an amount equal to such Taxes to the extent such Taxes are not accrued on
the Closing Statement of Working Capital.
(b) Tax Periods Beginning Before and Ending After the Closing Date. Buyer
shall prepare or cause to be prepared and file or cause to be filed any Tax
Returns of the Company for Tax periods which begin before the Closing Date and
end after the Closing Date. Seller shall pay to Buyer within fifteen (15) days
of the date on which Taxes are paid with respect to such periods an amount equal
to the portion of such Taxes which relates to the portion of such Taxable period
ending on the Closing Date to the extent such Taxes are not accrued on the
Closing Statement of Working Capital. For purposes of this Section, in the case
of any Taxes that are imposed on a periodic basis and are payable for a Taxable
period that includes (but does not end on) the Closing Date, the portion of such
Taxes which relates to the portion of such Taxable period ending on the Closing
Date shall (x) in the case of any Taxes other than Taxes based upon or related
to income, be deemed to be the amount of such Tax for the entire Taxable period
multiplied by a fraction the numerator of which is the number of days in the
Taxable period ending on the Closing Date and the denominator of which is the
number of days in the entire Taxable period, and (y) in the case of any Tax
based upon or related to income be deemed equal to the amount which would be
payable if the relevant Taxable period ended on the Closing Date. Any credits
relating to a Taxable period that begins before and ends after the Closing Date
shall be taken into account as though the relevant Taxable period ended on the
Closing Date. All determinations necessary to give effect to the foregoing
allocations shall be made in a manner consistent with prior practice of such
Company.
(c) Cooperation on Tax Matters.
(i) Buyer, the Company and Seller shall cooperate fully, as and to
the extent reasonably requested by the other party, in connection with the
filing of Tax Returns pursuant to this Section and any audit, litigation or
other proceeding with respect to Taxes. Such cooperation shall include (i)
the provision of records and information necessary for completion of 1996
Tax Returns within sixty (60) days after Closing and (ii) the retention and
(upon the other party's request) the provision of records and information
which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. The Company and Seller agree (A) to retain all books and records
with respect to Tax matters and pertinent to the Company relating to any
taxable period beginning before the Closing Date until the expiration of
the statute of limitations (and, to the extent notified by Buyer or Seller,
any extensions thereof) of the respective taxable periods, and to abide by
all record retention agreements entered into with any taxing
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authority, and (B) to give the other party reasonable written notice prior
to transferring , destroying or discarding any such books and records and,
if the other party so requests, the Company or Seller, as the case may be,
shall allow the other party to take possession of such books and records.
(ii) Buyer and Seller further agree, upon request, to use their best
efforts to obtain any certificate or other document from any governmental
authority or any other Person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including, but not limited to,
with respect to the transactions contemplated hereby).
(d) Tax Sharing Agreements. All tax-sharing agreements or similar
agreements with respect to or involving the Company shall be terminated as of
the Closing Date and, after the Closing Date, the Company shall not be bound
thereby or have any liability thereunder.
(e) Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement shall be paid by Seller
when due, and Seller will, at its own expense, file all necessary Tax Returns
and other documentation with respect to all such transfer, documentary, sales,
use, stamp, registration and other Taxes and fees, and, if required by
applicable law, Buyer will, and will cause its affiliates to, join in the
execution of any such Tax Returns and other documentation.
6.2 EMPLOYEE BENEFIT MATTERS.
(a) Effective the day following the Closing Date, those employees of the
Company whose employment with the Company shall continue after the Closing Date
(the "Continued Employees") shall cease to be covered under the employee benefit
plans of Seller and shall participate under the employee benefit plans, programs
and policies maintained by the Company. Seller shall remain liable for all
benefits accrued or claims incurred on or prior to the Closing Date under all
plans, programs and policies maintained by Seller, and the Company shall be
liable for all benefits accrued and claims incurred after the Closing Date under
the plans, programs and policies maintained by the Company. The Continued
Employees shall be covered under the Company's employee benefit plans without
any exclusion for pre-existing conditions and shall recognize the employees
service with Seller for purposes of vesting and eligibility under such plans.
(b) Seller shall remain liable for all workers' compensation claims
accrued or incurred on or prior to, or incurred as a result of any event
occurring or state of facts existing on or prior to, the Closing Date, and the
Company shall be liable for all workers' compensation claims incurred as a
result of any event occurring or state of facts existing after the Closing Date.
(c) As of the Closing Date, Seller shall vest each Continued Employee
under each employee benefit plan which is an employee pension benefit plan (as
defined in Section 3(2) of ERISA), and shall distribute the benefits accrued
through the Closing Date for such Continued Employees under each such plan in
accordance with the terms of said plans, assuming for such purpose that the
employees had terminated employment on the Closing Date. Seller has made or
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shall make all contributions for the benefit of the Continued Employees to such
plans, excluding profit sharing to the extent such contributions are
discretionary, for the pro rata portion of the 1996 fiscal year from January 1,
1996 through the Closing Date.
(d) Seller shall be solely responsible for the provision of health care
continuation coverage required under COBRA for those former employees of the
Company and other persons whose entitlement to continuation coverage occurred on
or before the Closing Date. The Company shall offer continuation coverage under
its group health plans to all eligible Continued Employees after the Closing
Date.
(e) Buyer shall cause the Company to use reasonable efforts to continue to
employ those employees employed by the Company as of the Closing Date (except
for those employees identified on Schedule 6.2 attached hereto), at salaries and
positions that are substantially the same as in effect immediately prior to the
Closing Date, until July 30, 1996.
(f) Seller shall pay within 45 days following the Closing Date (i) all
stay bonuses, employee retention bonuses, success bonuses and similar
arrangements which have been granted to the Company's employees prior to the
Closing Date and (ii) the pro-rata portion (based on the number of days between
January 1, 1996 and the Closing Date) of non-discretionary annual employee
bonuses.
(g) Except as otherwise provided, on and after the Closing Date and
through December 31, 1996, the retirees and employees of the Company as set
forth on Schedule 6.2(g) attached hereto (the "Retiree Schedule") (the
"Retirees") may remain covered (or eligible for coverage) under Seller's
employee benefit plans described in the January 1, 1996 Actuarial Valuation of
Post Retirement Life and Health Benefit Plans report. Seller will provide the
Company, on a quarterly basis, with a detailed description of the actual costs
of such Retirees' coverage under Seller's employee benefit plans and the Company
shall reimburse Seller for such costs, without regard to any claim by the
Company or Buyer for any offset or other claim against Seller . Upon providing
written notice to Seller on or prior to December 31, 1996, the Company shall
replace such coverage with coverage under employee benefit plans sponsored by
the Company. The Company also reserves the right to modify such coverage to the
extent allowed by law; provided that the Buyer will indemnify Seller for and
against any claims arising in any way from the Company's failure to maintain the
level of benefit coverage for Retirees which is identical to the level of
benefit coverage presently provided to Retirees by Seller.
6.3 INTERCOMPANY ACCOUNTS. Immediately prior to the Closing, the Seller
and any of its affiliates will cancel, without payment, any intercompany
accounts payable (or negative accounts receivable) owed by the Company to the
Seller or any of its affiliates.
6.4 PRESS RELEASES AND ANNOUNCEMENTS. After the Closing Date, no press
releases related to this Agreement and the transactions contemplated herein, or
other announcements to the employees, customers or suppliers of the Company will
be issued by a party hereto without the other party's consent (which shall not
be unreasonably withheld) except for any public disclosure which
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is required by law or regulation and which must be made within such a time frame
as to prevent the disclosing party from obtaining the other party's approval in
a timely fashion.
6.5 FURTHER TRANSFERS. Seller will execute and deliver such further
instruments of conveyance and transfer and take such additional action as Buyer
may reasonably request to effect, consummate, confirm or evidence the transfer
to Buyer of the Company Stock and any other transactions contemplated hereby.
6.6 SPECIFIC PERFORMANCE. Seller acknowledges that the Company's business
is unique and recognize and affirm that in the event of a breach of this
Agreement by Seller, money damages may be inadequate and Buyer may have no
adequate remedy at law. Accordingly, Seller agrees that Buyer shall have the
right, in addition to any other rights and remedies existing in its favor, to
enforce its rights and Seller's obligations hereunder not only by an action or
actions for damages but also by an action or actions for specific performance,
injunctive and/or other equitable relief.
6.7 TRANSITION ASSISTANCE.
(a) Seller will continue to provide, for a period not to exceed 60 days
from the Closing Date, to the Company those transition services which have been
supplied by Seller to Company and are requested by the Company to be continued
solely to the extent necessary to permit an orderly transition to the Buyer's
operations. The Company shall pay to Seller the out-of-pocket expenses
associated with any third-party contractors required in connection with such
services which are pre-approved in writing by the Company.
(b) The Company shall indemnify and hold harmless Seller from and against
all claims, liabilities and obligations (collectively "Claims") which have
resulted from the performance of Services by Seller hereunder; provided,
however, that the Company shall not be required to indemnify or hold harmless
Seller to the extent the Claims are caused by the gross negligence or willful
misconduct of Seller.
(c) Seller will not take any action which is designed or intended to have,
or which would be reasonably anticipated to have, the effect of discouraging
customers, suppliers, lessors, licensors and other business associates from
maintaining in all material respects the same business relationships with the
Company after the date of this Agreement as were maintained with the Company
prior to the date of this Agreement.
(d) The Company will continue to provide to Seller those services set
forth on Schedule 6.7(d) attached hereto (the "Company Services Schedule") for
the period set forth in the Company Services Schedule. The costs associated with
such services shall be paid as set forth in the Company Services Schedule.
Seller shall indemnify and hold harmless the Company and Buyer from and against
all Claims which have resulted from the performance of services by the Company
hereunder; provided, however, that Seller shall not be required to indemnify or
hold harmless the Company or Buyer to the extent the Claims are caused by the
gross negligence or willful misconduct of the Company or Buyer.
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6.8 INVESTIGATION; CONFIDENTIALITY.
(a) Seller will maintain the confidentiality of, and will not use for any
purpose, all proprietary and other non-public information regarding the Company
(including, without limitation, any of same included in the Proprietary Rights),
except as necessary to file tax returns and other reports to governmental
agencies. In the event that Seller is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any such
information, Seller will notify Buyer promptly of the request or requirement so
that Buyer may seek an appropriate protective order or waive compliance with the
provisions of this Section 6.8. If, in the absence of a protective order or the
receipt of a waiver hereunder, Seller is, on the advice of counsel, compelled to
disclose any information to any tribunal or else stand liable for contempt,
Seller may disclose the information to the tribunal; provided, however, that
Seller shall use its best efforts to obtain, at the request and expense of
Buyer, an order or other assurance that confidential treatment will be accorded
to such portion of the information required to be disclosed as Buyer shall
designate. This Section 6.8 shall survive any expiration or termination of this
Agreement.
(b) The parties hereto acknowledge and agree that in the event of a breach
by any party of any of the provisions of this Section 6.8, monetary damages will
not constitute a sufficient remedy. Consequently, in the event of any such
breach, any non-breaching party and/or their respective successors or assigns
may, in addition to other rights and remedies existing in their favor, apply to
any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violations
of the provisions hereof, in each case without the requirement of posting a bond
or proving actual damages.
6.9 EXPENSES. Except as otherwise provided herein, Buyer and Seller will
pay all of their own fees, costs and expenses (including, without limitation,
fees, costs and expenses of legal counsel, investment bankers, brokers or other
representatives and consultants and appraisal fees, costs and expenses) incurred
in connection with the negotiation of this Agreement, the performance of its
obligations hereunder, and the consummation of the transactions contemplated
hereby; it being understood that Seller will pay the fees, costs and expenses of
the Company and that the Company will not pay any of Seller's fees, costs and
expenses (including, without limitation, legal and accounting fees, costs and
expenses) arising in connection with the transactions contemplated thereby if
the transactions are consummated.
6.10 BOOKS AND RECORDS. Unless otherwise consented to in writing by Seller
or Buyer (as the case may be), Buyer and Seller will not, for a period of 7
years following the date hereof, destroy, alter or otherwise dispose of any of
the books and records of the Company acquired by Buyer hereunder or retained by
Seller without first offering to surrender to Seller or Buyer such books and
records or any portion thereof of which Seller or Buyer may intend to destroy,
alter or dispose of. Buyer and Seller will allow the other party's
representatives, attorneys and accountants access to such books and records,
upon reasonable request and during such party's normal business
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hours, for the purpose of examining and copying the same in connection with any
matter whether or not relating to or arising out of this Agreement or the
transactions contemplated hereby.
6.11 NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY. In
consideration of Buyer's agreement to enter into this Agreement, and as a
condition thereto, Seller covenants and agrees as follows:
(a) The Company manufacturers certain automotive products primarily using
stamping processes and which include chassis and suspension components, sub-
assemblies, and modules (which, whether or not being manufactured as of the date
hereof, are referred to herein as "Stampings"), including control arms, control
links, and other devices to control kinematics.
(b) Seller agrees that for a period of three years from and after the
Closing Date, Seller will not engage directly or indirectly in the manufacture,
solicitation or formulation of proposal, design (with the intent to manufacture
such Stamping) or sale of Stampings anywhere in North America; provided,
however, that notwithstanding the foregoing, nothing contained in this Agreement
shall (i) limit or affect businesses currently owned by Seller which may
manufacture or sell Stampings, (ii) limit or restrict Seller from engaging in
the manufacturing or sale of Stampings in conjunction with forging, hydroforming
or tubular products operations, (iii) limit or restrict Seller from engaging in
the manufacturing or sale of Stampings sold in the automotive aftermarket, (iv)
limit or restrict Seller from engaging in the manufacturing or sale of Stampings
as prototype parts for design contracts for which the intent is to provide
design support services to independent third parties and not to ultimately
manufacture such part or (v) prevent Seller from acquiring an entity which does
manufacture or sell Stampings so long as the competing business comprises ten
percent or less of the sales of the acquired entity.
(c) Seller further agrees that for a period of five years from and after
the Closing Date it will not directly or indirectly engage in the solicitation,
manufacture or sale of any control arms or control links, whether produced by
stamping, forging, hydroforming, casting or otherwise, on any of the following
platforms: the Ford DN-101, UN-105, CDW-27, CT-120, VX-133, PN-96, PHN-131, and
UN-93 and the Chrysler T-300; provided that nothing set forth herein shall
prohibit Seller from continuing to sell or manufacture control links on the
preceding platforms to the extent the Seller is engaged in such sale or
manufacturing on the Closing Date.
(d) Seller agrees that, for a period of two years from the Closing Date,
Seller will not, and will use its best efforts to not permit Seller's affiliates
to, directly or indirectly contact or solicit for the purpose of offering
employment to or hiring (whether as an employee, consultant, agent, independent
contractor or otherwise) or actually hire any management or other key employee
employed by the Company on the Closing Date, without the prior written consent
of the Company.
(e) If the final judgment of a court of competent jurisdiction declares
that any term or provision of Section 6.12 is invalid or unenforceable, the
parties hereto agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or area of
the term or provision, to delete specific words or phrases, or to replace any
invalid or
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unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified after the expiration of the time within which the judgment may be
appealed.
(f) Seller acknowledges and agrees that in the event of a breach by Seller
of any of the provisions of this Section 6.12, monetary damages will not
constitute a sufficient remedy. Consequently, in the event of any such breach,
the Company, Buyer and/or their respective successors or assigns may, in
addition to other rights and remedies existing in their favor, after written
notice to Seller, apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce
or prevent any violations of the provisions hereof, in each case without the
requirement of posting a bond or proving actual damages.
6.12 OPERATING LEASES.
(a) Seller and Buyer will use commercially reasonable efforts to have
Seller and its affiliates removed as obligors under Lease Supplement and
Acceptance Certificate No. 2 - 4 dated June 28, 1995 and Lease Supplement and
Acceptance Certificate No. 1 - 2 dated June 13, 1995 (collectively, the
"Supplements"), each supplementing that certain Master Equipment Lease Agreement
dated June 13, 1995 among Nationsbanc Leasing Corporation of North Carolina and
Seller and certain of its affiliates (the "Nationsbanc Lease") and, prior to
such removal, Seller and Buyer shall each comply with the terms of their
respective obligations under the Nationsbanc Lease (including, without
limitation, the obligation of each to make rent payments pursuant to the
Nationsbanc Lease), and shall use commercially reasonable efforts to prevent
and/or cure any default which may arise under the Nationsbanc Lease as a result
of Seller's or Buyer's or their respective affiliates' actions or inactions;
provided, however, that Buyer and the Company shall have no obligations with
respect to the Nationsbanc Lease in excess of the stated obligations under the
Nationsbanc Lease with respect to the Supplements (the "Lease Obligations") and
Seller shall indemnify and hold harmless Buyer and the Company with respect to
any obligations arising in connection with the Nationsbanc Lease which in the
aggregate exceed the Lease Obligations.
(b) Seller and Buyer will use commercially reasonable efforts to have
Seller removed as a guarantor under the property lease for the Company's
Rochester Hills, Michigan facility and prior to such removal Buyer shall, and
shall cause the Company to, comply with the terms of its obligations under such
lease and Seller shall comply with the terms of its obligations under such
guarantee arrangements.
6.13 SECURITIES LAWS LEGEND. The Shares and the Warrant will be imprinted
with a legend in substantially the following form:
The security represented by this certificate has not been registered under
the Securities Act of 1933, as amended (the "Act"), and may not be sold or
transferred in the absence of an effective registration statement under the
Act or an exemption from registration thereunder. Prior to any sale or
transfer of this certificate, except
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pursuant to an effective registration statement under the Act covering such
sale or transfer, the holder hereof shall have delivered to the issuer
hereof (the "Company") an opinion of counsel reasonably satisfactory to the
Company to the effect that such sale or transfer is exempt from
registration under the Act.
6.14 ROHDE SETTLEMENT. Buyer shall be responsible for and reimburse Seller
for the 2 1/2% commission payments arising under the Settlement Agreement and
Release of Claims dated June, 1995 between Seller and James A. Rohde and James
A. Rohde Company (the "Settlement Agreement") solely to the extent any such
commission payment relates directly to a part (as identified in the Settlement
Agreement) which is sold by the Company after the Closing ("Company Parts").
Seller agrees to indemnify and hold harmless Buyer and the Company from any
other obligation arising under the Settlement Agreement including, without
limitation, the 2 1/2% commission payments relating to those parts identified in
the Settlement Agreement which are not Company Parts.
6.15 LICENSE AND PATENTS.
(a) To the extent not assigned prior to the Closing Date, Seller shall use
best efforts to have all rights which are currently available to the Company
under the Multinational Software Product License Agreement dated June 10, 1993
between qad.inc. and Masco Industries, Inc., the Software License Agreement
dated December 12, 1994 between Trinary Systems Inc. and MascoTech, Inc., the
Progress Software User Agreement among Progress Software Corporation, Masco
Corporation, MascoTech, Inc. and Trimas Inc. and all other agreements ancillary
thereto assigned and transferred, at the Seller's expense, to the Company.
Seller shall also use best efforts to assign and transfer, at Seller's expense,
its rights to, and ownership of, the source codes relating to those customized
applications currently used by the Company that participate in the qad
Application Program System.
(b) Seller shall provide assistance to Buyer with respect to the
completion of the recordation of those patent assignments which were assigned
and filed by Seller prior to the Closing Date.
6.16 ACCOUNT COLLECTION. Buyer will use best efforts to collect each of the
items described on the Carved-Out Assets Schedule and will promptly pay such
collected amounts (net of third-party collection cost, if any, associated
therewith) to Seller. Buyer will permit Seller's representatives access during
normal business hours and at reasonable intervals to Buyer's and the Company's
representatives to review and discuss the status of such collection efforts. If
Seller so requests in writing, Buyer will assign any claim, refund, right of
recovery or right of recoupment with respect to any item set forth on the
Carved-Out Assets Schedule.
6.17 LITIGATION MATTER. With respect to item No. 1 (Fernandez-Dyson) of the
Litigation Schedule, Seller hereby assumes all loss, obligations and liabilities
arising under or relating to such litigation matter and agrees to indemnify,
defend and hold harmless Buyer and the Company from any loss, obligation or
liability arising under or relating to such litigation matter.
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<PAGE>
6.18 PLANT IMPROVEMENTS.
(a) Buyer currently expects to incur costs of approximately $750,000 with
respect to improvements or replacement of certain of the sprinkler systems at
the Company's facilities. In the event Buyer and the Company do not within one
year after the Closing Date incur in the aggregate at least $750,000 of costs,
fees and expenses relating to the improvement or replacement of such sprinkler
systems, then Buyer shall promptly pay to Seller an amount equal to 50%
multiplied by the difference of $750,000 over the amount of costs, fees and
expenses actually incurred by the Company and Buyer relating to such sprinkler
system.
(b) Seller will reimburse the Company and Buyer for all reasonable costs
and expenses arising under or related to the installation of 360 degree brake
monitors on those presses owned by the Company as of the date hereof which the
Company or Buyer shall identify by written notice to Seller. Buyer and the
Company shall provide Seller and its representatives reasonable access during
normal business hours to assist in or monitor the installation of such brake
monitor systems.
6.19 THE MASCOTECH NAME. Following the Closing, the Company will change its
name and neither the Company nor Buyer shall have any right to use the name
"MascoTech Stamping Technologies, Inc." or "MascoTech" or any variation thereof;
provided, however, that the Company may continue (after placing a sticker over
such name) to utilize any stationary, invoices, package inserts, service
manuals, training manuals, purchase orders or other clerical or similar supplies
containing such name until the stock of such supplies existing as of the Closing
Date is fully depleted.
6.20 KENDALLVILLE FACILITY ENVIRONMENTAL CONDITIONS.
(a) After the Closing Date, Buyer may conduct environmental Phase II
investigations at the Kendallville facility for the purpose of determining
whether Contamination (as defined below) exists at the facility. Such
investigations shall be conducted by a nationally recognized environmental
consulting firm retained by Buyer. The cost of such investigations shall be
borne solely by Buyer.
(b) If Buyer's investigations detect Contamination at the Kendallville
facility, Buyer shall provide Seller with a written notice of the discovery of
such Contamination ("Remediation Notice"). The Remediation Notice shall identify
the environmental consulting firm that conducted the environmental
investigations and describe the environmental investigations conducted, samples
taken, laboratory analysis performed, and the analytical results.
(c) Upon receiving the Remediation Notice, Seller shall investigate and
remediate such Contamination under the oversight of the Indiana Voluntary
Remediation Program. Ind. Code 13-7-8.9-1 et seq. ("Program"). Seller shall, at
its expense, investigate, remediate, and take such other action with respect to
the Contamination as is necessary to obtain the certificate of completion and
covenant not to sue available from IDEM pursuant to the Program.
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<PAGE>
(d) Within 60 days after receiving the Remediation Notice, Seller shall
submit a completed application to the Indiana Department of Environmental
Management ("IDEM") to enter into the Program. For purposes of the Program, the
application shall identify Seller as the applicant and Buyer as the
owner/operator. The application shall contain all analytical data that served as
the basis for the Remediation Notice together with other relevant data developed
by Seller in its investigation. Seller shall be responsible for any fees or
expenses associated with submitting the application. Upon acceptance into the
Program, Seller shall, at its sole cost and expense, expeditiously take such
actions as required by IDEM to obtain the certificate of completion and covenant
not to sue available from IDEM pursuant to such Program. Upon receipt of such
certificate of completion and covenant not to sue, any and all obligations of
Seller with respect to remediation of the Contamination shall be deemed to be
fully satisfied.
(e) Upon reasonable advance notice by Seller, Buyer shall grant Seller
reasonable access to, and entry upon, the Kendallville facility for the purpose
of investigating or remediating the Contamination and performing its obligations
otherwise agreed to herein. In investigating, remediating, or otherwise
responding to the Contamination, Seller shall not unreasonably interfere with
Buyer's operations at the Kendallville facility.
(f) Seller shall, at its expense, promptly restore as nearly as feasible
to its prior condition any property that is damaged as a result of any of any
activities relating to its investigation, remediation, or response to the
Contamination. Seller shall, at its expense and in its own name, promptly and
properly dispose of any drill cuttings, decontamination water, soil,
groundwater, waste, samples, or other material generated by the investigation,
remediation, or response to the Contamination. Buyer agrees to grant to Seller
title to any and all such materials in order to permit Seller to take the
actions described in the preceding sentence.
(g) Seller shall keep Buyer reasonably apprised of material facts and
events with respect to Seller's remediation of the Contamination. In particular,
Seller shall: (i) provide Buyer with reasonable advance notice regarding any
meetings between Seller and IDEM or any other governmental agency regarding this
matter and allow Buyer to attend, at Buyer's expense, such meetings; (ii)
provide Buyer with copies of letters and notices it receives from IDEM or any
other governmental agency regarding this matter; and (iii) provide Buyer with
drafts of any material submittals to IDEM or any other governmental agency
regarding this matter, including reports, analytical data, letters, or other
documents, allow Buyer to comment on such draft submittals, reasonably address
such comments, and provide Buyer with copies of the final submittals.
(h) Buyer and Seller agree to reasonably cooperate with one another
regarding the investigation and remediation of the Contamination and agree that
any activity conducted by either party in connection therewith shall be
undertaken promptly, conducted in compliance with law, and concluded
expeditiously.
As used in this section "Contamination" means the presence of any
"Hazardous Substance," as defined in Ind. Code 13-7-8.9-2, or "Petroleum," as
defined in Ind. Code 13-7-8.9-3,
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at concentrations exceeding cleanup goals or other applicable action levels
established by IDEM pursuant to applicable Environmental and Safety
Requirements.
ARTICLE VII
MISCELLANEOUS
-------------
7.1 AMENDMENT AND WAIVER. This Agreement may be amended and any provision
of this Agreement may be waived, provided that any such amendment or waiver will
be binding upon a party only if such amendment or waiver is set forth in a
writing executed by Buyer and Seller. No course of dealing between or among any
Persons having any interest in this Agreement will be deemed effective to
modify, amend or discharge any part of this Agreement or any rights or
obligations of any party under or by reason of this Agreement.
7.2 NOTICES. All notices, demands and other communications given or
delivered under this Agreement will be in writing and will be deemed to have
been given when personally delivered, mailed by first class mail, return receipt
requested, delivered by express courier service or telecopied. Notices, demands
and communications to the Company, Seller and Buyer will, unless another address
is specified in writing, be sent to the address or telecopy number indicated
below:
Notices to Seller (and, prior to the Closing, the Company):
MascoTech, Inc.
21001 Van Born Road
Taylor, MI 48180
Attention: President
Telecopy: (313) 374-6430
with a copy to:
MascoTech, Inc.
21001 Van Born Road
Taylor, MI 48180
Attention: General Counsel
Telecopy: (313) 374-6430
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Notices to Buyer (and after the Closing, the Company):
R.J. Tower Corporation
c/o Hidden Creek Industries
4508 IDS Center
Minneapolis, MN 55402
Attention: Scott D. Rued
Telecopy: (612) 332-2012
with a copy to:
Tower Automotive, Inc.
6303 28th Street, S.E.
Grand Rapids, MI 49546
Attention: Anthony A. Barone
Telecopy: (616) 954-7554
and an additional copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Jeffrey C. Hammes
John A. Schoenfeld
Telecopy: (312) 861-2200
7.3 BINDING AGREEMENT; ASSIGNMENT.
(a) This Agreement and all of the provisions hereof will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns; provided that neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by Seller without the
prior written consent of Buyer (except to a successor of Seller) or by Buyer
(except as otherwise provided in this Agreement) without the prior written
consent of Seller. Without limiting the generality of the foregoing:
(i) Buyer may (at any time prior to the Closing), at its sole
discretion, assign, in whole or in part, its rights and obligations
pursuant to this Agreement to one or more of its wholly owned Subsidiaries.
Buyer's Subsidiaries include Subsidiaries which may be organized subsequent
to the date hereof; and
(ii) Buyer may assign its rights under this Agreement for collateral
security purposes to any lenders providing financing to Buyer, the Company
or any of their affiliates.
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7.4 SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Agreement.
7.5 NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any Person.
7.6 CAPTIONS. The captions used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and will not be
deemed to limit, characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement will be enforced and construed
as if no caption had been used in this Agreement.
7.7 ENTIRE AGREEMENT. This Agreement and the documents referred to herein
contain the entire agreement between the parties and supersede any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related to the subject matter hereof in any way.
7.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which taken
together will constitute one and the same instrument.
7.9 GOVERNING LAW. ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS AND
SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF MICHIGAN, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF MICHIGAN OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF MICHIGAN.
7.10 PARTIES IN INTEREST. Nothing in this Agreement, express or implied, is
intended to confer on any Person other than the parties and their respective
successors and assigns any rights or remedies under or by virtue of this
Agreement.
7.11 KNOWLEDGE. As applied to the Company in this Agreement, the terms
"knowledge" or "aware" shall mean and include the actual knowledge or awareness
of the Company or Seller, as applicable (which shall include the actual
knowledge and awareness of the officers, directors and senior employees of the
Company (excluding the plant manager of the Kendallville plant) or those
employees of Seller involved in the negotiation of this Agreement, as
applicable.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
R. J. TOWER CORPORATION
By: /s/ Anthony A. Barone
-------------------------------
Its: Chief Financial Officer
-------------------------------
TOWER AUTOMOTIVE, INC.
By: /s/ Anthony A. Barone
-------------------------------
Its: Chief Financial Officer
-------------------------------
MASCOTECH, INC.
By: /s/ Timothy Wadhams
-------------------------------
Its: Vice President
-------------------------------
<PAGE>
LIST OF EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Warrant
Exhibit C - Form of Opinion of Buyer's Counsel
Exhibit D - Form of Opinion of Seller's Counsel
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LIST OF SCHEDULES
Schedule 1.1 - Stock Ownership Schedule
Schedule 1.3(a) - Carved-Out Assets Schedule
Schedule 1.4(d) - Plant Profits Adjustments Schedule
Schedule 2.1 - Qualifications Schedule
Schedule 2.5 - Restrictions Schedule
Schedule 2.6 - Financial Statements Schedule
Schedule 2.8 - Developments Schedule
Schedule 2.9(a) - Real Property Schedule
Schedule 2.9(c) - Personal Property Schedule
Schedule 2.9(d) - Leases Schedule
Schedule 2.9(e) - Occupancy Schedule
Schedule 2.9(f) - Improvements Schedule
Schedule 2.10 - Accounts Receivable Schedule
Schedule 2.11 - Inventory Schedule
Schedule 2.12 - Taxes Schedule
Schedule 2.13 - Contracts Schedule
Schedule 2.14 - Proprietary Rights Schedule
Schedule 2.15 - Litigation Schedule
Schedule 2.17(a) - Licenses Schedule
Schedule 2.17(b) - Governmental Consent Schedule
Schedule 2.18 - Employee Benefit Plans Schedule
Schedule 2.19 - Insurance Schedule
Schedule 2.20 - Officers and Directors Schedule
Schedule 2.21 - Affiliate Transactions Schedule
Schedule 2.22 - Compliance Schedule
Schedule 2.23(a) - Environmental Requirements Schedule
Schedule 2.23(b) - Environmental Permits Schedule
Schedule 2.23(c) - Environmental Claims Schedule
Schedule 2.23(d) - Environmental Disclosure Schedule
Schedule 2.23(e) - Hazardous Substances Schedule
Schedule 2.25 - Employees Schedule
Schedule 2.26 - Powers Schedule
Schedule 2.27 - Products Schedule
Schedule 2.28 - Ford LTA Schedule
Schedule 5.2(a) - Known Environmental Matters Schedule
Schedule 6.2 - Employee Benefit Matters Schedule
Schedule 6.2(g) - Retirees Schedule
Schedule 6.7 - Transition Services Schedule
Schedule 6.7(d) - Company Services Schedule
Schedule 6.13 - Operating Leases Schedule
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EXHIBIT 4.12
================================================================================
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
DATED AS OF MAY 31, 1996
AMONG
COMERICA BANK
COLLATERAL AGENT
COMERICA BANK,
BANK OF AMERICA ILLINOIS,
AND
FIRST BANK NATIONAL ASSOCIATION
INITIAL LENDERS
AND
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA,
JEFFERSON-PILOT LIFE INSURANCE COMPANY,
ALEXANDER HAMILTON LIFE INSURANCE COMPANY OF AMERICA,
NORTHERN LIFE INSURANCE COMPANY,
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
AND
BANKERS SECURITY LIFE INSURANCE SOCIETY
Initial Noteholders
RE:
R.J. Tower Corporation
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Heading Page
<S> <C>
Parties........................................................................... 1
Recitals.......................................................................... 1
Section 1. Defined Terms....................................................... 2
Section 2. Appointment of Collateral Agent..................................... 9
Section 3. Decisions Relating to Administration and Exercise of Remedies
Vested in the Majority Benefited Parties............................ 9
Section 4. Sharing of Recoveries under Subsidiary Guaranties.................. 12
Section 5. Application of Proceeds............................................ 13
Section 6. Preferential Payments and Special Trust Account.................... 14
Section 7. Information........................................................ 15
Section 8. Additional Parties................................................. 16
Section 9. Disclaimers, Indemnity, Etc........................................ 17
Section 10. Invalidated Payments............................................... 20
Section 11. Miscellaneous...................................................... 21
Signature Page................................................................... 26
Schedule I -- List of Original Bank Security Documents and Bank Guaranties
Exhibit A-1 -- Form of Acknowledgment for Successor Lenders
Exhibit A-2 -- Form of Acknowledgment for Successor Noteholders
</TABLE>
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INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
This Intercreditor and Collateral Agency Agreement (as amended, restated or
otherwise modified from time to time in accordance with the terms hereof, this
"Agreement") is dated as of May 31, 1996 and entered into among the Noteholders
(as hereinafter defined), the Credit Agent (as hereinafter defined) and Comerica
Bank ("Comerica"), as the Collateral Agent (as hereinafter defined). This
Agreement is consented to by R.J. Tower Corporation, a Michigan corporation (the
"Company"), Tower Automotive, Inc., a Delaware corporation ("Tower Automotive"),
and the Subsidiary Guarantors (as hereinafter defined) by their execution of the
acknowledgment hereto.
RECITALS
Whereas, the Company, Comerica Bank, Bank of America Illinois and First
Bank National Association (the "Initial Lenders", and together with any
Successor Lenders (as hereinafter defined) party thereto from time to time, the
"Lenders"), and Comerica Bank, as Agent (the "Credit Agent"), have heretofore
entered into the Third Amended and Restated Credit Agreement dated as of January
16, 1996, as amended pursuant to the First Amendment to Third Amended and
Restated Credit Agreement dated as of May 31, 1996 (said agreement, as it may
hereafter be amended, restated or otherwise modified from time to time, the
"Existing Credit Agreement", and together with any Successor Credit Agreement,
as hereinafter defined, the "Credit Agreement").
Whereas, pursuant to the Existing Credit Agreement, the Lenders have agreed
to make certain revolving, swing line and term loans to the Company and to issue
certain Letters of Credit (as hereinafter defined).
Whereas, pursuant to the Bank Guaranties, each of the Subsidiary Guarantors
(as hereinafter defined) has agreed to guaranty all of the Company's obligations
to the Lenders and the Credit Agent under or in respect of the Existing Credit
Agreement and the other Loan Documents (as such term is defined in the Existing
Credit Agreement) and in respect of the Letters of Credit.
Whereas, pursuant to the Existing Security Documents (as hereinafter
defined), the Company, Tower Automotive and the Subsidiary Guarantors have
granted to the Credit Agent, for the ratable benefit of the Lenders and the
Credit Agent, security interests in the collateral therein described, to secure
the obligations of the Company and/or their respective obligations to the
Lenders and the Credit Agent under the Existing Credit Agreement, the Bank
Guaranties and the other Loan Documents and in respect of the Letters of Credit.
Whereas, the Company has entered into the separate Note Agreements (as
amended, restated or otherwise modified from time to time, the "Note
Agreements") dated as of May 31, 1996 with Teachers Insurance and Annuity
Association of America, Jefferson-Pilot Life Insurance Company, Alexander
Hamilton Life Insurance Company of America, Northern Life Insurance Company,
Northwestern National Life Insurance Company and Bankers Security Life Insurance
Society (the "Initial Noteholders", and together with any subsequent holders of
any
<PAGE>
Senior Note from time to time, the "Noteholders"), pursuant to which the
Initial Noteholders have agreed to purchase the Company's (i) $40,000,000 7.65%
Senior Secured Notes, Series A, due June 1, 2006 and (ii) $25,000,000 7.82%
Senior Secured Notes, Series B, due June 1, 2008 (collectively, the "Senior
Notes").
Whereas, it is a condition precedent to the purchase of the Senior Notes by
the Noteholders under the Note Agreements that the Subsidiary Guarantors shall
guaranty all of the Company's obligations to the Noteholders under or in respect
of the Note Agreements, the Senior Notes and all documents executed in
connection therewith.
Whereas, it is a further condition precedent to the purchase of the Senior
Notes by the Noteholders under the Note Agreements that the Existing Security
Documents be amended to include the obligations of the Company under the Note
Agreements and the Senior Notes and the obligations of the Subsidiary Guarantors
under the Noteholders' Guaranties (as hereinafter defined) as secured
obligations thereunder (the Existing Security Documents, as so amended or
modified, and as the same may hereafter be amended, restated or otherwise
modified from time to time, the "Security Documents").
Whereas, further to the foregoing, the Credit Agent, the Lenders and the
Noteholders (individually a "Party" and collectively the "Parties") have agreed
that the Credit Obligations (as hereinafter defined) and the Senior Note
Obligations (as hereinafter defined) shall be secured pari passu pursuant to the
Security Documents and supported on an equal and ratable basis by the Subsidiary
Guaranties (as hereinafter defined); the Parties desire that Comerica shall be
the Collateral Agent to act on behalf of all Parties regarding the Collateral,
all as more fully provided herein; and the Parties have entered into this
Agreement to, among other things, further define the rights, duties, authority
and responsibilities of the Collateral Agent and the relationship between the
Parties regarding their pari passu interests in the Collateral and the sharing
of amounts recovered under any Subsidiary Guaranty.
Whereas, it is contemplated that the Lenders or other financial
institutions (the "Successor Lenders") may enter into one or more agreements
with the Company either extending the maturity of or refinancing all or any
portion of the Credit Obligations.
Whereas, it is contemplated that the Noteholders or other financial
institutions (the "Successor Noteholders") may enter into one or more agreements
with the Company either extending the maturity of or refinancing all or any
portion of the Senior Note Obligations.
Now, therefore, in consideration of the premises and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the Parties hereto hereby agree as follows:
SECTION 1. DEFINED TERMS .
As used in this Agreement, and unless the context requires a different
meaning, capitalized terms not otherwise defined herein have the respective
meanings provided for such
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terms in the Note Agreements and the following terms have the meanings indicated
below, all such definitions to be equally applicable to the singular and plural
forms of the terms defined:
"Affiliate", as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agreement" has the meaning ascribed to that term in the introductory
paragraph hereto.
"Bank Documents" means the Credit Agreement, the Credit Notes, the Bank
Guaranties, the Letters of Credit and any other collateral document given to the
Lenders, the Credit Agent or the Collateral Agent.
"Bank Guaranties" means each of the existing guaranty agreements executed
and delivered in favor of the Lenders, the Credit Agent or the Collateral Agent
and listed on Schedule I hereto, and any subsequent guaranty executed and
delivered by a Subsidiary under and in accordance with the terms of the Credit
Agreement.
"Bankruptcy Proceeding" means, with respect to any Person, a general
assignment by such Person for the benefit of its creditors, or the institution
by or against such Person of any proceeding seeking relief as debtor, or seeking
to adjudicate such Person as bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of such Person or its debts, under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for such Person or for any substantial part of its property.
"Benefited Obligations" means (a) all Credit Obligations, (b) all Senior
Note Obligations, (c) the outstanding Letter of Credit Usage, (d) all Hedging
Exposure, and (e) all other amounts payable by any Grantors under this Agreement
and the Security Documents (including, without limitation, the reasonable fees
and expenses of the Collateral Agent).
"Benefited Parties" means the holders, from time to time, of the Benefited
Obligations.
"Break Costs" means all actual costs, losses and expenses incurred by a
Lender in connection with a payment or prepayment of a Eurodollar-based Advance
(as defined in the Credit Agreement), in whole or in part, on a date which is
not an interest payment date.
"Code" means the Uniform Commercial Code as the same may from time to time
be in effect in the State of Michigan.
"Collateral" means all property and interests in property of the Grantors
in which a Lien has been created under the Security Documents.
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<PAGE>
"Collateral Agent" means Comerica in its capacity as collateral agent
hereunder and any successor collateral agent appointed pursuant to (S)9 hereof.
"Comerica" has the meaning ascribed to that term in the introductory
paragraph hereto.
"Company" has the meaning ascribed to that term in the introductory
paragraph hereto.
"Credit Agent" has the meaning ascribed to that term in the recitals
hereto.
"Credit Agreement" has the meaning ascribed to that term in the recitals
hereto.
"Credit Notes" means the outstanding promissory notes issued by the Company
or any other borrower under the Credit Agreement.
"Credit Obligations" means all outstanding and unpaid obligations of every
nature of the Company from time to time to the Credit Agent or the Lenders or
any of them under the Credit Agreement, the Credit Notes and any other Bank
Documents, including the aggregate undrawn portion of outstanding Letters of
Credit.
"Directing Party" means, with respect to any particular instruction given
to the Collateral Agent, each Party (and each Benefited Party represented by
such Party) that has given such instruction to the Collateral Agent.
"Enforcement" means the commencement of enforcement, collection (including
judicial or non-judicial foreclosure) or similar proceedings with respect to the
Collateral.
"Event of Default" means an "Event of Default" or "Default" as defined in
any Financing Agreement.
"Existing Credit Agreement" shall mean the Third Amended and Restated
Credit Agreement dated as of January 16, 1996 among the Company, the Lenders and
the Credit Agent.
"Existing Fees and Charges" means any fees, indemnities or other expenses
the payment of which is required by the Existing Credit Agreement or the
Existing Note Agreements.
"Existing Note Agreements" means the Note Agreements as in effect on the
Closing Date.
"Existing Security Documents" means and includes each of the security
agreements, mortgages, assignments of collateral and other instruments listed on
Schedule I hereto.
"Financing Agreements" means the Bank Documents, the Noteholder Documents,
this Agreement, the Security Documents, and any other instruments, documents or
agreements entered into in connection with any Benefited Obligation or Financing
Agreement.
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<PAGE>
"Grantors" means the Company, Tower Automotive, the Subsidiary Guarantors
and any other Person who grants any Collateral to the Collateral Agent under any
Security Document.
"Hedging Exposure" means, on any date of determination for any Hedging
Transaction, the amount, as calculated in good faith and in a commercially
reasonable manner by the Lender (including, in the case of Bank of America
Illinois, Bank of America National Trust & Savings Association) that is the
Company's counterpart for such Hedging Transaction, which such Lender would pay
to a third party (such amount being expressed as a negative number) or receive
from a third party (such amount being expressed as a positive number) in an
arm's-length transaction as consideration for the third party's entering into a
new transaction with such Lender in which: (a) such Lender holds the same
position in the Hedging Transaction as it currently holds; (b) the third party
holds the same position as the Company currently holds; and (c) the new
transaction has economic and other terms and conditions identical in all
respects to such Hedging Transaction except that (i) the date of calculation
shall be deemed to be the date of commencement of the new transaction and
(ii) all period end dates shall correspond to all period end dates, if any, for
such Hedging Transaction.
"Hedging Transaction" means each interest rate swap transaction, basis swap
transaction, forward rate transaction, commodity swap transaction, equity
transaction, equity index transaction, foreign exchange transaction, cap
transaction, floor transaction (including any option with respect to any of
these transactions and any combination of any of the foregoing) entered into by
the Company from time to time pursuant to an Interest Rate Protection Agreement;
provided that such transaction is entered into for risk management purposes and
not for speculative purposes.
"Interest Rate Protection Agreement" means any interest rate swap, cap,
floor, collar, forward rate agreement, or other rate protection transaction, or
any combination of such transaction or agreements or any option with respect to
any such transactions or agreements now existing or hereafter entered into
between Company and any Lender.
"Lenders" has the meaning ascribed to that term in the recitals hereto.
"Letters of Credit" shall mean the standby letters of credit and the
commercial letters of credit issued pursuant to the Credit Agreement.
"Letters of Credit Usage" shall mean, as at any date of determination, the
sum of (i) the Maximum Available Amount plus (ii) the aggregate amount of all
drawings under the Letters of Credit honored by any Lender and not theretofore
reimbursed by the Company.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any
security interest).
"Majority Benefited Parties" means (a) the "Majority Banks" under the
Credit Agreement, and (b) Noteholders holding (or representing) at least 51% of
the outstanding principal amount of the Senior Notes, each voting as a class,
provided that if at any time the aggregate outstanding
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<PAGE>
principal amount of the indebtedness evidenced by the Credit Notes and the
Letter of Credit Usage or the aggregate outstanding principal amount of the
Senior Notes represents less than 10% of the sum of the aggregate outstanding
principal amount of the indebtedness evidenced by the Benefited Obligations,
then "Majority Benefited Parties" shall mean Benefited Parties, considered as a
single class, holding more than 51% of the Benefited Obligations; provided,
further, that for purposes of calculation of the Benefited Obligations prior to
the termination of the Revolving Credit Aggregate Commitment, the outstanding
principal amount of the Credit Notes shall be deemed to include the full amount
(whether or not advanced and outstanding) of the Revolving Credit Aggregate
Commitment.
"Maximum Available Amount" shall mean, as of any date of determination, the
amount that may be drawn under the Letters of Credit (whether or not the
beneficiary thereof shall have presented, or shall be entitled at such time to
present, the drafts or other documents required to draw under the Letters of
Credit).
"New Fees and Charges" means (i) any fees, indemnities or other expenses
the payment of which is not required by the Existing Credit Agreement or the
Existing Note Agreements or (ii) any increase in the amount of such fees,
indemnities or other expenses over the amount of Existing Fees and Charges.
"Non-Directing Party" means, with respect to any particular instruction
given to the Collateral Agent, each Party (and each Benefited Party represented
by such Party) that has not given or agreed with such instruction given to the
Collateral Agent.
"Note Agreements" has the meaning ascribed to that term in the recitals
hereto.
"Note Premium Obligations" means all obligations of the Company to pay a
"Make Whole Amount" (as defined in (S)8.1 of the Note Agreements) to the
Noteholders.
"Noteholder Documents" means (i) the Note Agreements; (ii) the Senior
Notes; and (iii) the Noteholders' Guaranties.
"Noteholders" has the meaning ascribed to that term in the recitals hereto.
"Noteholders' Guaranties" means each of the guaranty agreements executed
and delivered in favor of the Noteholders or the Collateral Agent and listed on
Schedule I hereto, and any subsequent guaranty executed and delivered by a
Subsidiary under and in accordance with the terms of the Note Agreements.
"Opinion of Counsel" means a written opinion of an attorney or firm of
attorneys which is not in the employ of the Person requesting such opinion or
any affiliate of such Person but which may be outside counsel engaged or
retained by such Person, in form and substance reasonably satisfactory to the
Majority Benefited Parties, a copy of which opinion is furnished to each
Benefited Party.
"Party" has the meaning ascribed to that term in the recitals hereto.
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<PAGE>
"Person" means any individual, corporation, partnership, trust or other
entity.
"Preferential Payment" means any payments or Proceeds from the Company, any
Subsidiary Guarantor or any other source with respect to the Benefited
Obligations (including from the exercise of any set-off) which are:
(i) received by a Benefited Party within 90 days prior to the
commencement of a Bankruptcy Proceeding with respect to the Company, or the
acceleration of the Senior Notes or the Credit Notes, and which payment
reduces the amount of the Benefited Obligations owed to such Benefited
Party below the amount owed to such Benefited Party as of the 90th day
prior to such occurrence, or
(ii) received by a Benefited Party (A) within 90 days prior to the
occurrence of any Event of Default (other than an Event of Default arising
as a result of the commencement of a Bankruptcy Proceeding) which has not
been waived or cured within 45 days after the occurrence thereof and which
payment reduces the amount of the Benefited Obligations owed to such
Benefited Party below the amount owed to such Benefited Party as of the
90th day prior to the occurrence of such Event of Default or (B) within
45 days after the occurrence of such Event of Default, or
(iii) received by a Benefited Party after the occurrence of a
Special Event of Default except as provided in (S)6(B).
"Proceeds" has the meaning assigned to it under the Code and, in any event,
includes, but is not limited to, (a) any and all proceeds of any collection,
sale or other disposition of the Collateral, (b) any and all amounts from time
to time paid or payable under or in connection with any of the Collateral and
(c) amounts collected by the Credit Agent or any Lender by way of set-off,
deduction or counterclaim.
"Revolving Credit Aggregate Commitment" has the meaning ascribed to that
term in the Credit Agreement.
"Required Lenders" means those Lenders having aggregate percentages of the
revolving loan commitments and term loan commitments under the Credit Agreement
entitled to direct the Credit Agent to act or refrain from acting in its
capacity as agent under the Credit Agreement.
"Required Noteholders" means, with respect to any particular Event of
Default, the percentage of Noteholders required to accelerate the maturity of
the Notes as a result of such Event of Default under the provisions of the Note
Agreements.
"Security Documents" has the meaning ascribed to that term in the recitals
hereto and includes any other agreements pursuant to which any Grantor grants to
the Collateral Agent, for the benefit of the Benefited Parties, a Lien on any of
its properties.
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<PAGE>
"Senior Debt" means debt for borrowed money, other than the Senior Notes
and the Credit Agreement, which is not subordinated in right of payment to any
other obligation of the Company.
"Senior Note Obligations" means all outstanding and unpaid obligations of
every nature of the Company from time to time to the Noteholders under the
Noteholder Documents, including, without limitation, the Note Premium
Obligations and all fees, collection costs and other expenses otherwise accruing
under the Noteholder Documents.
"Senior Notes" has the meaning ascribed to that term in the recitals
hereto.
"Special Event of Default" means (i) the commencement of a Bankruptcy
Proceeding with respect to the Company, (ii) any other Event of Default which
has not been waived or cured within 45 days after the occurrence thereof, or
(iii) the acceleration of the Senior Notes or the Credit Notes.
"Special Trust Account" means that certain interest bearing trust account
maintained by the Collateral Agent for the purpose of receiving and holding
Preferential Payments.
"Subsidiary Guaranties" means the Bank Guaranties, the Noteholders'
Guaranties and any other guaranty pursuant to which any Subsidiary Guarantor
grants to the any Lender or Noteholder a guaranty in support of the Credit
Obligations or the Senior Note Obligations.
"Subsidiary Guarantors" shall mean (a) R. J. Tower Corp., an Indiana
corporation, (b) R. J. Tower Corp., a Kentucky corporation, (c) Edgewood Tool
and Manufacturing Company, a Delaware corporation, (d) Kalamazoo Stamping and
Die Company, a Michigan corporation, (e) Trylon Corporation, a Michigan
corporation, (f) MascoTech Stamping Technologies, Inc., a Delaware corporation,
and (g) each other Subsidiary that from time to time executes and delivers a
Guaranty in favor of the Lenders or the Noteholders.
"Successor Credit Agreement" means any replacement, refinancing or
restructuring of the Existing Credit Agreement; provided that each Successor
Lender thereunder or an agent acting on behalf of all such Successor Lenders has
executed an acknowledgment to this Agreement in the form attached hereto as
Exhibit A-1.
"Successor Lenders" has the meaning ascribed to that term in the recitals
hereto.
"Successor Note Agreements" means any replacement, refinancing or
restructuring of the Existing Note Agreements; provided that each Successor
Lender thereunder or an agent acting on behalf of all such Successor Lenders has
executed an acknowledgment to this Agreement in the form attached hereto as
Exhibit A-2.
"Successor Noteholders" has the meaning ascribed to that term in the
recitals hereto.
"Tower Automotive" has the meaning ascribed to that term in the
introductory paragraph hereto.
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SECTION 2. APPOINTMENT OF COLLATERAL AGENT .
(a) Each of the Lenders and each Noteholder hereby designates and
appoints Comerica to serve as the Collateral Agent under this Agreement, and
each of the Lenders affirms its designation and appointment, and each Noteholder
hereby designates and appoints, Comerica as Collateral Agent under the Security
Documents. Each of the Lenders and each Noteholder hereby authorizes the
Collateral Agent to act as agent for the Benefited Parties for the purposes of
executing and delivering on behalf of the Benefited Parties the Security
Documents and, subject to the provisions of this Agreement, enforcing the
Benefited Parties' rights in respect of the Collateral, the obligations of the
Grantors under the Security Documents and the obligations of the Subsidiary
Guarantors under the Subsidiary Guaranties.
(b) Each of the Lenders and each Noteholder hereby designated and
appoints Comerica to serve as agent for the purposes of perfecting the security
interest in assets which, in accordance with Article 9 of the Uniform Commercial
Code, can be perfected by possession only, including without limitation the
shares of stock of any Subsidiary pledged pursuant to any Security Document, and
the Collateral Agent hereby acknowledges that it shall hold any such Collateral,
including any such shares of stock of any Subsidiary, for the ratable benefit of
all Benefited Parties.
SECTION 3. DECISIONS RELATING TO ADMINISTRATION AND EXERCISE OF REMEDIES
VESTED IN THE MAJORITY BENEFITED PARTIES.
(a) The Lenders and the Noteholders agree among themselves and for their
own benefit alone that the Liens and security interests granted and provided for
in the Security Documents shall not be enforced as against any of the Collateral
unless permitted by the terms of such Security Documents and then only at the
direction of the Majority Benefited Parties upon the occurrence of one or more
Events of Default and in compliance with the provisions hereof. Each Benefited
Party agrees that, as long as any Benefited Obligations exist or may become
outstanding pursuant to the terms of the Financing Agreements, the provisions of
this Agreement shall provide the exclusive method by which any Benefited Party
may exercise rights and remedies under the Security Documents.
(b) Upon the occurrence of any Event of Default and the Collateral
Agent's receipt of notice thereof, the Collateral Agent, with the consent of the
Majority Benefited Parties may or at the direction of the Majority Benefited
Parties, shall seek to realize upon the security interests and Liens granted
under the Security Documents to the Collateral Agent in such manner as shall be
directed by the Majority Benefited Parties, provided that any act of Enforcement
relating to the foreclosure of any mortgage of real property shall require the
direction of (1) the "Majority Banks" under the Credit Agreement, and
(2) Noteholders holding (or representing) at least 51% of the outstanding
principal amount of the Senior Notes, each voting as a class.
(c) Except as set forth in (S)3(J), the Collateral Agent agrees that it
will not release Liens or Collateral or commence Enforcement without the
direction or the consent of the Majority Benefited Parties. The Collateral
Agent agrees to administer the Security Documents and the Collateral and to make
such demands and give such notices under the Security
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Documents as the Majority Benefited Parties may request, and to take such action
to enforce the Security Documents and to realize upon, collect and dispose of
the Collateral or any portion thereof as may be directed by the Majority
Benefited Parties.
(d) Notwithstanding anything herein to the contrary, the Collateral Agent
shall not be required to take any action that is in the Opinion of Counsel
(which opinion shall not, for purposes of this (S)3(D), be subject to the
approval of the Majority Benefited Parties) contrary to law or to the terms of
this Agreement or the Security Documents, or that would in such Opinion of
Counsel subject it or any of its officers, employees, agents or directors to
liability. The Collateral Agent shall advise the Benefited Parties in writing
within 3 business days of any decision not to act pursuant to the immediately
preceding sentence and include therewith a copy of such Opinion of Counsel.
(e) Each Party agrees that the Collateral Agent shall act as the Majority
Benefited Parties may request (regardless of whether any individual Party or
Benefited Party agrees, disagrees or abstains with respect to such request),
that the Collateral Agent shall have no liability for acting in accordance with
such request (provided such action does not conflict with the express terms of
this Agreement or the Security Documents) and that no Directing Party or Non-
Directing Party shall have any liability to any Non-Directing Party or Directing
Party, respectively, for any such request. The Collateral Agent shall give
prompt notice to the Non-Directing Parties of action taken pursuant to the
instructions of the Majority Benefited Parties to enforce any Security Document;
provided, however, that the failure to give any such notice shall not impair the
right of the Collateral Agent to take any such action or the validity or
enforceability under this Agreement of the action so taken. Notwithstanding
anything herein to the contrary, the Majority Benefited Parties shall agree to
release the Collateral from the security interests granted for the benefit of
any Non-Directing Party only if the Collateral Agent is concurrently releasing
the security interest granted with respect to such Collateral for all Benefited
Parties having a security interest in such Collateral.
(f) Each Party agrees that the only right of a Non-Directing Party under
the Security Documents is for Benefited Obligations held by such Non-Directing
Party to be secured by the Collateral for the period and to the extent provided
therein and in this Agreement and to receive a share of the proceeds of
enforcement of the Security Documents, if any, to the extent and at the time
provided in the respective Security Documents and in this Agreement.
(g) The Collateral Agent may at any time request directions from the
Majority Benefited Parties as to any course of action or other matter relating
hereto or relating to any Security Document. Except as otherwise provided in
this Agreement or the Security Documents, directions given by the Majority
Benefited Parties to the Collateral Agent hereunder shall be binding on all
Benefited Parties, including all Non-Directing Parties, for all purposes.
(h) Nothing contained in this Agreement shall affect the rights of any
Party to give the Company or any other Grantor notice of any default, accelerate
or make demand for payment of their respective Benefited Obligations under the
Financing Agreements. If a Party (upon authorization or with the consent of the
Majority Benefited Parties) instructs the Collateral Agent to take any action,
commence any proceedings or otherwise proceed against the Collateral or enforce
any Security Document, and such action or proceedings are or may be defective
without
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the joinder of other Parties as parties, then all other Parties shall
join in such actions or proceedings. Each Party agrees not to take any action
to enforce any term or provision of the Security Documents or to enforce any of
its rights in respect of the Collateral except through the Collateral Agent in
accordance with this Agreement.
(i) If the Collateral Agent has been notified in writing that an Event of
Default has occurred, the Collateral Agent shall notify the Benefited Parties
and may notify the Company of such determination. Any Benefited Party which has
actual knowledge of an Event of Default, or facts which indicate that an Event
of Default has occurred, shall deliver to the Collateral Agent a written
statement describing such Event of Default or facts. Failure to do so, however,
does not constitute a waiver of such Event of Default by the Benefited Parties.
Upon receipt of a notice from a Benefited Party of the occurrence of an Event of
Default, the Collateral Agent shall promptly (and in any event no later than
three business days after receipt of such notice in the manner provided in
(S)11(A) hereof) give notice of such Event of Default to all Benefited Parties.
(j) Unless an Event of Default has occurred and is continuing, the
Collateral Agent may, without the approval of the Benefited Parties as required
herein, release any Collateral under the Security Documents which is permitted
to be sold or disposed of by the Company or any Grantor pursuant to the Security
Documents, Credit Agreement and the Note Agreements and execute and deliver such
releases as may be necessary to terminate of record the Benefited Parties'
security interest in such Collateral. In determining whether any such release
is permitted, the Collateral Agent may rely upon instructions from the Majority
Benefited Parties.
(k) At any time when an Event of Default shall have occurred and be
continuing, the Company will not, directly or indirectly, pay or permit to be
paid to any Benefited Party, and the Benefited Parties will not accept, any
remuneration, whether by way of supplemental or additional interest, fees (other
than fees and expenses of counsels, other professionals, Collateral Agent and
others in connection with curing or waiving the Event of Default or amending any
Financing Agreements in connection therewith) or otherwise, as consideration for
or as inducement to the entering into of any amendment, supplement, waiver or
consent with respect to any Financing Agreements or any Security Document unless
such remuneration is concurrently therewith paid, on the same terms, ratably to
all Benefited Parties.
(l) At no time in the future will any security interest, mortgage or
other lien be created by the Company or any of its Subsidiaries or Affiliates in
favor of, or guaranties by the Company or any of its Subsidiaries or Affiliates
be granted for the benefit of, any holder of the Benefited Obligations, unless
(x) in the case of the creation of any security interest, mortgage or other
lien, all other Benefited Obligations are secured equally and ratably with the
Benefited Obligations secured thereby on the same basis as is provided in the
Security Documents and this Agreement or (y) in the case of the giving of any
such guaranty, all other Benefited Obligations shall have the benefits of
substantially similar guaranties given by the same guarantor or guarantors. In
the event any such security interest, mortgage, lien or guaranty is given in
violation of the foregoing, the Proceeds received by the Benefited Party in
whose favor such security interest, mortgage, lien or guaranty has been granted
shall be held in trust by such Benefited Party for the benefit of all Benefited
Parties and applied to the Benefited Obligations in the manner provided in (S)5.
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SECTION 4. SHARING OF RECOVERIES UNDER SUBSIDIARY GUARANTIES .
(a) Any and all amounts at any time recovered by any Benefited Party from
any Subsidiary Guarantor as a result of the enforcement by such Benefited Party
of its rights and remedies under the Bank Guaranties or the Noteholders'
Guaranties, as the case may be, following the occurrence and during the
continuance of an Event of Default of which notice has been given to the
Collateral Agent shall be shared by the Benefited Parties and allocated to the
Benefited Obligations in accordance with the provisions of (S)5 in the manner
specified in (S)4(B) below.
(b) In the event that any Benefited Party shall obtain any payment or
reduction of any Benefited Obligation as a result of the enforcement of the Bank
Guaranties or the Noteholders' Guaranties in excess of its ratable share
obtained by all of the Benefited Parties as set forth in subsection (a) above,
such Benefited Party shall forthwith (1) notify each other Benefited Party and
the Collateral Agent of such receipt and (2) enter into a mutually acceptable
arrangement with the other Benefited Parties as shall be necessary to cause such
receiving Benefited Party to share the excess payment or reduction, net of costs
incurred in connection therewith, ratably with each of them in accordance with
subsection (a) above, provided that if all or any portion of such excess payment
or reduction is thereafter recovered from such receiving Benefited Party, the
arrangement shall be rescinded and any amounts paid to the other Benefited
Parties by the receiving Benefited Party shall be restored to the extent of such
recovery. All arrangements pursuant to this Section 4(b) shall be coordinated
by and effected at the direction of the Collateral Agent.
SECTION 5. APPLICATION OF PROCEEDS.
(a) Any and all Proceeds received by the Collateral Agent in connection
with an Enforcement, and the proceeds and avails of any right or remedy under
the Subsidiary Guaranties and the Security Documents, and any Preferential
Payments required to be paid to all Benefited Parties in accordance with the
provisions of (S)6, shall be applied promptly by the Collateral Agent, as
follows:
First: To the payment of the reasonable costs and expenses of such
sale, collection or other realization, including fees and expenses of
counsel, and all reasonable expenses, liabilities and advances made or
incurred by the Collateral Agent in connection therewith;
Second: To the ratable payment of the Benefited Obligations to
Benefited Parties (other than Existing Fees and Charges, New Fees and
Charges, Note Premium Obligations and Break Costs), calculated in
accordance with the provisions of (S)5(B) hereof;
Third: To the ratable payment of Note Premium Obligations and Break
Costs to Benefited Parties;
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Fourth: To the ratable payment of the Existing Fees and Charges to
Benefited Parties;
Fifth: To the ratable payment of the New Fees and Charges to
Benefited Parties; and
Sixth: After payment in full of all Benefited Obligations, to the
payment to or upon the order of Grantors, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may
direct, of any surplus then remaining from such Proceeds.
Until such Proceeds are so applied, the Collateral Agent shall hold such
Proceeds in its custody in accordance with its regular procedures for handling
deposited funds.
(b) Any Proceeds received by the Collateral Agent in respect of the
Collateral, the Security Documents or the Subsidiary Guaranties (net of any
amounts applied in accordance with (S)5(A) First) shall be applied in accordance
with the priority set forth in (S)5(A) Second so that each Benefited Party shall
receive payment of its proportionate amount of all such Proceeds, as the case
may be. Payment shall be based upon the proportion which the amount of such
Benefited Obligations of such Benefited Party bears to the total amount of all
Benefited Obligations of all such Benefited Parties. For purposes of
determining the proportionate amounts of all Benefited Obligations sharing in
any such distribution, (i) the amount of the outstanding Credit Obligations
shall be deemed to be the principal amount of the Credit Notes, the Letter of
Credit Usage (subject to the provisions of (S)5(D)) and all accrued interest and
fees with respect thereto but excluding New Fees and Charges, (ii) the amount of
the outstanding Senior Note Obligations shall be deemed to be the principal
amount of the Senior Notes plus all accrued interest and fees with respect
thereto including, without limitation, the Note Premium Obligations but
excluding New Fees and Charges, and (iii) the amount of the outstanding Hedging
Exposure shall be deemed to be the amount of the Company's obligations then due
and payable (exclusive of expenses or similar liabilities, but including early
termination payments then due) in connection with any Hedging Transaction and
all accrued interest and fees with respect thereto.
(c) Payments by the Collateral Agent in respect of (i) the Credit
Obligations shall be made to the Credit Agent for distribution to the Lenders in
accordance with the Credit Agreement; (ii) the Senior Note Obligations shall be
made as directed in writing by the Noteholder to whom such Senior Note
Obligations are owed; and (iii) Hedging Exposure shall be made as directed by
the Lender to which such is owed.
(d) For the purposes of payments and distributions under this (S)5, the
full amount of Benefited Obligations on account of any outstanding Letter of
Credit shall be deemed to be then due and owing, and the face amount of any
Letter of Credit then outstanding but not drawn upon and all unreimbursed
obligations (other than amounts attributable to interest, fees and costs) due on
any Letters of Credit that have been drawn upon shall be considered principal
owing pursuant to Benefited Obligations relating to Letters of Credit and the
amount outstanding under the Letters of Credit for purposes of determining pro
rata sharing or otherwise. Amounts
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distributable under (S)5 to Lenders on account of such Benefited Obligations
under such Letters of Credit shall be deposited in a separate interest bearing
collateral account in the name of and under the control of the Collateral Agent
and held by the Collateral Agent, first as security for such Letter of Credit
and then as security for all other Benefited Obligations and the amount so
deposited shall be applied to reimburse the Lenders for any drawings under such
Letter of Credit, and if such Letter of Credit shall expire or terminate without
being drawn upon, then such amounts shall be applied to the remaining Benefited
Obligations in the order and manner provided under this (S)5. The Company, by
its acknowledgment and acceptance of this Agreement, hereby grants to the
Collateral Agent, for the benefit of the Benefited Parties, a lien and security
interest in all such funds deposited in such separate interest bearing
collateral account, as security for the Benefited Obligations.
SECTION 6. PREFERENTIAL PAYMENTS AND SPECIAL TRUST ACCOUNT .
(a) The Collateral Agent shall give each Benefited Party a written notice
(a "Notice of Special Default") promptly, but no later than, three business days
after being notified in writing by a Benefited Party that a Special Event of
Default has occurred. After the receipt of such Notice of Special Default, all
Preferential Payments other than those payments received pursuant to (S)6(B)
shall be deposited into the Special Trust Account. Each Benefited Party agrees
that no Event of Default shall occur as a result of payments so made on a timely
basis to the Collateral Agent.
(b) If (i) such Special Event of Default is waived by the Required
Lenders or the Required Noteholders, or both, as the case may be, and if no
other Event of Default has occurred and is continuing, (ii) such Special Event
of Default is cured by the Company or by any amendment of the Credit Agreement
or the Note Agreements, as the case may be, and if no other Event of Default has
occurred and is continuing or (iii) the Benefited Obligations have not been
accelerated and the Majority Benefited Parties have not instructed the
Collateral Agent to seek the appointment of a receiver, commence litigation
against the Company, Tower Automotive or a Subsidiary Guarantor, liquidate the
Collateral, commence a Bankruptcy Proceeding against the Company, seize
Collateral, or exercise other remedies of similar character prior to the 90th
day following such Special Event of Default, the Collateral Agent thereupon
shall return all amounts, together with their pro rata share of interest earned
thereon, held in the Special Trust Account representing payment of any Benefited
Obligations to the Benefited Party initially entitled thereto, and no payments
thereafter received by a Benefited Party shall constitute a Preferential Payment
by reason of such cured or waived Special Event of Default. No payment returned
to a Benefited Party for which such Benefited Party has been obligated to make a
deposit into the Special Trust Account shall thereafter ever be characterized as
a Preferential Payment. If the Special Event of Default is an Event of Default
under the terms of the Credit Agreement and the Note Agreements, the Collateral
Agent shall not return any payments to the Benefited Parties pursuant to (i)
above unless the Required Lenders and the Required Noteholders have each waived
such Special Event of Default.
(c) Each Benefited Party agrees that upon the occurrence of a Special
Event of Default it shall (i) promptly notify the Collateral Agent of the
receipt of any Preferential Payments, (ii) hold such amounts in trust for the
benefit of the Benefited Parties during the time any such
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amounts are held by it, and (iii) deliver to the Collateral Agent such amounts
for deposit into the Special Trust Account.
(d) If (i) an Event of Default has occurred and has not been waived or
cured within 90 days after the occurrence thereof, (ii) the Benefited
Obligations have been accelerated or (iii) the Majority Benefited Parties have
instructed the Collateral Agent to seek the appointment of a receiver, commence
litigation against the Company, Tower Automotive or a Subsidiary Guarantor,
liquidate the Collateral, commence a Bankruptcy Proceeding against the Company,
seize Collateral, or exercise other remedies of similar character, then all
funds, together with interest earned thereon, held in the Special Trust Account
and all subsequent Preferential Payments shall be applied in accordance with the
provisions of (S)5(A) above.
SECTION 7. INFORMATION .
If the Collateral Agent proceeds to enforce any Security Document or
Subsidiary Guaranty or to collect, sell, otherwise dispose of any Collateral or
take any other action with respect to any of such agreements or the Collateral
or any portion thereof or proposes to take any other action pursuant to or
contemplated by this Agreement, the Parties hereto agree as follows:
(a) The Credit Agent shall (i) promptly from time to time, upon the
written request of the Collateral Agent, notify the Collateral Agent of the
outstanding Credit Obligations as at such date as the Collateral Agent may
specify; and (ii) promptly from time to time thereafter notify the
Collateral Agent of any payment received by the Credit Agent to be applied
to satisfy Credit Obligations. The Credit Agent shall certify as to such
amounts and the Collateral Agent shall be entitled to rely conclusively
upon such certification.
(b) Each Noteholder shall (i) promptly from time to time, upon the
written request of the Collateral Agent, notify the Collateral Agent of the
outstanding Senior Note Obligations owed to such Noteholder as at such date
as the Collateral Agent may specify; (ii) promptly from time to time, upon
the written request of the Collateral Agent, notify the Collateral Agent of
the amount that would be payable as a "Make Whole Amount" under (S)6.3 of
the Note Agreements or any successor provision thereto if such "Make Whole
Amount" were payable as of such date as the Collateral Agent may specify
and (iii) promptly from time to time thereafter, notify the Collateral
Agent of any payment received thereafter by such Noteholder to be applied
to the principal of or interest or "Make Whole Amount" on the Senior Note
Obligations owing to such Noteholder. Each Noteholder shall certify as to
such amounts and the Collateral Agent shall be entitled to rely
conclusively upon such certification.
(c) Each Lender party to any Letter of Credit shall (i) promptly
from time to time, upon the written request of the Collateral Agent, notify
the Collateral Agent of the Letter of Credit Usage applicable to such
Letter of Credit and (ii) promptly from time to time thereafter notify the
Collateral Agent of any payment received by such Lender to be applied to
amounts due under such Letter of Credit. Such Lender shall certify as to
such
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amounts and the Collateral Agent shall be entitled to rely conclusively
upon such certification.
(d) Each Lender party to a Hedging Transaction shall (i) promptly
from time to time, upon the written request of the Collateral Agent, notify
the Collateral Agent of the notional amount under such Hedging Transaction
and the amount payable by the Company upon early termination of such
Hedging Transaction at the date of termination as fixed by such Interest
Rate Protection Agreement and (ii) promptly from time to time thereafter
notify the Collateral Agent of any payment received by such Lender to be
applied to amounts due upon early termination of such Hedging Transaction.
Such Lender shall certify as to such amounts and the Collateral Agent shall
be entitled to rely conclusively upon such certification, provided that if
an Event of Default shall have occurred and be continuing, the
certification of any such notional amount must be demonstrated to the
reasonable satisfaction of the Majority Benefited Parties.
SECTION 8. ADDITIONAL PARTIES.
Provided that it is permitted to do so by the terms of the Credit Agreement
and the Note Agreements, the Company may enter into one or more Successor Credit
Agreements or Successor Note Agreements and, pursuant thereto, incur additional
Senior Debt. The Senior Debt outstanding under such Successor Credit Agreements
or Successor Note Agreements, as the case may be, shall be secured by the
Collateral as provided herein and in the Security Documents and shall have the
benefit of guaranties of the Subsidiary Guarantors substantially similar to the
Subsidiary Guaranties; provided that, at the time the Company enters into any
such Successor Credit Agreements or Successor Note Agreements, each Successor
Lender party to such Successor Credit Agreement, or the agent on behalf of all
such Successor Lenders to such Successor Credit Agreement, and each Successor
Noteholder party to such Successor Note Agreements, as the case may be, shall
sign an acknowledgment in the form of Exhibit A-1 or Exhibit A-2, respectively,
attached to this Agreement, by which each such Successor Lender or each such
Successor Noteholder, as the case may be, agrees to be bound by the terms of
this Agreement, and by delivering a signed acknowledgment hereof executed by the
Company, Tower Automotive, each Subsidiary Guarantor and each Grantor to the
Collateral Agent; and provided further that on the date of execution and
delivery of such Successor Credit Agreement or Successor Note Agreements, the
incurrence by the Company of $1 of additional Indebtedness would not constitute
an Event of Default under the Note Agreements.
SECTION 9. DISCLAIMERS, INDEMNITY, ETC.
(a) The Collateral Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the Security Documents. The
Collateral Agent shall not by reason of this Agreement or the Security Documents
be a trustee for any Benefited Party or have any other fiduciary obligation to
any Benefited Party (including any obligation under the Trust Indenture Act of
1939, as amended). The Collateral Agent shall not be responsible to any
Benefited Party for any recitals, statements, representations or warranties
contained in any Financing Agreement or in any certificate or other document
referred to or provided for in, or
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received by any of them under, any Financing Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any
Financing Agreement or any other document referred to or provided for therein or
any Lien under any of the Security Documents or the perfection or priority of
any such Lien or for any failure by any Grantor, any Benefited Party or any
other Person to perform any of its respective obligations under any Financing
Agreement. Without limiting the foregoing, the Collateral Agent shall not be
required to take any action under any Security Document or any Subsidiary
Guaranty, including, without limitation, any action to perfect any security
interests granted in the Collateral pursuant to the Security Documents or to
administer any Collateral unless instructed to do so by the Majority Benefited
Parties. The Collateral Agent may employ agents and attorneys in-fact and shall
not be responsible, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the Collateral
Agent nor any of its directors, officers, employees or agents shall be liable or
responsible for any action taken or omitted to be taken by it or them hereunder
or in connection herewith, except for the gross negligence or willful misconduct
of any such Person.
(b) The Collateral Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telecopy, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of independent legal counsel,
independent accountants and other experts selected by the Collateral Agent. As
to any matters not expressly provided for by this Agreement, the Collateral
Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by the Majority
Benefited Parties, and such instructions of the Majority Benefited Parties, and
any action taken or failure to act pursuant thereto, shall be binding on all
Parties, Directing Parties and Non-Directing Parties.
(c) The Benefited Parties agree that they will indemnify the Collateral
Agent in its capacity as the Collateral Agent, ratably in accordance with the
amount of the Benefited Obligations held by such Benefited Parties (which in the
case of any determination of the Credit Notes prior to the termination of the
Revolving Credit Aggregate Commitment shall include the full amount of the
Revolving Credit Aggregate Commitment, whether or not advanced and outstanding,
but in no event less than the actual amount of Credit Notes outstanding) to the
extent neither reimbursed by the Company or a Grantor under the Security
Documents nor reimbursed out of any Proceeds pursuant to clause First of (S)5(A)
hereof, for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by or asserted against the
Collateral Agent arising out of actions taken or not taken either (i) pursuant
to the direction or consent of the Majority Benefited Parties or (ii) otherwise
pursuant to the terms of this Agreement or the Security Documents, including
reasonable fees and expenses of counsel (including the allocated cost of
internal counsel); provided, however, that no such Benefited Party shall be
liable for any such payment to the extent the obligation to make such payment
arises solely from the Collateral Agent's gross negligence or willful
misconduct. The obligations of the Benefited Parties under this (S)9(C) shall
survive the payment in full of the Benefited Obligations and the termination of
this Agreement.
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(d) The Collateral Agent shall not be required to take any action under
this Agreement or the Security Documents unless and until the Collateral Agent
shall be indemnified to its reasonable satisfaction by one or more of the
Benefited Parties against any and all loss, cost, expense or liability in
connection therewith.
(e) Except for action expressly required of the Collateral Agent
hereunder, the Collateral Agent shall, notwithstanding anything to the contrary
in (S)9(C) hereof, in all cases be fully justified in failing or refusing to act
hereunder unless it shall be further indemnified to its reasonable satisfaction
by the Parties against any and all liability and expense that may be incurred by
it by reason of taking or continuing to take any such action.
(f) The Collateral Agent may deem and treat the payee of any promissory
note or other evidence of indebtedness or obligations relating to any Benefited
Obligation as the owner thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof, signed by such payee and
in form reasonably satisfactory to the Collateral Agent, shall have been filed
with the Collateral Agent. Any request, authority or consent of any Person who
at the time of making such request or giving such authority or consent is the
holder of any such note or other evidence of indebtedness or obligations shall
be conclusive and binding on any subsequent holder, transferee or assignee of
such note or other evidence of indebtedness or obligations and of any note or
notes or other evidences of indebtedness or obligations issued in exchange
therefor.
(g) Except as expressly provided herein and in the Security Documents,
the Collateral Agent shall have no duty to take any affirmative steps with
respect to the administration or collection of amounts payable in respect of the
Security Documents, the Subsidiary Guaranties or the Collateral. The Collateral
Agent shall incur no liability (except to the extent the actions or omissions of
the Collateral Agent in connection therewith constitute gross negligence or
willful misconduct) as a result of any sale of any Collateral, whether at any
public or private sale.
(h) (i) The Collateral Agent may resign at any time by giving at least 30
days' notice thereof to the Parties (such resignation to take effect upon the
acceptance by a successor
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Collateral Agent of any appointment as the Collateral Agent hereunder) and the
Collateral Agent may be removed as the Collateral Agent (1) at any time prior to
an Event of Default by the Benefited Parties, considered as a single class,
holding more than 51% of the sum of (y) the outstanding principal amount of the
Senior Notes, plus (z) the outstanding principal amount of the Credit Notes
(which in the case of any determination prior to the termination of the
Revolving Credit Aggregate Commitment shall include the full amount, whether or
not advanced and outstanding, of the Revolving Credit Aggregate Commitment) and
the Letter of Credit Usage, and (2) after the occurrence and during the
continuation of any Event of Default by either (y) Benefited Parties holding (or
representing) more than 51% of the outstanding principal amount under the Credit
Notes (it being understood that, if the Required Lenders agree on any
instruction to be given the Collateral Agent, the Required Lenders shall be
entitled to vote on behalf of all Lenders for purposes of this clause) or (z)
Benefited Parties holding (or representing) more than 51% of the outstanding
principal amount under the Senior Notes. In the event of any such resignation or
removal of the Collateral Agent, the Majority Benefited Parties shall thereupon
have the right to appoint a successor Collateral Agent which is not a Benefited
Party. If no successor Collateral Agent shall have been so appointed by the
Majority Benefited Parties and shall have accepted such appointment within 30
days after the notice of the intent of the Collateral Agent to resign or the
removal of the Collateral Agent, then the retiring Collateral Agent may, on
behalf of the other Parties, appoint a successor Collateral Agent. Any successor
Collateral Agent appointed pursuant to this clause shall be a commercial bank or
other financial institution organized under the laws of the United States of
America or any state thereof having (1) a combined capital and surplus of at
least $250,000,000 and (2) a rating upon its long-term senior unsecured
indebtedness of "A-2" or better by Moody's Investors Service, Inc. or "A" or
better by Standard & Poor's Corporation.
(ii) Upon the acceptance by a successor Collateral Agent of any
appointment as the Collateral Agent hereunder, such successor Collateral Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Collateral Agent, and the
retiring or removed Collateral Agent shall thereupon be discharged from its
duties and obligations hereunder. After any retiring or removed Collateral
Agent's resignation or removal hereunder as the Collateral Agent, the provisions
of this (S)9 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Collateral Agent.
(i) In no event shall the Collateral Agent or any Party or Benefited
Party be liable or responsible for any funds or investments of funds held by the
Company or any of its Affiliates.
(j) Comerica shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities set forth
herein for any other Benefited Party as and to the extent of its pro rata share
of the Benefited Obligations, all as if Comerica were not appointed as the
Collateral Agent pursuant hereto. The terms "Benefited Parties", "Lenders" or
"Required Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include Comerica or any Affiliate of Comerica in its
individual capacity as a Benefited Party, Lender or one of the Required Lenders
as and to the extent of its pro rata share of the Benefited Obligation.
Comerica and its Affiliates may lend money to, and generally engage in any kind
of business with, any Grantor as if Comerica were not acting as the Collateral
Agent pursuant
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hereto and without any duty to account therefor to the Benefited Parties.
Without limiting the foregoing, each Benefited Party acknowledges that (i)
Comerica is both a Lender and the Credit Agent under the Credit Agreement and is
acting as Collateral Agent under the Security Documents, and (ii) Comerica may
continue to engage in any credit decisions with respect to the Credit Agreement
without any duty to account therefor to the Benefited Parties by reason of its
appointment as the Collateral Agent.
(k) Each Party acknowledges that it has, independently and without
reliance upon the Collateral Agent or any other Party and based upon such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Financing
Agreements to which it is a party. Each Party also acknowledges that it will,
independently and without reliance upon the Collateral Agent or any other Party
and based upon such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Financing Agreements to which it is a party.
SECTION 10. INVALIDATED PAYMENTS.
If any amount distributed by the Collateral Agent to a Benefited Party in
accordance with the provisions of this Agreement is subsequently required to be
returned or repaid by the Collateral Agent or such Benefited Party to the
Company or any Affiliate thereof or their respective representatives or
successors in interest, whether by court order, settlement or otherwise (a
"Repayment Event"), the Collateral Agent shall thereafter apply Proceeds
received in a manner consistent with the terms of this Agreement such that all
Benefited Parties receive such proportion of the Proceeds as would have been
received had the original payment which gave rise to such Repayment Event not
occurred. If a Repayment Event occurs which results in the Collateral Agent
being required to return or repay any amount distributed by it under this
Agreement, the Benefited Party to which such amount was distributed shall,
promptly upon its receipt of a notice thereof from the Collateral Agent, pay the
Collateral Agent such amount; provided, that if any Benefited Party shall fail
to promptly pay such amount to the Collateral Agent, the Collateral Agent may
deduct such amount from any amounts payable thereafter to such Benefited Party
under this Agreement.
SECTION 11. MISCELLANEOUS.
(a) All notices and other communications provided for herein shall be in
writing and may be sent by overnight air courier or facsimile communication and
shall be deemed to have been given when delivered by overnight air courier or
upon receipt of facsimile communication if concurrently with transmission of
such telecopy or telex, a copy thereof shall be sent by overnight courier to the
address specified for such notice or communication. For the purposes hereof,
the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this (S)11(A)) shall be set forth under each party's
name on the signature pages (including acknowledgments) hereof.
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(b) This Agreement may be amended, modified or waived only by an
instrument or instruments in writing signed by all of the holders of Benefited
Obligations and the Collateral Agent; provided, however, that (S)8 of this
Agreement may not be amended or modified without the written consent of the
Company, Tower Automotive and the Subsidiary Guarantors.
(c) This Agreement shall be binding upon and inure to the benefit of the
Collateral Agent, each Party and their respective successors and assigns. In
the event that the holder of any Credit Note or Senior Note shall transfer such
Credit Note or Senior Note, it shall promptly so advise the Collateral Agent.
Each transferee of any Credit Note or Senior Note shall take such Credit Note or
Senior Note subject to the provisions of this Agreement and to any request made,
waiver or consent given or other action taken or authorized hereunder, by each
previous holder of such Credit Note or Senior Note, prior to the receipt by the
Collateral Agent of written notice of such transfer; and, except as expressly
otherwise provided in such notice, the Collateral Agent shall be entitled to
assume conclusively that the transferee named in such notice shall thereafter be
vested with all rights and powers as a Party under this Agreement. Upon the
written request of any Party, the Collateral Agent will provide any Party with
copies of any written notices of transfer received pursuant hereto.
(d) This Agreement shall continue to be effective among the Parties even
though a case or proceeding under any bankruptcy or insolvency law or any
proceeding in the nature of a receivership, whether or not under any insolvency
law, shall be instituted with respect to the Company, Tower Automotive, any
Subsidiary Guarantor or any other Grantor, or any portion of the property or
assets of the Company, Tower Automotive, any Subsidiary Guarantor or any other
Grantor, and all actions taken by the Parties with regard to such proceeding
shall be by the Majority Benefited Parties; provided, however, that nothing
herein shall be interpreted to preclude any Party from filing a proof of claim
with respect to its Benefited Obligations or from casting its vote, or
abstaining from voting, for or against confirmation of a plan of reorganization
in a case of bankruptcy, insolvency or similar law in its sole discretion.
(e) Each Party hereto agrees to do such further acts and things and to
execute and deliver such additional agreements, powers and instruments as any
other Party hereto may reasonably request to carry into effect the terms,
provisions and purposes of this Agreement or to better assure and confirm unto
such other Party hereto its respective rights, powers and remedies hereunder.
(f) This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
A telecopy of the signature of any party on any counterpart shall be effective
as the signature of the party executing such counterpart for purposes of
effectiveness of this Agreement.
(g) This Agreement shall become effective immediately upon execution by
the Parties and shall continue in full force and effect until one year following
the date upon which all Benefited Obligations are irrevocably paid in full and
all commitments under the Credit Agreement have been terminated, it being
understood that if at any time the Lien of the Security
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Documents shall be released by the Benefited Parties, this Agreement shall
continue in full force and effect as provided above as and with respect to the
Subsidiary Guaranties.
(h) No course of dealing on the part of the Collateral Agent or any
Benefited Party, nor any delay or failure on the part of the Collateral Agent or
any Benefited Party in exercising any right, power or privilege hereunder shall
operate as a waiver of such right, power or privilege or otherwise prejudice the
Collateral Agent's or such Benefited Party's rights and remedies hereunder; nor
shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or
remedy conferred upon or reserved to the Collateral Agent or any Benefited Party
under this Agreement or the Security Documents, is intended to be exclusive of
any other right or remedy, and every right and remedy shall be cumulative and in
addition to every other right or remedy granted hereunder or thereunder or now
or hereafter existing under any applicable law. Every right and remedy granted
by this Agreement, the Security Documents or by applicable law to the Collateral
Agent or any Benefited Party may be exercised from time to time and as often as
may be deemed expedient by the Collateral Agent or any Benefited Party and,
unless contrary to the express provisions of this Agreement or the Security
Documents irrespective of the occurrence or continuance of any Event of Default.
(i) All terms, covenants, agreements, representations and warranties of
the Company made herein or in any certificate or other document delivered
pursuant hereto shall be deemed to be material and to have been relied upon by
the Benefited Parties, notwithstanding any investigation heretofore or hereafter
made by any Benefited Party or on such Benefited Party's behalf, and those
covenants and agreements of the Company set forth in (j) below hereof shall
survive the repayment in full of the Benefited Obligations.
(j) (i) The Company shall pay or reimburse the Collateral Agent and, to
the extent provided in clause (D) below, each Benefited Party, for the payment
of (A) the reasonable fees and expenses of counsel to the Collateral Agent, in
connection with the preparation, execution, delivery and administration of this
Agreement and the Security Documents and the consummation of the transactions
contemplated hereby, and in connection with advising the Collateral Agent as to
its rights and responsibilities with respect thereto, and in connection with any
amendments, waivers or consents in connection therewith, (B) all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing or recording of this Agreement, the Security
Documents, and the consummation of the transactions contemplated hereby, and any
and all liabilities with respect to or resulting from any delay by the Company
in paying or omitting to pay such taxes or fees, (C) all reasonable fees and
expenses and other customary charges of the Collateral Agent for any collateral
audits performed by Collateral Agent under this Agreement or any of the
Financing Agreements, and (D) all reasonable costs and expenses of the
Collateral Agent and, following the occurrence and during the continuance of any
Event of Default, the Benefited Parties (including reasonable fees and expenses
of counsel and whether incurred through negotiations, legal proceedings or
otherwise) in connection with any amendment, waiver or enforcement of, or the
exercise or preservation of any rights under, this Agreement or the Security
Documents. The Company shall pay the Collateral Agent all fees and expenses of
the Collateral Agent in connection with its administration and monitoring of the
Collateral, including without limitation all expenses and
-22-
<PAGE>
customary charges for all collateral audits. The Company hereby indemnifies and
shall hold the Benefited Parties and the Collateral Agent and their respective
officers, directors, counsel, employees and agents, harmless from and against
any and all claims, damages, losses, liabilities, costs or expenses whatsoever
which the Benefited Parties or the Collateral Agent or any such person may incur
or which may be claimed against any of them with respect to the execution,
delivery, enforcement, performance and administration of this Agreement or any
Security Document, whether before or after the occurrence of an Event of
Default; provided, however, the Company shall have no obligation pursuant to
this sentence to indemnify any such person to the extent that such claims,
damages, losses, liabilities, costs or expenses arise from the gross negligence
or willful misconduct of such person.
(ii) In addition to the payment of expenses pursuant to J(i) above,
whether or not the transactions contemplated hereby shall be consummated, the
Company hereby indemnifies and shall hold the Benefited Parties and the
Collateral Agent and their respective officers, directors, employees and agent,
harmless from and against any and all claims, damages, losses, liabilities,
costs or expenses whatsoever (including without limitation, the reasonable fees
and disbursements of counsel) in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
the Benefited Parties or the Collateral Agent or any such person shall be
designated a party thereto), which any of them may incur or which may be claimed
against any of them by reason of or in connection with this Agreement or any of
the actions contemplated hereby; provided, however, that the Company shall not
be required to indemnify any such person to the extent that claims, damages,
losses, liabilities, costs or expenses arise from the gross negligence or
willful misconduct of such person.
(k) Each Benefited Party agrees to execute and deliver to the others any
and all such further instruments and documents and take such further actions as
may be reasonably requested, to the end that the respective terms and provisions
of this Agreement and the Security Documents may be carried out promptly and
fully. Without limiting the generality of the foregoing, each Benefited Party
agrees to cooperate fully with each other Benefited Party in authorizing and
directing the Collateral Agent to take all actions reasonably necessary or
desirable to ensure the preservation or protection of all or any portion of the
Collateral, including without limitation, authorizing and directing expenditures
by the Collateral Agent in connection therewith and to prepare and file proofs
of claim and other pleadings and motions in connection with any insolvency
proceeding.
(l) The Benefited Parties, the Collateral Agent, the Company and the
Grantors, after consulting or having had the opportunity to consult with counsel
knowingly, voluntarily and intentionally waive any right any of them may have to
a trail by jury in any litigation based upon or arising out of this Agreement or
any related instrument or agreement or any of the transactions contemplated by
this Agreement, or any course of conduct, dealing, statements (whether oral or
written) or actions of any of them relating to or in connection with this
Agreement or any of the Benefited Obligations secured hereby.
-23-
<PAGE>
(m) This Agreement is a contract made under, and shall be governed by and
construed in accordance with, the laws of the State of Michigan applicable to
contracts made and to be performed entirely within such State and without giving
effect to choice of law principles of such State. The Company, the Grantors,
the Benefited Parties, and the Collateral Agent further agree that any legal
action or proceeding with respect to this Agreement or the Security Document or
the transactions contemplated hereby may be brought in any court of the State of
Michigan, or in any court of the United States of America sitting in Michigan,
and hereby submit the United States of America sitting in Michigan, and hereby
submit to and accept generally and unconditionally the jurisdiction of those
courts with respect to its person and property, and the Company, the Grantors,
the Benefited Parties, and the Collateral Agent irrevocably consent to the
service of process in connection with any such action or proceeding by personal
delivery to the Company, the Grantors, the Benefited Parties or the Collateral
Agent or by the delivery thereof by overnight courier, postage prepaid to the
Company, the Grantors, the Benefited Party, and to the Collateral Agent in the
same manner at the addresses as set forth on signature pages hereof. Nothing in
this paragraph shall affect the right of the Collateral Agent to serve process
in any other manner permitted by law or limit the right of the Collateral Agent
to bring any such action or proceeding against the Company or property in the
courts of any other jurisdiction. The Company, the Grantors, the Benefited
Parties, and the Collateral Agent hereby irrevocably waive any objection to the
laying of venue of any such suit or proceeding in the above described courts.
(n) This Agreement shall terminate when all Benefited Obligations are
paid in full, such payment is not subject to any possibility of revocation or
rescission, and the Credit Agreement and all other obligations of any of the
Benefited Parties with respect to the Benefited Obligations to lend to the
Company shall have expired or been terminated.
(o) Headings of sections of this Agreement have been included herein for
convenience only and should not be considered in interpreting this Agreement.
(p) Nothing in this Agreement, the Security Documents or the Subsidiary
Guaranties, expressed or implied, is intended or shall be construed to confer
upon or give to any Person other than the Benefited Parties, any right, remedy
or claim under or by reason of any such agreement or any covenant, condition or
stipulation herein or therein contained.
(q) In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
-24-
<PAGE>
In Witness Whereof, the Parties hereto have caused this Agreement to be
duly executed as of the date and year first written above.
Comerica Bank, as a Lender and as Credit
Agent for the Lenders
By
--------------------------------------
Title:
Comerica Bank, as Collateral Agent
By
--------------------------------------
Title:
Notice Address:
Comerica Bank
One Detroit Center
500 Woodward Avenue
Detroit, MI 48226
Attn: David B. Martin
Telecopier No.: (313) 222-5759
Bank of America Illinois
By
--------------------------------------
Title:
Notice Address:
Bank of America Illinois
231 South LaSalle
Chicago, IL 60697
Attn: R.G. Stapleton
Telecopier No.: (312)
First Bank National Association
By
--------------------------------------
Title:
-25-
<PAGE>
Notice Address:
First Bank National Association
601 2nd Avenue South
Minneapolis, MN 55402-4302
Attn: Mark R. McDonald
Telecopier No.: (612) 973-0822
Teachers Insurance and Annuity Association
of America, as a Noteholder
By
--------------------------------------
Its
Notice Address:
Teachers Insurance and Annuity Association
of America
730 Third Avenue
New York, New York 10017-3263
Attention: Securities Division, Private
Placements
Telecopier: (212) 916-6581
Jefferson-Pilot Life Insurance Company, as
a Noteholder
By
--------------------------------------
Its
Notice Address:
Jefferson-Pilot Life Insurance Company
100 North Greene
Greensboro, North Carolina 27420
Attention: Securities Administration -
3630
Telecopier: (910) 691-3025
-26-
<PAGE>
Alexander Hamilton Life Insurance Company
of America, as a Noteholder
By
--------------------------------------
Its
Notice Address:
Alexander Hamilton Life Insurance Company
of America
P.O. Box 21008
Greensboro, NC 27420
Attention: Securities Administration -
3630
Telecopier: (910) 691-3025
Northern Life Insurance Company
By
--------------------------------------
Its
Notice Address:
Northern Life Insurance Company
c/o ReliStar Investment
Research, Inc.
100 Washington Avenue South,
Suite 800
Minneapolis, MN 55401-2121
Attention: Frank Pintens
Telecopier Number: (612) 372-5368
Northwestern National Life Insurance
Company
By
--------------------------------------
Its
-27-
<PAGE>
Notice Address:
Northwestern National Life Insurance
Company
c/o ReliStar Investment
Research, Inc.
100 Washington Avenue South,
Suite 800
Minneapolis, MN 55401-2121
Attention: Frank Pintens
Telecopier Number: (612) 372-5368
Bankers Security Life Insurance Society
By
--------------------------------------
Its
By
--------------------------------------
Its
Notice Address:
Bankers Security Life Insurance Society
c/o ReliStar Investment
Research, Inc.
100 Washington Avenue South,
Suite 800
Minneapolis, MN 55401-2121
Attention: Frank Pintens
Telecopier Number: (612) 372-5368
-28-
<PAGE>
Each of the undersigned, R.J. Tower Corporation, Tower Automotive, Inc. and
the Subsidiary Guarantors (collectively, the "Obligors" and, individually, an
"Obligor"), hereby acknowledges and agrees to the foregoing terms and provisions
contained in this Intercreditor Agreement. By executing this Intercreditor
Agreement, each of the Obligors agrees to be bound by the provisions thereof as
they relate to the relative rights of the Benefited Parties as among such
Benefited Parties; provided, however, that nothing in this Intercreditor
Agreement shall amend, modify, change or supersede the respective terms of the
Financing Agreements as between the Benefited Parties or any of them and any
Obligor. In the event of any conflict or inconsistency between the terms of
this Intercreditor Agreement and the Financing Agreements, the Financing
Agreements shall govern as between the Benefited Parties thereto and such
Obligor. Each Obligor further agrees that the terms of this Intercreditor
Agreement shall not give any Obligor any substantive rights vis a vis any
Benefited Party or the Collateral Agent and that it shall not use the violation
of this Intercreditor Agreement by any of the Parties hereto as a defense to the
enforcement by any Benefited Party under any Financing Agreement, nor assert
such violation as a counterclaim or basis for set-off or recoupment against any
of them. Each Obligor further acknowledges and agrees that the scope of the
agency granted by this Intercreditor Agreement to the Collateral Agent hereunder
is strictly limited by this Intercreditor Agreement and is a separate and
distinct grant from the grants of agency contained in the Credit Agreement and
the Security Documents. By its execution hereof, each Obligor hereby represents
to each of the Benefited Parties and the Collateral Agent that the execution,
delivery and performance by R.J. Tower Corporation of the Note Agreements and
the other Noteholder Documents does not constitute a violation of any of the
provisions of the Credit Agreement as in effect on the Closing Date.
R.J. Tower Corporation
By /s/ Anthony A. Barone
--------------------------------------
Title: Vice President
Date: May 31, 1996
Tower Automotive, Inc.
By /s/ Anthony A. Barone
--------------------------------------
Title: Vice President
Date: May 31, 1996
[Subsidiary Guarantor]
By /s/ Anthony A. Barone
--------------------------------------
Title: Vice President
Date: May 31, 1996
-29-
<PAGE>
[Subsidiary Guarantor]
By
--------------------------------------
Title:
Date:
[Subsidiary Guarantor]
By
--------------------------------------
Title:
Date:
[Subsidiary Guarantor]
By
--------------------------------------
Title:
Date:
-30-
<PAGE>
LIST OF SECURITY DOCUMENTS AND GUARANTIES
I. Existing Security Documents.
(a) the Amended and Restated Continuing Collateral Mortgage dated as
of January 16, 1996 by Kalamazoo Stamping and Die Company, a Michigan
Corporation, in favor of Comerica Bank, as Agent, with respect to certain
real property located in Kalamazoo, Michigan.
(b) The Amended and Restated Continuing Collateral Mortgage dated as
of January 16, 1996 by the Company in favor of Comerica Bank, as Agent,
with respect to certain real property located in Grand Rapids, Michigan.
(c) The Amended and Restated Continuing Collateral Mortgage dated as
of January 16, 1996 by R.J. Tower Corporation, an Indiana corporation, in
favor of Comerica Bank, as Agent, with respect to certain real property
located in Auburn, Indiana.
(d) The Amended and Restated Continuing Collateral Mortgage dated as
of January 16, 1996 by Edgewood Manufacturing Corp., a Delaware
corporation, in favor of Comerica Bank, as Agent, with respect to certain
real property located in Manchester, Michigan.
(e) The Mortgage dated as of January 16, 1996 by R.J. Tower
Corporation, a Kentucky corporation, in favor of Comerica Bank, as Agent,
with respect to certain real property located in Bardstown, Kentucky.
(f) The Amended and Restated Security Agreement dated as of
January 16, 1996 by Kalamazoo in favor of Comerica Bank, as Agent.
(g) The Amended and Restated Security Agreement dated as of
January 16, 1996 by the Company in favor of Comerica Bank, as Agent.
(h) The Amended and Restated Security Agreement dated as of
January 16, 1996 by Edgewood in favor of Comerica Bank, as Agent.
(i) The Amended and Restated Security Agreement dated as of
January 16, 1996 by Tower-Indiana in favor of Comerica Bank, as Agent.
(j) The Amended and Restated Security Agreement dated as of
January 16, 1996 by Tower-Kentucky in favor of Comerica Bank, as Agent.
(k) The Security Agreement dated as of January 16, 1996 by Trylon
Corporation, a Michigan corporation in favor of Comerica Bank, as Agent.
Schedule I
(to Intercreditor Agreement)
<PAGE>
(l) The Amended and Restated Security Agreement (Third Party Pledge)
dated as of January 16, 1996 by Tower Automotive, Inc. in favor of Comerica
Bank, as Agent.
II. Existing Bank Guaranties.
Amended and Restated Guaranty (Tower-Michigan Debt) dated as of
January 16, 1996.
Amended and Restated Letter of Credit Guaranty (Tower-Indiana Debt)
dated as of January 16, 1996.
Amended and Restated Letter of Credit Guaranty (Tower-Kentucky Debt)
dated as of January 16, 1996.
III. Noteholders' Guaranties.
The Subsidiaries Guaranty dated as of May 31, 1996 in favor of the
Noteholders.
-2-
<PAGE>
FORM OF ACKNOWLEDGMENT TO
INTERCREDITOR AGREEMENT FOR SUCCESSOR LENDERS
UNDER A SUCCESSOR CREDIT AGREEMENT
Reference is hereby made to the Intercreditor Agreement dated as of
May ___, 1996 (the "Agreement") among Comerica Bank, as Credit Agent for the
Lenders party to the Credit Agreement and as the Collateral Agent, and the
Noteholders party thereto and certain other parties, if any, thereto. The
undersigned Successor Lender or its agent has entered into a Credit Agreement
dated as of _______________ with R.J. Tower Corporation and desires the Credit
Obligations with respect thereto to be secured by the Security Documents. The
undersigned acknowledges the terms of the Agreement and agrees to be bound
thereby.
,
-------------------------------------
as a Successor Lender
By
-----------------------------------
Title
-----------------------------
Date
------------------------------
Notice Address:
-------------------------------------
-------------------------------------
-------------------------------------
Exhibit A-1
(to Intercreditor Agreement)
<PAGE>
Acknowledged and Agreed:
R.J. Tower Corporation
By
-----------------------------------
Title
-----------------------------
Date
-----------------------------
Tower Automotive, Inc.
By
-----------------------------------
Title
-----------------------------
Date
-----------------------------
[Subsidiary Guarantor]
By
-----------------------------------
Title
-----------------------------
Date
-----------------------------
[Subsidiary Guarantor]
By
-----------------------------------
Title
-----------------------------
Date
-----------------------------
------------------------------------
(Other Grantors)
By
-----------------------------------
Title
-----------------------------
Date
-----------------------------
-2-
<PAGE>
FORM OF ACKNOWLEDGMENT TO
INTERCREDITOR AGREEMENT FOR SUCCESSOR NOTEHOLDERS
UNDER A SUCCESSOR NOTE AGREEMENT
Reference is hereby made to the Intercreditor Agreement dated as of
May ___, 1996, (the "Agreement") among Comerica Bank, as Credit Agent for the
Lenders party to the Credit Agreement and as the Collateral Agent, and the
Noteholders party thereto and certain other parties, if any, thereto. The
undersigned Successor Noteholder has entered into a Note Agreement dated as of
_____________ with R.J. Tower Corporation and desires the Senior Note
Obligations with respect thereto to be secured by the Security Documents. The
undersigned acknowledges the terms of the Agreement and agrees to be bound
thereby.
,
--------------------------------
as a Successor Noteholder
By
-----------------------------
Title
------------------------
Date
------------------------
Notice Address:
--------------------------------
--------------------------------
--------------------------------
EXHIBIT B
(to Intercreditor Agreement)
<PAGE>
Acknowledged and Agreed:
R.J. Tower Corporation
By
------------------------------
Title
------------------------
Date
------------------------
Tower Automotive, Inc.
By
------------------------------
Title
------------------------
Date
------------------------
[Subsidiary Guarantor]
By
------------------------------
Title
------------------------
Date
------------------------
[Subsidiary Guarantor]
By
------------------------------
Title
------------------------
Date
------------------------
(Other Grantors)
By
------------------------------
Title
------------------------
Date
------------------------
-2-
<PAGE>
Exhibit 4.13
------------
Draft Dated May 31, 1996
============================================================================
R. J. TOWER CORPORATION
NOTE AGREEMENT
Dated as of May 31, 1996
Re: $40,000,000 7.65% Senior Secured Notes, Series A,
Due June 1, 2006
and
$25,000,000 7.82% Senior Secured Notes, Series B,
Due June 1, 2008
============================================================================
<PAGE>
TABLE OF CONTENTS
(Not a part of the Agreement)
<TABLE>
<CAPTION>
Section Heading Page
<S> <C> <C>
Section 1. Description of Notes and Commitment......................................... 1
Section 1.1. Description of Notes................................................... 1
Section 1.2. Commitment, Closing Date............................................... 2
Section 1.3. Other Agreements....................................................... 2
Section 1.4. Subsidiary Guaranties.................................................. 2
Section 1.5. Security for the Notes................................................. 3
Section 1.6. Release of Liens on Collateral and Subsidiary Guaranties............... 4
Section 2. Prepayment of Notes......................................................... 5
Section 2.1. Required Prepayments................................................... 5
Section 2.2. Optional Prepayment with Premium....................................... 6
Section 2.3. Notice of Optional Prepayments......................................... 6
Section 2.4. Application of Prepayments............................................. 6
Section 2.5. Direct Payment......................................................... 6
Section 3. Representations............................................................. 7
Section 3.1. Representations of the Company......................................... 7
Section 3.2. Representations of the Purchaser....................................... 7
Section 4. Closing Conditions.......................................................... 9
Section 4.1. Conditions............................................................. 9
Section 4.2. Waiver of Conditions................................................... 11
Section 5. Company Covenants........................................................... 11
Section 5.1. Corporate Existence, Etc............................................... 11
Section 5.2. Insurance.............................................................. 11
Section 5.3. Taxes, Claims for Labor and Materials; Compliance with Laws............ 11
Section 5.4. Maintenance, Etc....................................................... 12
Section 5.5. Nature of Business..................................................... 12
Section 5.6. Consolidated Adjusted Net Worth........................................ 12
Section 5.7. Fixed Charges Coverage Ratio........................................... 12
Section 5.8. Limitations on Indebtedness............................................ 13
Section 5.9. Limitation on Liens.................................................... 14
Section 5.10. Distributions.......................................................... 16
Section 5.11. Mergers, Consolidations and Sales of Assets............................ 17
Section 5.12. Repurchase of Notes.................................................... 21
Section 5.13. Transactions with Affiliates........................................... 21
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 5.14. Withdrawal from Multiemployer Plans and Termination of Pension Plans.... 21
Section 5.15. Reports and Rights of Inspection........................................ 22
Section 5.16. Guaranty by Subsidiaries................................................ 26
Section 5.17. Designation of Subsidiaries............................................. 26
Section 5.18. Limitation on Restrictive Agreements.................................... 26
Section 5.19. Undertakings Relating to Collateral Documents and Subsidiary Guaranties. 27
Section 6. Events of Default and Remedies Therefor...................................... 28
Section 6.1. Events of Default....................................................... 28
Section 6.2. Notice to Holders....................................................... 30
Section 6.3. Acceleration of Maturities.............................................. 30
Section 6.4. Rescission of Acceleration.............................................. 31
Section 7. Amendments, Waivers and Consents............................................. 32
Section 7.1. Consent Required........................................................ 32
Section 7.2. Solicitation of Holders................................................. 32
Section 7.3. Effect of Amendment or Waiver........................................... 32
Section 8. Interpretation of Agreement; Definitions..................................... 32
Section 8.1. Definitions............................................................. 32
Section 8.2. Accounting Principles................................................... 45
Section 8.3. Directly or Indirectly.................................................. 45
Section 9. Miscellaneous................................................................ 46
Section 9.1. Registered Notes........................................................ 46
Section 9.2. Exchange of Notes....................................................... 46
Section 9.3. Loss, Theft, Etc. of Notes.............................................. 46
Section 9.4. Expenses, Stamp Tax Indemnity........................................... 46
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative....................... 47
Section 9.6. Notices................................................................. 47
Section 9.7. Indemnification......................................................... 48
Section 9.8. Successors and Assigns.................................................. 48
Section 9.9. Survival of Covenants and Representations............................... 48
Section 9.10. Severability............................................................ 49
Section 9.11. Governing Law........................................................... 49
Section 9.12. Submission to Jurisdiction.............................................. 49
Section 9.13. Captions................................................................ 49
Signature Page............................................................................... 50
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENTS TO NOTE AGREEMENT:
<S> <C> <C>
Schedule I - Names and Addresses of Purchasers and Amounts of Commitments
Schedule II - Current Debt; Funded Debt; Liens Securing Funded Debt
(including Capitalized Leases); Subsidiaries; and Restricted
Subsidiaries of the Company as of the Closing Date
Exhibit A-1 - Form of 7.65% Senior Secured Note, Series A, Due June 1, 2006
Exhibit A-2 - Form of 7.82% Senior Secured Note, Series B, Due June 1, 2008
Exhibit B - Representations and Warranties of the Company
Exhibit C - Form of Subsidiary Guaranty
Exhibit D - Description of Special Counsel's Closing Opinion
Exhibit E - Description of Closing Opinions of Counsel to the Company
</TABLE>
-iii-
<PAGE>
R. J. TOWER CORPORATION
6303 28th Street S.E.
Grand Rapids, Michigan 49546
NOTE AGREEMENT
Re: $40,000,000 7.65% Senior Secured Notes, Series A,
Due June 1, 2006
and
$25,000,000 7.82% Senior Secured Notes, Series B,
Due June 1, 2008
Dated as of
May 31, 1996
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, R. J. Tower Corporation, a Michigan corporation (the
"Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. (a) The Company will authorize the
issue and sale of its 7.65% Senior Secured Notes, Series A, Due June 1, 2006
(the "Series A Notes") in the aggregate principal amount of $40,000,000 and its
7.82% Senior Secured Notes, Series B, Due June 1, 2008 (the "Series B Notes") in
the aggregate principal amount of $25,000,000. The Series A Notes and the Series
B Notes issued pursuant to this Agreement and the other separate agreements
referred to in (S)1.3 are hereinafter collectively referred to as the "Notes".
(b) The Series A Notes will be dated the date of issue, will bear interest
from such date at the rate of 7.65% per annum, payable semiannually on the first
day of June and December in each year (commencing December 1, 1996) and at
maturity and will bear interest on overdue principal (including any overdue
optional prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest at the Overdue Rate
after the due date, whether by acceleration or otherwise, until paid. The Series
A Notes will mature on June 1, 2006 and will be substantially in the form
attached hereto as Exhibit A-1. The Series B Notes will be dated the date of
issue, will bear interest from such date at the rate of 7.82% per annum, payable
semiannually on the first day of June and December in each year (commencing
December 1, 1996) and at maturity and will bear interest on overdue
<PAGE>
principal (including any overdue required or optional prepayment of principal)
and premium, if any, and (to the extent legally enforceable) on any overdue
installment of interest at the Overdue Rate after the date due, whether by
acceleration or otherwise, until paid. The Series B Notes will mature on
June 1, 2008 and will be substantially in the form attached hereto as
Exhibit A-2. Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months. The Notes are not subject to prepayment or
redemption at the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with the premium, if
any, set forth in (S)2 of this Agreement. You and the other purchasers named in
Schedule I are hereinafter sometimes referred to as the "Purchasers". The terms
which are capitalized herein shall have the meanings set forth in (S)8.1 unless
the context shall otherwise require.
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company, Notes in the principal amount set forth
opposite your name on Schedule I hereto at a price of 100% of the principal
amount thereof on the Closing Date hereafter mentioned.
Delivery of the Notes will be made at the offices of Kirkland & Ellis, 200
East Randolph Drive, Chicago, Illinois 60601, against payment therefor in
Federal Reserve or other funds current and immediately available at Comerica
Bank, Detroit, Michigan, in the amount of the purchase price at 10:00 A.M.,
Chicago time on May 31, 1996 (the "Closing Date"). The Notes delivered to you
on the Closing Date will be delivered to you in the form of a single registered
Note in the form attached hereto as Exhibit A-1 or Exhibit A-2, as the case may
be, for the full amount of your purchase (unless different denominations are
specified by you), registered in your name or in the name of such nominee, as
may be specified in Schedule I attached hereto.
Section 1.3. Other Agreements. Simultaneously with the execution and
delivery of this Agreement, the Company is entering into similar agreements with
the other Purchasers under which such other Purchasers agree to purchase from
the Company the principal amount of Notes set opposite such Purchasers' names in
Schedule I, and your obligation and the obligations of the Company hereunder are
subject to the execution and delivery of the similar agreements by the other
Purchasers. This Agreement and said similar agreements with the other Purchasers
are herein collectively referred to as the "Agreements". The obligations of each
Purchaser shall be several and not joint and no Purchaser shall be liable or
responsible for the acts of any other Purchaser.
Section 1.4. Subsidiary Guaranties. The payment by the Company of all
amounts due with respect to the Notes and the performance by the Company of its
obligations under this Agreement and the similar Agreements described in (S)1.3
will be absolutely and unconditionally guaranteed by the Subsidiary Guarantors
pursuant to the Guaranty Agreement substantially in the form of Exhibit C
attached hereto and made a part hereof or in such other form as shall be
acceptable to the holders of at least 51% in aggregate principal amount of
outstanding Notes (the "Subsidiary Guaranties").
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Section 1.5. Security for the Notes. In addition to the Subsidiary
Guaranties provided for in (S)1.4, the Notes will be, upon compliance with the
requirements of (S)5.19, entitled to the benefit of and will be secured by the
following contracts and agreements, each of which will be in form and substance
satisfactory to you and your special counsel:
(i) the Second Amended and Restated Continuing Collateral Mortgage by
Kalamazoo Stamping and Die Company, a Michigan Corporation ("Kalamazoo"),
in favor of the Collateral Agent with respect to certain real property
located in Kalamazoo, Michigan;
(ii) the Second Amended and Restated Continuing Collateral Mortgage by
the Company in favor of the Collateral Agent with respect to certain real
property located in Grand Rapids, Michigan;
(iii) the Second Amended and Restated Continuing Collateral Mortgage
by R.J. Tower Corporation, an Indiana corporation ("Tower-Indiana"), in
favor of the Collateral Agent with respect to certain real property located
in Auburn, Indiana;
(iv) the Second Amended and Restated Continuing Collateral Mortgage by
Edgewood Manufacturing Corp., a Delaware corporation ("Edgewood") in favor
of the Collateral Agent, with respect to certain real property located in
Manchester, Michigan;
(v) the Amended and Restated Mortgage by R.J. Tower Corporation, a
Kentucky corporation ("Tower-Kentucky"), in favor of the Collateral Agent
with respect to certain real property located in Bardstown, Kentucky;
(the foregoing Mortgages are hereinafter collectively referred to as the
"Mortgages");
(vi) the Second Amended and Restated Security Agreement by Kalamazoo
in favor of the Collateral Agent;
(vii) the Second Amended and Restated Security Agreement by the
Company in favor of the Collateral Agent;
(viii) the Second Amended and Restated Security Agreement by Edgewood
in favor of the Collateral Agent;
(ix) the Second Amended and Restated Security Agreement by Tower-
Indiana in favor of the Collateral Agent;
(x) the Second Amended and Restated Security Agreement by Tower-
Kentucky in favor of the Collateral Agent;
(xi) the Amended and Restated Security Agreement by Trylon
Corporation, a Michigan corporation ("Trylon") in favor of the Collateral
Agent;
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(xii) the Second Amended and Restated Security Agreement (Third Party
Pledge) by Tower Automotive in favor of the Collateral Agent;
(the foregoing Security Agreements are hereinafter collectively referred to as
the "Security Agreements")
The Mortgages, Security Agreements and any other instruments, documents,
agreements referred to herein or related hereto pursuant to which the Company or
any Subsidiary agrees to grant Liens in favor of the Collateral Agent for the
ratable benefit of the holders of the Notes are hereinafter referred to as the
"Collateral Documents". The Collateral Documents and the Subsidiary Guaranties
are hereinafter collectively referred to as the "Support Documents".
The enforcement of the rights and benefits in respect of the Support
Documents and the allocation of proceeds thereof will be subject to a Collateral
Agency and Intercreditor Agreement dated as of May 31, 1996 in form and
substance satisfactory to you and your special counsel (the "Intercreditor
Agreement") to be entered into by the Bank Lenders, the Collateral Agent, the
Company and the Subsidiary Guarantors with you.
Section 1.6. Release of Liens on Collateral and Subsidiary Guaranties.
(a) The holders of the Notes agree that on or after June 30, 1996 they will
release the Liens on all or any portion of the Collateral created by the
Collateral Documents and will terminate the Collateral Documents concurrently
with the release by the Bank Lenders of the Liens on the same Collateral and the
termination by the Bank Lenders of the same Collateral Documents, provided, that
a Responsible Officer (other than the Secretary or an Assistant Secretary of the
Company) (1) certifies to the holders of the Notes and (2) provides such
additional evidence as may be reasonably requested by the holders of the Notes,
to establish that:
(i) the ratio of Consolidated Funded Debt to Consolidated Total
Capitalization on the date of such certificate does not exceed 0.50 to
1.00;
(ii) Consolidated Adjusted Net Worth on the date of such certificate
exceeds $125,000,000; and
(iii) no Default or Event of Default has occurred and is continuing
on the date of such certificate.
If a Responsible Officer has delivered the certificate and other requested
additional evidence, if any, contemplated by this (S)1.6, the holders of the
Notes shall concurrently with the Bank Lenders promptly direct the Collateral
Agent to take such action as may be required by the Collateral Documents to
permit the termination of the Liens created thereby. It is understood and
agreed by the Company and the holders of the Notes that from and after the date
of release of the Lien of the Collateral Documents, neither the Collateral nor
any part or portion thereof shall thereafter be subjected to any Lien except a
Lien created or incurred within the limitations provided in (S)5.9.
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(b) The holders of the Notes agree that they will release the Subsidiary
Guaranties upon the permanent release by the Bank Lenders of all Guaranties of
Subsidiaries of the Indebtedness outstanding under the Credit Agreement
including without limitation Guaranties relating to the Bond Letters of Credit
(as defined in the Credit Agreement).
(c) The Company will not, directly or indirectly, pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any holder of secured or guarantied Indebtedness as consideration
for or as an inducement to (1) its direction to the Collateral Agent to release
the Lien of the Collateral Documents or to terminate the Collateral Documents or
(2) its release of any Guaranty of such Indebtedness, unless such remuneration
is concurrently offered and paid, on the same terms, ratably to each holder of
the Notes then outstanding.
SECTION 2. PREPAYMENT OF NOTES.
Section 2.1. Required Prepayments. (a) In addition to paying the
entire outstanding principal amount and the interest due on the Series A Notes
on the maturity date thereof, the Company agrees that on June 1, in each year,
commencing June 1, 2000 and ending June 1, 2005, both inclusive, it will prepay
and apply and there shall become due and payable on the principal Indebtedness
evidenced by the Notes an amount equal to the lesser of (1) $5,714,286 or
(2) the principal amount of the Series A Notes then outstanding. The entire
remaining principal amount of the Series A Notes shall become due and payable on
June 1, 2006.
(b) In addition to paying the entire outstanding principal amount and the
interest due on the Series B Notes on the maturity date thereof, the Company
agrees that on June 1 in each year, commencing June 1, 2004 and ending June 1,
2007, both inclusive, it will prepay and apply and there shall become due and
payable on the principal Indebtedness evidenced by the Series B Notes an amount
equal to the lesser of (1) $5,000,000 or (2) the principal amount of the
Series B Notes then outstanding. The entire remaining principal amount of the
Series B Notes shall become due and payable on June 1, 2008.
(c) No premium shall be payable in connection with any required
prepayment made pursuant to this (S)2.1.
(d) In the event that the Company shall prepay less than all of the Notes
of either series pursuant to (S)2.2, (S)5.11(B) or (S)5.11(C), such prepayments
shall be applied first to the amount scheduled to be paid on the applicable
maturity date of each Note so prepaid and then to the remaining scheduled
principal payments with respect to each such Note, pro rata, in inverse
chronological order.
Section 2.2. Optional Prepayment with Premium. In addition to the
payments required by (S)2.1, upon compliance with (S)2.3, the Company shall have
the privilege, at any time and from time to time of prepaying the outstanding
Notes, either in whole or in part (but if in part then against each series of
Notes in proportion to the aggregate principal amount outstanding of each series
and in a minimum principal amount of $2,000,000), by payment of the principal
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amount of the Notes, or portion thereof to be prepaid, and accrued interest
thereon to the date of such prepayment, together with a premium equal to the
Make-Whole Amount, determined as of two Business Days prior to the date of such
prepayment pursuant to this (S)2.2.
Section 2.3. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to (S)2.2 to each holder thereof
not less than 30 days nor more than 60 days before the date fixed for such
optional prepayment specifying (a) such date, (b) the principal amount of the
holder's Notes to be prepaid on such date, (c) the aggregate principal amount of
all Notes to be prepaid on such date, (d) that a premium may be payable, (e) the
date when such premium will be calculated, (f) the estimated premium, together
with a reasonably detailed computation of such estimated premium, and (g) the
accrued interest applicable to the prepayment. Such notice of prepayment shall
also certify all facts, if any, which are conditions precedent to any such
prepayment. Notice of prepayment having been so given, the aggregate principal
amount of the Notes specified in such notice, together with accrued interest
thereon and the premium, if any, payable with respect thereto shall become due
and payable on the prepayment date specified in said notice. Two Business Days
prior to the prepayment date specified in such notice, the Company shall provide
each holder of a Note written notice of the premium, if any, payable in
connection with such prepayment and, whether or not any premium is payable, a
reasonably detailed computation of the Make-Whole Amount.
Section 2.4. Application of Prepayments. All partial prepayments
pursuant to (S)2.2 shall be: (a) allocated between each series of Notes in
proportion to the aggregate principal amount outstanding of both such series of
Notes, (b) allocated pro rata among all of the holders of each such series of
the Notes at the time outstanding based upon the aggregate principal amount
Notes then held by each such holder, and (c) applied on each outstanding Note of
such holder in the manner described in (S)2.1(D). All required prepayments
pursuant to (S)2.1(A) or (B) shall be: (a) applied on the series of Notes in
respect of which such required prepayment is being made and (b) allocated pro
rata among all of the holders of such series of Notes at the time outstanding
based upon the aggregate principal amount Notes then held by each such holder.
All prepayments pursuant to (S)5.11(B) or (S)5.11(C) shall be allocated as
therein provided and applied on each outstanding Note to be prepaid in the
manner described in (S)2.1(D).
Section 2.5. Direct Payment. Notwithstanding anything to the contrary
contained in this Agreement or the Notes, in the case of any Note owned by you
or your nominee or owned by any subsequent Institutional Holder which has given
written notice to the Company requesting that the provisions of this (S)2.5
shall apply, the Company will punctually pay when due, including at maturity,
the principal thereof, interest thereon and premium, if any, due with respect to
said principal, without any presentment thereof, directly to you, to your
nominee or to such subsequent Institutional Holder at your address or your
nominee's address set forth in Schedule I hereto or such other address as you,
your nominee or such subsequent Institutional Holder may from time to time
designate in writing to the Company or, if a bank account with a United States
bank is designated for you or your nominee on Schedule I hereto or in any
written notice to the Company from you, from your nominee or from any such
subsequent Institutional Holder, the Company will make such payments in
immediately available funds to such bank account, no later than 11:00 a.m. New
York, New York time on the date due, marked for
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attention as indicated, or in such other manner or to such other account in any
United States bank as you, your nominee or any such subsequent Institutional
Holder may from time to time direct in writing. If for any reason whatsoever the
Company does not make any such payment by such 11:00 a.m. transmittal time, such
payment shall be deemed to have been made on the next following Business Day and
such payment shall bear interest at the Overdue Rate.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company represents
and warrants that all representations and warranties set forth in Exhibit B are
true and correct as of the date hereof and are incorporated herein by reference
with the same force and effect as though herein set forth in full.
Section 3.2. Representations of the Purchaser. (a) You represent, and in
entering into this Agreement the Company understands, that you are acquiring the
Notes for the purpose of investment and not with a view to the distribution
thereof, and that you have no present intention of selling, negotiating or
otherwise disposing of the Notes; it being understood, however, that the
disposition of your property shall at all times be and remain within your
control. Without limiting the foregoing, you agree that you will not resell the
Notes purchased by you to a Person which you are aware is a Competitor.
(b) You further represent that at least one of the following statements
concerning each source of funds to be used by you to purchase the Notes is
accurate as of the Closing Date:
(1) the source of funds to be used by you to pay the purchase price of
the Notes is an "insurance company general account" within the meaning of
Department of Labor Prohibited Transaction Exemption ("PTE") 95-60 (issued
July 12, 1995) and there is no employee benefit plan, treating as a single
plan, all plans maintained by the same employer or employee organization,
with respect to which the amount of the general account reserves and
liabilities for all contracts held by or on behalf of such plan, exceed ten
percent (10%) of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth in
the NAIC Annual Statement filed with your state of domicile;
(2) all or a part of such funds constitute assets of one or more
separate accounts, trusts or a commingled pension trust maintained by you,
and you have disclosed to the Company the names of such employee benefit
plans whose assets in such separate account or accounts or pension trusts
exceed 10% of the total assets or are expected to exceed 10% of the total
assets of such account or accounts or trusts as of the date of such
purchase (for the purpose of this clause (2), all employee benefit plans
maintained by the same employer or employee organization are deemed to be a
single plan);
(3) all or part of such funds constitute assets of a bank collective
investment fund maintained by you, and you have disclosed to the Company
the names of such employee benefit plans whose assets in such collective
investment fund exceed 10% of
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the total assets or are expected to exceed 10% of the total assets of such
fund as of the date of such purchase (for the purpose of this clause (3),
all employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
(4) all or part of such funds constitute assets of one or more
employee benefit plans, each of which has been identified to the Company in
writing;
(5) you are acquiring the Notes for the account of one or more pension
funds, trust funds or agency accounts, each of which is a "governmental
plan" as defined in Section 3(32) of ERISA;
(6) the source of funds is an "investment fund" managed by a
"qualified professional asset manager" or "QPAM" (as defined in Part V of
PTE 84-14, issued March 13, 1984), provided that no other party to the
transactions described in this Agreement and no "affiliate" of such other
party (as defined in Section V(c) of PTE 84-14) has at this time, and
during the immediately preceding one year has exercised the authority to
appoint or terminate said QPAM as manager of the assets of any plan
identified in writing pursuant to this clause (6) or to negotiate the terms
of said QPAM's management agreement on behalf of any such identified plans;
or
(7) if you are other than an insurance company, all or a portion of
such funds consists of funds which do not constitute "plan assets".
The Company shall deliver a certificate on the Closing Date which
certificate shall either state that (i) it is neither a "party in interest" (as
defined in Title I, Section 3(14) of ERISA) nor a "disqualified person" (as
defined in Section 4975(e)(2) of the Internal Revenue Code of 1986, as amended),
with respect to any plan identified pursuant to paragraphs (2), (3) or (4)
above, or (ii) with respect to any plan identified pursuant to paragraph (6)
above, neither it nor any "affiliate" (as defined in Section V(c) of PTE 84-14)
is described in the proviso to said paragraph (6). As used in this Section
3.2(b), the terms "separate account", "employer securities", and "employee
benefit plan" shall have the respective meanings assigned to them in ERISA and
the term "plan assets" shall have the meaning assigned to it in Department of
Labor Regulation 29 C.F.R. (S)2510.3-101.
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. Your obligation to purchase the Notes on the
Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or prior
to the time of delivery of the Notes and to the following further conditions
precedent:
(a) Company's Closing Certificate. Concurrently with the delivery of
the Notes to you on the Closing Date, you shall have received a certificate
dated such Closing Date, signed by the President, a Vice President or
another authorized Responsible Officer of the
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Company, the truth and accuracy of which shall be a condition to your
obligation to purchase the Notes proposed to be sold to you and to the
effect that (1) the representations and warranties of the Company set forth
in Exhibit B hereto are true and correct on and with respect to such
Closing Date, (2) the Company has performed all of its obligations
hereunder which are to be performed on or prior to such Closing Date, and
(3) no Default or Event of Default has occurred and is continuing.
(b) Subsidiary Guarantors' Closing Certificate. Concurrently with
the delivery of the Notes to you on the Closing Date, you shall have
received a certificate dated the Closing Date, signed by the President, a
Vice President or another authorized Responsible Officer of each of the
Subsidiary Guarantors, the truth and accuracy of which shall be a condition
to your obligation to purchase the Notes proposed to be sold to you and to
the effect that (1) the representations and warranties of such Subsidiary
Guarantor contained in the Subsidiary Guaranty to which it is a party are
true and correct on and with respect to such Closing Date and (2) no
Default or Event of Default has occurred and is continuing.
(c) Legal Opinions. You shall have received from Chapman and
Cutler, who are acting as your special counsel in this transaction, from
Kirkland & Ellis, Illinois counsel for the Company and from Varnum,
Riddering, Schmidt & Howlett, Michigan counsel to the Company, their
respective opinions dated such Closing Date, in form and substance
satisfactory to you, and covering the matters set forth in Exhibits D and
E, respectively, hereto.
(d) Corporate Existence and Authority. On or prior to the Closing
Date, you shall have received, in form and substance reasonably
satisfactory to you and your special counsel, such documents and evidence
with respect to the Company and each of the Subsidiary Guarantors as you
may reasonably request in order to establish the existence and good
standing of the Company and each of such Subsidiary Guarantors and the
authorization of the transactions contemplated by this Agreement and the
Subsidiary Guaranties.
(e) Certain Agreements. The Credit Agreement, the Intercreditor
Agreement, the Collateral Documents and the Tower Automotive Letter
Agreement shall be in form and substance satisfactory to you and your
special counsel, shall have been duly executed and delivered by the parties
thereto and shall be in full force and effect and you shall have received
true, correct and complete copies thereof.
(f) Subsidiary Guaranties. On the Closing Date, each of the
Subsidiary Guaranties shall be in form and substance satisfactory to you
and your special counsel, shall have been duly executed and delivered by
each of the Subsidiary Guarantors and shall be in full force and effect and
you shall have received true, correct and complete copies thereof.
(g) Filing and Recording. The Collateral Documents (and/or financing
statements or similar notices thereof if and to the extent permitted or
required by
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applicable law) shall have been recorded or filed for record in
such public offices as may be deemed necessary or appropriate by you or
your special counsel in order to perfect the Liens and security interests
granted or conveyed thereby.
(h) MascoTech Acquisition. On or prior to the Closing Date, the
Company shall have consummated the acquisition of MascoTech pursuant
to the Acquisition Agreement for a purchase price of approximately
$55,000,000 in cash, $5,000,000 evidenced by a promissory note,
785,000 shares of Tower Automotive common stock, warrants to purchase
an additional 200,000 shares of Tower Automotive common stock and up
to an additional $25,000,000 payable in the event certain performance
goals are achieved by MascoTech or its corporate successor, and
otherwise on terms and conditions satisfactory to you and your special
counsel, and you shall have received such documents and evidence as
you or your special counsel may reasonably request demonstrating that
MascoTech is a Wholly-owned Subsidiary of the Company.
(i) Related Transactions. The Company shall have consummated the
sale of the entire principal amount of the Notes scheduled to be sold on
the Closing Date pursuant to this Agreement and the other agreements
referred to in (S)1.3.
(j) Private Placement Number. On or prior to the Closing Date,
special counsel to the Purchasers shall have duly made the appropriate
filings with Standard & Poor's CUSIP Service Bureau, as agent for the
National Association of Insurance Commissioners, in order to obtain a
private placement number for the Notes.
(k) Funding Instructions. At least two Business Days prior to the
Closing Date, you shall have received written instructions executed by a
Responsible Officer of the Company directing the manner of the payment of
funds and setting forth (1) the name and address of the transferee bank,
(2) such transferee bank's ABA number, (3) the account name and number into
which the purchase price for the Notes is to be deposited, and (4) the name
and telephone number of the account representative responsible for
verifying receipt of such funds.
(l) Special Counsel Fees. Concurrently with the delivery of the
Notes to you on the Closing Date, the charges and disbursements of Chapman
and Cutler, your special counsel, shall have been paid by the Company in
the amount reflected in a statement of such counsel rendered to the Company
at least one Business Day prior to the Closing Date.
(m) Legality of Investment. The Notes to be purchased by you shall
be a legal investment for you under the laws of each jurisdiction to which
you may be subject (without resort to any so-called "basket provisions" to
such laws).
(n) Satisfactory Proceedings. All proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents
necessary to the consummation thereof, shall be satisfactory in form and
substance to you and your special counsel, and you shall have received a
copy (executed or certified as may be appropriate)
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of all legal documents or proceedings taken in connection with the
consummation of said transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date the Company
fails to tender to you the Notes to be issued to you on such date or if the
conditions specified in (S)4.1 have not been fulfilled, you may thereupon elect
to be relieved of all further obligations under this Agreement. Without limiting
the foregoing, if the conditions specified in (S)4.1 have not been fulfilled,
you may waive compliance by the Company with any such condition to such extent
as you may in your sole discretion determine. Nothing in this (S)4.2 shall
operate to relieve the Company of any of its obligations hereunder or to waive
any of your rights against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will preserve
and keep in full force and effect and will cause each Restricted Subsidiary to
preserve and keep in full force and effect, its corporate existence and all
licenses and permits necessary to the proper conduct of its business, provided
that the foregoing shall not prevent any transaction permitted by (S)5.11.
Section 5.2. Insurance. The Company will maintain, and will cause
each Restricted Subsidiary to maintain, insurance coverage by financially sound
and reputable insurers and in such forms and amounts and against such risks as
are customary for corporations of established reputation engaged in the same or
a similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials; Compliance with Laws.
(a) The Company will promptly pay and discharge, and will cause each Restricted
Subsidiary to pay and discharge, all lawful taxes, assessments and governmental
charges or levies imposed upon the Company or such Restricted Subsidiary,
respectively, or upon or in respect of all or any part of the property or
business of the Company or such Restricted Subsidiary, all trade accounts
payable in accordance with usual and customary business terms, and all claims
for work, labor or materials, which have become due and payable and which if
unpaid might become a Lien upon any property of the Company or such Restricted
Subsidiary; provided the Company or such Restricted Subsidiary shall not be
required to pay any such tax, assessment, charge, levy, account payable or claim
if (1) the validity, applicability or amount thereof is being contested in good
faith by appropriate actions or proceedings which will prevent the forfeiture or
sale of any property of the Company or such Restricted Subsidiary or any
material interference with the use thereof by the Company or such Restricted
Subsidiary, and (2) the Company or such Restricted Subsidiary has set aside on
its books, reserves deemed by it to be adequate with respect thereto.
(b) The Company will promptly comply and will cause each Restricted
Subsidiary to promptly comply with all laws, ordinances or governmental rules
and regulations to which it is
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subject, including, without limitation, the Occupational Safety and Health Act
of 1970, as amended, ERISA and all Environmental Laws, the violation of which:
(1) could materially and adversely affect the properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its Restricted
Subsidiaries, taken as a whole, or (2) would result in any Lien not permitted
under (S)5.9.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve and
keep, and will cause each Restricted Subsidiary to maintain, preserve and keep,
its properties which are used or useful in the conduct of its business (whether
owned in fee or a leasehold interest) in good repair and working order and from
time to time will make all necessary repairs, replacements, renewals and
additions so that at all times the efficiency thereof shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any Restricted
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Restricted Subsidiaries would be substantially changed from
the general nature of the business engaged in by the Company and its Restricted
Subsidiaries on the date of this Agreement.
Section 5.6. Consolidated Adjusted Net Worth. The Company will at all
times keep and maintain Consolidated Adjusted Net Worth at an amount not less
than the sum of (a) $80,000,000 plus (b) 50% of Consolidated Net Income computed
on a cumulative basis for each of the elapsed fiscal quarters ending after
December 31, 1995 plus (c) the first $30,000,000 actually received by the
Company as net cash proceeds from a public offering by Tower Automotive of its
common stock after the Closing Date; provided that notwithstanding that
Consolidated Net Income for any such elapsed fiscal quarter may be a deficit
figure, no reduction as a result thereof shall be made in the sum to be
maintained pursuant hereto.
Section 5.7. Fixed Charges Coverage Ratio. The Company will as at the
end of each fiscal quarter keep and maintain the ratio of Consolidated Net
Income Available for Fixed Charges for the four fiscal quarter period ending on
such date to Consolidated Fixed Charges for such four fiscal quarter period at
not less than 2.00 to 1.00.
Section 5.8. Limitations on Indebtedness. (a) The Company will not,
and will not permit any Restricted Subsidiary to, create, assume, guarantee or
otherwise incur or in any manner be or become liable in respect of any
Indebtedness, except:
(1) Funded Debt evidenced by the Notes and the Subsidiary Guaranties;
(2) Funded Debt of the Company and its Restricted Subsidiaries
outstanding as of the Closing Date and described on Schedule II hereto;
(3) Funded Debt of the Company and its Restricted Subsidiaries,
provided that at the time of creation, issuance, assumption, guarantee or
incurrence thereof and after giving effect thereto and to the application
of the proceeds thereof:
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(i) the ratio of Consolidated Funded Debt to Consolidated Total
Capitalization shall not exceed:
Ratio of Consolidated Funded Debt
During the Period to Consolidated Total Capitalization
Closing Date through .65 to 1.00
December 31, 1998
January 1, 1999 through .60 to 1.00
December 31, 2001
January 1, 2002 .55 to 1.00
and thereafter
(ii) in the case of the issuance of any Funded Debt of the
Company secured by Liens permitted by (S)5.9(J) and any Funded Debt of
a Restricted Subsidiary (A) the aggregate amount of all Indebtedness
of the Company secured by Liens permitted by (S)5.9(J) shall not
exceed 10% of Consolidated Adjusted Net Worth and (B) the aggregate
amount of all Indebtedness of Restricted Subsidiaries (other than
Specified Restricted Subsidiary Indebtedness) shall not exceed 10% of
Consolidated Adjusted Net Worth;
(4) Current Debt of the Company and its Restricted Subsidiaries,
provided that during the twelve-month period immediately preceding the date
of any determination hereunder, there shall have been a period of thirty
consecutive days during which either (i) the Company and its Restricted
Subsidiaries shall have been free of all Current Debt or (ii) the largest
aggregate principal amount of all Current Debt of the Company and its
Restricted Subsidiaries outstanding on each day of such 30-day period did
not exceed the amount of additional Funded Debt which could have been
issued or incurred by the Company and its Restricted Subsidiaries within
the applicable limitations of (S)5.8(A)(3) on each day of such period and
which Current Debt shall during each day of such 30-day period be deemed to
constitute outstanding Funded Debt for purposes of any determination of
additional Funded Debt to be issued or incurred within the applicable
limitations of said (S)5.8(A)(3); and provided further that in the case of
the issuance of any Current Debt of the Company secured by Liens permitted
by (S)5.9(J) and any Current Debt of any Restricted Subsidiary (A) the
aggregate amount of all Indebtedness secured by Liens permitted by
(S)5.9(J) shall not exceed 10% of Consolidated Adjusted Net Worth and (B)
the aggregate amount of all Indebtedness of Restricted Subsidiaries (other
than Specified Restricted Subsidiary Indebtedness) shall not exceed 10% of
Consolidated Adjusted Net Worth; and
(5) Indebtedness of a Restricted Subsidiary to the Company or to a
Wholly-owned Restricted Subsidiary.
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(b) Indebtedness permitted under (S)(S)5.8(A)(2) and (5), Specified
Restricted Subsidiary Indebtedness and other Indebtedness secured by Liens
permitted by (S)(S)5.9(H) or (I) may be renewed, extended or refunded or
replaced (without any increase in the original principal amount) without regard
to the limitations of (S)5.8(A)(3) or (4). The renewal, extension or refunding
of any other Indebtedness, issued, incurred or outstanding pursuant to (S)5.8(A)
shall constitute the issuance of additional Indebtedness which is, in turn,
subject to the limitations of the applicable provisions of this (S)5.8.
(c) Any business entity which becomes a Restricted Subsidiary after the
Closing Date shall for all purposes of this (S)5.8 be deemed to have created,
assumed or incurred at the time it becomes a Restricted Subsidiary all
Indebtedness of such business entity existing immediately after it becomes a
Restricted Subsidiary.
Section 5.9. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer to be incurred
or to exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or acquire or agree
to acquire, or permit any Restricted Subsidiary to acquire, any property or
assets pursuant to conditional sales agreements or other title retention
devices, except:
(a) Liens for property taxes and assessments or governmental charges,
provided that payment thereof is not at the time required by (S)5.3;
(b) Liens of or resulting from any judgment or award, the time for
the appeal or petition for rehearing of which shall not have expired, or in
respect of which (i) the Company or a Restricted Subsidiary shall at any
time in good faith be prosecuting an appeal or proceeding for a review,
(ii) a stay of execution pending such appeal or proceeding for review shall
have been secured, and (iii) the Company or such Restricted Subsidiary has
set aside on its books, reserves deemed by it to be adequate with respect
thereto;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including Liens in connection with worker's
compensation, unemployment insurance, social security and other like laws,
warehousemen's and attorneys' liens and statutory landlords' liens) and
Liens to secure the performance of bids, tenders or trade contracts, or to
secure statutory obligations, surety, replevin, attachment or appeal bonds
or other Liens of like general nature, in any such case incurred in the
ordinary course of business and not in connection with the borrowing of
money, provided in each case, the obligation secured is not overdue or, if
overdue, the payment or discharge of such obligation is not at the time
required by (S)5.3;
(d) (i) Liens for lessors', mechanics', carriers', workers',
warehousemen's, materialmen's or repairmen's liens and other like Liens in
the ordinary course of business and (ii) survey exceptions or encumbrances,
easements or reservations, or rights of others for rights-of-way, utilities
and other similar purposes, or zoning or other restrictions as to the use
of real properties, which do not in any event materially impair
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their use in the operation of the business of the Company and its
Restricted Subsidiaries taken as a whole;
(e) Liens securing Indebtedness of a Restricted Subsidiary to the
Company or to a Wholly-owned Restricted Subsidiary;
(f) Liens existing as of the Closing Date and described on
Schedule II hereto;
(g) Liens of the Collateral Documents ratably securing payment of
the Notes and the Indebtedness outstanding pursuant to the Credit
Agreement, unless and until such Liens are released in accordance with the
terms of this Agreement;
(h) any Lien (including Liens arising under Capitalized Leases)
created after the Closing Date to secure all or any part of the purchase
price, or to secure Indebtedness incurred or assumed to pay all or any part
of the purchase price, incurred in connection with the acquisition or
purchase of fixed assets or the cost of construction or improvements to
fixed assets, in any such case used and intended to be used in carrying on
the business of the Company or a Restricted Subsidiary; provided that
(1) any such Lien shall be confined solely to the fixed asset or fixed
assets so acquired, purchase, constructed or improved, (2) the principal
amount of the Indebtedness secured by any such Lien shall at no time exceed
an amount equal to the total acquisition or purchase price or cost of
construction or improvement, as the case may be, (3) any such Lien shall be
created or incurred not later than 180 days after the date of acquisition
or purchase or the date of completion of construction or improvement of
such fixed asset or fixed assets as the case may be, and (4) all such
Indebtedness shall be incurred within the applicable limitations provided
in (S)5.8(A)(3) or (4), as the case may be;
(i) Liens (including Liens arising under Capitalized Leases) affixed
on real or personal property (including without limitation outstanding
shares of capital stock) of any corporation at the time such corporation
becomes a Restricted Subsidiary, so long as such Lien was not incurred, or
extended or renewed in contemplation of the acquisition or purchase of such
corporation; provided that (1) any such Lien shall be confined solely to
such real or personal property, (2) the principal amount of the
Indebtedness secured by any such Lien shall at no time exceed an amount
equal to the acquisition or purchase price of such real or personal
property, and (3) all such Indebtedness shall be incurred within the
applicable limitations provided in (S)5.8(A)(3) or (4), as the case may be;
(j) Liens created or incurred after the Closing Date given to secure
Indebtedness of the Company or any Restricted Subsidiary in addition to the
Liens permitted by the preceding clauses (a) through (i) hereof, provided
that all Indebtedness secured by such Liens shall have been incurred within
the applicable limitations provided in (S)5.8(A)(3) or (4), as the case may
be; and
(k) Liens renewing, extending or refunding any Lien permitted by the
preceding clauses (a) through (i) of this (S)5.9; provided that the
principal amount of any
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Indebtedness secured by any such Lien immediately prior thereto is not
increased above the amount then outstanding and such Lien is not extended
to other property.
Section 5.10. Distributions. (a) The Company will not and the Company
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
or through any Affiliate, declare or make or incur any liability to declare or
make any Distribution, unless, immediately after giving effect to the proposed
Distribution, the aggregate amount of Distributions declared in the case of
dividends or made in the case of other Distributions during the period from and
after the date of this Agreement to and including the date of declaration in the
case of a dividend and the date of payment in the case of any other
Distribution, would not exceed the sum of:
(1) $10,000,000; plus
(2) 50% of Consolidated Net Income (or if such Consolidated Net
Income is a deficit figure, then minus 100% of such deficit) for such
period determined on a cumulative basis commencing after December 31, 1995,
to and including the last day of the fiscal quarter ended immediately
preceding the date of such declaration or payment; plus
(3) an amount equal to the aggregate net cash proceeds in excess of
$35,000,000 in the aggregate received by the Company from the sale after
March 31, 1996 of shares of Tower Automotive common stock.
(b) For the purposes of making computations under paragraph (a) of this
(S)5.10, the amount of any Distribution declared, paid or distributed in
property or assets of the Company or a Restricted Subsidiary shall be deemed to
be the greater of the book value or fair market value (as determined in good
faith by the Company's Board of Directors) of such property or assets as of the
date of declaration in the case of a dividend and the date of payment in the
case of any other Distribution.
(c) The Company will not authorize a Distribution on its Capital Stock
which is not payable within 60 days of authorization.
(d) The Company will not authorize or make a Distribution if, after
giving effect to the proposed Distribution:
(1) a Default or an Event of Default would exist; or
(2) the Company could not incur at least $1.00 of additional Funded
Debt pursuant to (S)5.8(A)(3).
(e) Anything contained in this (S)5.10 to the contrary notwithstanding,
no Restricted Subsidiary shall be deemed or construed to be prohibited from
making any Distribution to the Company.
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(f) The Company will not, and will not permit any Restricted Subsidiary
to, enter into, or suffer to exist, any agreement with any Person which
restricts or prohibits any Restricted Subsidiary from paying dividends to the
Company other than (a) this Agreement and the Credit Agreement, (b) the
agreements identified in items 2(i) and 2(j) of Part A to Schedule II to this
Agreement, (c) industrial revenue bond financing arrangements or similar
financing arrangements entered into after the Closing Date which restrict the
payment of dividends following the occurrence of an event of default thereunder.
Section 5.11. Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Restricted Subsidiary to, consolidate
with or be a party to a merger with any other business entity, or sell, lease or
otherwise dispose of all or substantially all of its assets; provided that:
(1) any Restricted Subsidiary may merge or consolidate with or into,
or sell all or substantially all of its assets to, the Company or any
Wholly-owned Restricted Subsidiary so long as in any merger, consolidation
or sale of all or substantially all of the assets of any Restricted
Subsidiary involving the Company, the Company shall be the surviving or
continuing or acquiring corporation, as the case may be;
(2) the Company may consolidate or merge with or into any other
corporation if (i) the corporation which results from such consolidation or
merger (the "surviving corporation") is organized under the laws of any
state of the United States or the District of Columbia, (ii) the due and
punctual payment of the principal of and premium, if any, and interest on
all of the Notes, according to their tenor, and the due and punctual
performance and observation of all of the covenants in the Notes, this
Agreement, the Collateral Documents and the Intercreditor Agreement to be
performed or observed by the Company are expressly assumed in writing by
the surviving corporation and the surviving corporation shall furnish to
the holders of the Notes an opinion of counsel satisfactory to such holders
to the effect that the instrument of assumption has been duly authorized,
executed and delivered and constitutes the legal, valid and binding
contract and agreement of the surviving corporation enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles, (iii) each of the Company's Restricted
Subsidiaries confirms in writing its respective obligations under and
pursuant to the Subsidiary Guaranties, and (iv) at the time of such
consolidation or merger and immediately after giving effect thereto, (A) no
Default or Event of Default would exist and (B) on a pro forma basis, the
surviving corporation would be permitted by the provisions of (S)5.8(A)(3)
to incur at least $1.00 of additional Funded Debt; or
(3) the Company may sell or otherwise dispose of all or substantially
all of its assets (other than stock of a Restricted Subsidiary and
Indebtedness of a Restricted Subsidiary owing to the Company, which may
only be sold or otherwise disposed of pursuant to (S)5.11(C)) to any Person
for consideration which represents the fair market value of such assets (as
determined in good faith by the Board of Directors of the Company) at the
time of such sale or other disposition if (i) the acquiring Person is a
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corporation organized under the laws of any state of the United States or
the District of Columbia, (ii) the due and punctual payment of the
principal of and premium, if any, and interest on all the Notes, according
to their tenor, and the due and punctual performance and observance of all
of the covenants in the Notes, this Agreement, the Collateral Documents and
the Intercreditor Agreement to be performed or observed by the Company are
expressly assumed in writing by the acquiring corporation and the acquiring
corporation shall furnish to the holders of the Notes an opinion of counsel
satisfactory to such holders to the effect that the instrument of
assumption has been duly authorized, executed and delivered and constitutes
the legal, valid and binding contract and agreement of such acquiring
corporation enforceable in accordance with its terms, except as enforcement
of such terms may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles, (iii) each of the Company's
Restricted Subsidiaries confirms in writing its respective obligations
under and pursuant to the Subsidiary Guaranties, and (iv) at the time of
such sale or disposition and immediately after giving effect thereto, (A)
no Default or Event of Default would exist and (B) on a pro forma basis,
the acquiring corporation would be permitted by the provisions of
(S)5.8(A)(3) to incur at least $1.00 of additional Funded Debt.
(b) The Company will not, and will not permit any Restricted Subsidiary
to, sell, lease, transfer, abandon or otherwise dispose of assets (except stock
of a Restricted Subsidiary and Indebtedness of the Company or a Restricted
Subsidiary owing to the Company or a Restricted Subsidiary, which may only be
sold or otherwise disposed of pursuant to (S)5.11(C) or except assets sold in
the ordinary course of business for fair market value or except as provided in
(S)5.11(A)(3)); provided that the foregoing restrictions do not apply to:
(1) the sale, lease, transfer or other disposition of assets of a
Restricted Subsidiary to the Company or a Wholly-owned Restricted
Subsidiary; or
(2) the sale of assets of the Company or of a Restricted Subsidiary,
provided that (i) the same such assets are leased by the Company or a
Restricted Subsidiary, in any such case as lessee, within 180 days of the
date of acquisition or completion of construction of such assets by the
Company or such Restricted Subsidiary, (ii) immediately after the
consummation of such sale and after giving effect thereto, no Default or
Event of Default would exist, and (iii) the Company would be permitted by
the provisions of (S)5.8(A)(3) to incur at least $1 of additional Funded
Debt; or
(3) the sale of assets for cash or other property to a Person or
Persons if all of the following conditions are met:
(i) such assets (valued at current book value) do not, together
with all other assets of the Company and its Restricted Subsidiaries
previously disposed of during the same fiscal year (other than in the
ordinary course of business), exceed 10% of Consolidated Total Assets,
determined as of the end of the immediately preceding fiscal year;
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(ii) in the opinion of the Company's Board of Directors, the sale
is for fair value and is in the best interests of the Company; and
(iii) immediately after the consummation of the transaction
and after giving effect thereto, (A) no Default or Event of Default
would exist, and (B) the Company would be permitted by the provisions
of (S)5.8(A)(3) to incur at least $1.00 of additional Funded Debt;
provided, however, that for purposes of the foregoing calculation, there
shall not be included any assets the proceeds of which were or are applied
within 180 days of the date of sale of such assets to either (A) the
acquisition of assets (including any Capital Stock of any entity which
becomes a Restricted Subsidiary pursuant to such acquisition) intended to
be used in the operation of the business of the Company and its Restricted
Subsidiaries as described in (S)5.5 and having a fair market value (as
determined in good faith by the Board of Directors of the Company) at least
equal to that of the assets so disposed of or (B) offered on a pro-rata
basis towards the prepayment at par of Senior Funded Debt (including,
without limitation, the Notes) of the Company ranking pari passu with the
Notes or (C) a combination of (A) and (B) above. It is understood and
agreed by the Company and each holder of the Notes by its acceptance
thereof that any such holder may decline any such offer of prepayment, that
the failure of any such holder to accept or decline any such offer of
prepayment shall be deemed to be an election by such holder to decline such
prepayment, and that if any such offer is so accepted, the proceeds so
offered towards the prepayment of the Notes and accepted may be prepaid at
par notwithstanding the provisions of (S)2.2.
The designation of a Restricted Subsidiary as an Unrestricted Subsidiary
shall be deemed and construed to constitute a sale of assets by the Company to
be consummated within the limitations provided in clause (3) of this (S)5.11(B).
Computations pursuant to this (S)5.11(B) shall include dispositions made
pursuant to (S)5.11(C) and computations pursuant to (S)5.11(C) shall include
dispositions made pursuant to this (S)5.11(B).
(c) The Company will not, and will not permit any Restricted Subsidiary
to, sell, pledge or otherwise dispose of any shares of common stock (including
as "common stock" for the purposes of this (S)5.11(C) any options or warrants to
purchase stock or other Securities exchangeable for or convertible into common
stock of the Company or any Restricted Subsidiary) of a Restricted Subsidiary
(said stock, options, warrants and other Securities herein called "Subsidiary
Stock") or sell or otherwise transfer any Indebtedness of the Company or of a
Restricted Subsidiary, nor will any Restricted Subsidiary issue, sell, pledge or
otherwise dispose of any shares of its own Subsidiary Stock, provided that the
foregoing restrictions do not apply to:
(1) the issue of directors' qualifying shares; or
(2) the issue of Subsidiary Stock to the Company or any Wholly-owned
Restricted Subsidiary; or
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(3) the sale or other disposition at any one time to a Person of the
entire Investment of the Company and its other Restricted Subsidiaries in
any Restricted Subsidiary if all of the following conditions are met:
(i) the assets (valued at current book value) of such Restricted
Subsidiary so sold or otherwise disposed of do not, together with all
other assets of the Company and its Restricted Subsidiaries previously
disposed of during the same fiscal year (other than in the ordinary
course of business), exceed 10% of Consolidated Total Assets,
determined as of the end of the immediately preceding fiscal year;
(ii) in the opinion of the Company's Board of Directors, the
sale is for fair value and is in the best interests of the Company;
(iii) immediately after the consummation of the transaction
and after giving effect thereto, such Restricted Subsidiary shall hold
no Indebtedness of, nor shall it have a continuing Investment in the
Capital Stock of, the Company or of any Restricted Subsidiary and any
such Indebtedness or Investment shall have been discharged in full or
acquired in its entirety, as the case may be, by the Company or a
Restricted Subsidiary; and
(iv) immediately after the consummation of the transaction and
after giving effect thereto, (A) no Default or Event of Default would
exist, and (B) the Company would be permitted by the provisions of
(S)5.8(A)(3) to incur at least $1.00 of additional Funded Debt; or
(4) the sale or other transfer in its entirety of Indebtedness of the
Company or a Restricted Subsidiary owing to a Restricted Subsidiary by such
Restricted Subsidiary to the Company or another Wholly-owned Restricted
Subsidiary;
provided, however, that for purposes of the foregoing calculation, there
shall not be included any assets the proceeds of which were or are applied
within 180 days of the date of sale of such assets to either (A) the
acquisition of assets (including any Capital Stock of any entity which
becomes a Restricted Subsidiary pursuant to such acquisition) intended to
be used in the operation of the business of the Company and its Restricted
Subsidiaries as described in (S)5.5 and having a fair market value (as
determined in good faith by the Board of Directors of the Company) at least
equal to that of the assets so disposed of or (B) offered on a pro-rata
basis towards the prepayment at par of Senior Funded Debt (including,
without limitation, the Notes) of the Company ranking pari passu with the
Notes or (C) a combination of (A) and (B) above. It is understood and
agreed by the Company and each holder of the Notes by its acceptance
thereof that any such holder may decline any such offer of prepayment, that
the failure of any such holder to accept or decline any such offer of
prepayment shall be deemed to be an election by such holder to decline such
prepayment, and that if any such offer is so accepted, the proceeds so
offered towards the prepayment of the Notes and accepted may be prepaid at
par notwithstanding the provisions of (S)2.2.
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Computations pursuant to this (S)5.11(C) shall include dispositions made
pursuant to (S)5.11(B) and computations pursuant to (S)5.11(B) shall include
dispositions made pursuant to this (S)5.11(C).
Section 5.12. Repurchase of Notes. Except as provided in (S)2.2,
(S)5.11(B) and (S)5.11(C), neither the Company nor any Restricted Subsidiary or
Affiliate, directly or indirectly, may repurchase or make any offer to
repurchase any Notes.
Section 5.13. Transactions with Affiliates. The Company will not,
and will not permit any Restricted Subsidiary to, enter into or be a party to
any transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), except pursuant to the
reasonable requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Restricted Subsidiary than would obtain in a comparable arm's-length
transaction with a Person other than an Affiliate; provided, that nothing
contained in this (S)5.13 shall be deemed or construed to prohibit the Company
from paying reasonable fees and expenses to Hidden Creek Industries, a New York
partnership, for the rendering of financial and consulting services to the
Company in an amount not to exceed $2,000,000 in any fiscal year.
Section 5.14. Withdrawal from Multiemployer Plans and Termination of
Pension Plans. The Company will not and will not permit any Subsidiary to
withdraw from any Multiemployer Plan or permit any employee benefit plan
maintained by it to be terminated if such withdrawal or termination could result
in withdrawal liability (as described in Part 1 of Subtitle E of Title IV of
ERISA) or the imposition of a Lien on any property of the Company or any
Subsidiary pursuant to Section 4068 of ERISA either of which could reasonably be
expected to result in liability to the Company in excess of $5,000,000 in the
aggregate.
Section 5.15. Reports and Rights of Inspection. The Company will
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full and correct entries will be made of all dealings or transactions
of, or in relation to, the business and affairs of the Company or such
Subsidiary, in accordance with GAAP consistently applied (except for changes
disclosed in the financial statements furnished to you pursuant to this (S)5.15
and concurred in by the independent public accountants referred to in
(S)5.15(B)), and will or will arrange for Tower Automotive to furnish to you so
long as you are the holder of any Note and to each other Institutional Holder of
the then outstanding Notes (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in any event
within 45 days after the end of each quarterly fiscal period (except
the last) of each fiscal year, copies of:
(1) a consolidated balance sheet of Tower Automotive
and its consolidated Subsidiaries as of the close of such quarterly
fiscal period, setting forth in comparative form the consolidated
figures for the fiscal year then most recently ended,
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(2) a consolidated statement of operations of Tower Automotive
and its consolidated Subsidiaries for such quarterly fiscal period
and for the portion of the fiscal year ending with such quarterly
fiscal period, in each case setting forth in comparative form the
consolidated figures for the corresponding periods of the
preceding fiscal year, and
(3) a consolidated statement of cash flows of Tower Automotive
and its consolidated Subsidiaries for the portion of the fiscal
year ending with such quarterly fiscal period, setting forth in
comparative form the consolidated figures for the corresponding
period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct by an authorized
financial officer of the Company;
(b) Annual Statements. As soon as available and in any event within
90 days after the close of each fiscal year of Tower Automotive, copies
of:
(1) a consolidated balance sheet of Tower Automotive
and its consolidated Subsidiaries as of the close of such fiscal
year, and
(2) consolidated statements of operations, shareholders'
investment and cash flows of Tower Automotive and its consolidated
Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated figures for the
preceding fiscal year, all in reasonable detail and accompanied by a report
thereon of a firm of independent public accountants of recognized national
standing selected by Tower Automotive to the effect that the consolidated
financial statements present fairly, in all material respects, the consolidated
financial position of Tower Automotive and its consolidated Subsidiaries as of
the end of the fiscal year being reported on and the consolidated results of the
operations and cash flows for said year in conformity with GAAP and that the
examination of such accountants in connection with such financial statements has
been conducted in accordance with generally accepted auditing standards and
included such tests of the accounting records and such other auditing procedures
as said accountants deemed necessary in the circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of
Tower Automotive, the Company or any Restricted Subsidiary and any management
letter received from such accountants;
(d) Commission and Other Reports. Promptly upon their becoming
available and in any event within 15 days of being filed, one copy of each
financial statement, report, notice or proxy statement sent by Tower
Automotive or the Company to its creditors or stockholders and of each
regular or periodic report (including, without limitation, each periodic
report on Form 8-K), and any registration statement or
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prospectus filed by Tower Automotive or the Company or any Restricted Subsidiary
with any securities exchange or the Commission or any successor agency, and
copies of any orders in any material proceedings to which Tower Automotive or
the Company or any Restricted Subsidiary is a party, issued by any governmental
agency, Federal or state, having jurisdiction over Tower Automotive or the
Company or any Restricted Subsidiary;
(e) ERISA Reports. Promptly upon the occurrence thereof, written
notice of (1) a Reportable Event with respect to any Plan; (2) the institution
of any steps by the Company, any ERISA Affiliate, the PBGC or any other Person
to terminate any Plan; (3) the institution of any steps by the Company or any
ERISA Affiliate to withdraw from any Plan; (4) a non-exempt "prohibited
transaction" within the meaning of Section 406 of ERISA in connection with any
Plan; (5) any material increase in the contingent liability of the Company or
any Restricted Subsidiary with respect to any post-retirement welfare liability;
or (6) the taking of any action by, or the threatening of the taking of any
action by, the Internal Revenue Service, the Department of Labor or the PBGC
with respect to any of the foregoing;
(f) Officer's Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of the chief financial officer of
the Company stating that such officer has reviewed the provisions of this
Agreement and: (1) setting forth the information and computations (in sufficient
detail) required in order to establish whether the Company was in compliance
with the requirements of (S)(S)5.6 through 5.11 at the end of the period covered
by the financial statements then being furnished, (2) setting forth a list of
the Company's Unrestricted Subsidiaries, (3) stating whether there existed as of
the date of such financial statements and whether, to the best of such officer's
knowledge, there exists on the date of the certificate or existed at any time
during the period covered by such financial statements any Default or Event of
Default and, if any such condition or event exists on the date of the
certificate, specifying the nature and period of existence thereof and the
action the Company is taking and proposes to take with respect thereto, and (4)
demonstrating to the reasonable satisfaction of the holders of at least 51% in
aggregate principal amount of outstanding Notes that the financial statements
which are the subject of such certificate are substantially similar in all
material respects to the financial statements of the Company and its Restricted
Subsidiaries and if for any reason whatsoever the chief financial officer of the
Company is not able to satisfy the requirements of this (S)5.15(F)(4), then and
in such event the Company shall within the respective periods provided in
paragraphs (a) and (b) above, furnish to the holders of the Notes financial
statements of the character and for the dates and periods as in said paragraphs
(a) and (b) provided on the basis of the Company and its Restricted Subsidiaries
and, in the case of financial statements provided pursuant to paragraph (a)
above, certified as correct and complete by an authorized officer of the
Company, and in the case of financial statements provided pursuant to paragraph
(b) above, accompanied by a report thereon of a firm of independent public
accountants of recognized national standing selected by the Company to the
effect that the consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Company and its
Restricted Subsidiaries as of the end of the fiscal year being reported on and
the consolidated results of the operations and cash flows for said year in
conformity with
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GAAP and that the examination of such accountants in connection with such
financial statements has been conducted in accordance with generally accepted
auditing standards and included such tests of the accounting records and such
other auditing procedures as said accountants deemed necessary in the
circumstances;
(g) Accountant's Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an opinion with
respect to such financial statements, stating that they have reviewed this
Agreement and stating further whether, in making their audit, such accountants
have become aware of any Default or Event of Default under any of the terms or
provisions of this Agreement insofar as any such terms or provisions pertain to
or involve accounting matters or determinations, and if any such condition or
event then exists, specifying the nature and period of existence thereof;
(h) Unrestricted Subsidiaries; Tower Automotive. If at any time
either (1) any Unrestricted Subsidiary individually or Unrestricted Subsidiaries
collectively have assets equal to or exceeding 10% of Consolidated Total Assets
or contribute operating income (determined in accordance with GAAP) equal to or
greater than 10% of operating income of the Company and its Restricted
Subsidiaries, or (2) Tower Automotive and its subsidiaries (other than the
Company and its Subsidiaries), individually or collectively, have assets equal
to or exceeding 10% of consolidated total assets (determined in accordance with
GAAP) of Tower Automotive and its consolidated subsidiaries or contribute
operating income (determined in accordance with GAAP) equal to or greater than
10% of the operating income of Tower Automotive and its consolidated
subsidiaries, then and in either such event the Company shall within the
respective periods provided in paragraphs (a) and (b) above, furnish to the
holders of the Notes financial statements of the character and for the dates and
periods as in said paragraphs (a) and (b) provided on the basis of the Company
and its Restricted Subsidiaries and in the case of financial statements provided
pursuant to paragraph (a) above, certified as correct and complete by an
authorized officer of the Company, and in the case of financial statements
provided pursuant to paragraph (b) above, accompanied by a report thereon of a
firm of independent public accountants of recognized national standing selected
by the Company to the effect that the consolidated financial statements present
fairly, in all material respects, the consolidated financial position of the
Company and its Restricted Subsidiaries as of the end of the fiscal year being
reported on and the consolidated results of the operations and cash flows for
said year in conformity with GAAP and that the examination of such accountants
in connection with such financial statements has been conducted in accordance
with generally accepted auditing standards and included such tests of the
accounting records and such other auditing procedures as said accountants deemed
necessary in the circumstances;
(i) Designation of Subsidiaries. Promptly after the designation of
any Restricted Subsidiary as an Unrestricted Subsidiary or the designation of
any Unrestricted Subsidiary as a Restricted Subsidiary, in either case as set
forth in (S)5.17, a copy of the resolution effecting such designation duly
certified by the Secretary or an Assistant Secretary of the Company, together
with a certificate of a Responsible Officer setting
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forth in reasonable detail all facts and computations required in order to
establish that such designation was effective and is permitted by the terms
of this Agreement; and
(j) Requested Information. With reasonable promptness, such other
data and information as you or any such Institutional Holder may reasonably
request.
Without limiting the foregoing, the Company will permit you, so long as you are
the holder of any Note, and each Institutional Holder of the then outstanding
Notes (or such Persons as either you or such Institutional Holder may
designate), to visit and inspect, under the Company's guidance, any of the
properties of the Company or any Restricted Subsidiary, to examine all of their
books of account, records, reports and other papers, to make copies and extracts
therefrom and to discuss their respective affairs, finances and accounts with
their respective officers, employees, and independent public accountants (and by
this provision the Company authorizes said accountants to discuss with you the
finances and affairs of the Company and its Restricted Subsidiaries), all at
such reasonable times and as often as may be reasonably requested. You or such
Institutional Holder, as the case may be, shall pay your or its out-of-pocket
expenses in connection with any such visitation, unless a Default or Event of
Default shall have occurred and be continuing or the holder of any Note or of
any other evidence of Indebtedness of the Company or any Restricted Subsidiary
gives any written notice with respect to a claimed default relating to non-
payment or breach of any business or financial covenant, in which case, any such
visitation or inspection shall be at the sole expense of the Company.
Section 5.16. Guaranty by Subsidiaries . Subject to (S)1.6(B), the
Company will cause each Subsidiary which becomes a Domestic Restricted
Subsidiary after the Closing Date to enter into a Subsidiary Guaranty within 10
days thereafter, and will cause each other Subsidiary which delivers a Guaranty
to the Bank Lenders pursuant to the requirements of the Credit Agreement to
concurrently enter into a Subsidiary Guaranty, and in connection with the
foregoing shall deliver to each of the holders of the Notes the following items:
(a) an executed counterpart of such Subsidiary Guaranty or joinder
agreement in respect of an existing Subsidiary Guaranty, as
appropriate;
(b) a certificate signed by the President, a Vice President or
another authorized Responsible Officer of such Subsidiary to the effect
that the representations and warranties of such Subsidiary contained in the
Subsidiary Guaranty to which it is a party are true and correct on and as
of the date of execution thereof;
(c) such documents and evidence with respect to such Subsidiary as
any holder of the Notes may reasonably request in order to establish the
existence and good standing of such Subsidiary and the authorization of the
transactions contemplated by such Subsidiary Guaranty; and
(d) an opinion of counsel satisfactory to such holders to the effect
that such Subsidiary Guaranty has been duly authorized, executed and
delivered and constitutes the legal, valid and binding contract and
agreement of such Subsidiary enforceable in accordance with its terms,
except as an enforcement of such terms may be limited by
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bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
Section 5.17. Designation of Subsidiaries. The Company may
designate any Restricted Subsidiary as an Unrestricted Subsidiary and may
designate any Unrestricted Subsidiary as a Restricted Subsidiary, provided that:
(a) the Company shall have given not less than 15 days prior written notice to
the holders of the Notes that the Board of Directors of the Company has made
such determination, (b) at the time of such designation and immediately after
giving effect thereto: (1) no Default or Event of Default would exist and
(2) the Company would be permitted by the provisions of (S)5.8(A)(3) to incur at
least $1 of additional Funded Debt, (c) in the case of the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary, such Restricted Subsidiary
shall not at any time after the date of this Agreement have previously been
designated as an Unrestricted Subsidiary, (d) in the case of the designation of
an Unrestricted Subsidiary as a Restricted Subsidiary, such Unrestricted
Subsidiary shall not at any time after the date of this Agreement have
previously been designated as a Restricted Subsidiary, and (e) in the case of
the designation of a Restricted Subsidiary as an Unrestricted Subsidiary, such
designation shall be treated as the sale or other disposition of assets which
shall be consummated within the limitations of clause (3) of (S)5.11(B).
Section 5.18. Limitation on Restrictive Agreements. The Company will
not, and will not permit any Restricted Subsidiary to, enter into, or suffer to
exist, any agreement with any Person which in any way restricts or limits the
ability of the Company to amend, modify, supplement or otherwise alter the terms
applicable to the Notes or this Agreement.
Section 5.19. Undertakings Relating to Collateral Documents and
Subsidiary Guaranties. Subject to the provisions of (S)1.6, (a) on or before
September 1, 1996, the Company shall, and shall cause each of its Restricted
Subsidiaries, the Collateral Agent and the Banks Lenders to, deliver to the
holders of the Notes executed copies of each of the Security Agreements and
Mortgages described in (S)1.5 which were not delivered on the Closing Date, or
amendments to such Security Agreements and Mortgages reasonably satisfactory to
the holders of the Notes, in order to secure the obligations of the Company
under the Note Agreements and the Notes on an equal and ratable basis with the
obligations of the Company under the Credit Agreement and shall file for record
in the appropriate recording offices the Mortgages and all Uniform Commercial
Code Financing Statements required by you or your special counsel in order to
perfect such security interests in the collateral described therein. The
Company shall deliver, or shall cause to be delivered, such certificates,
endorsements to title policies, representations and warranties, legal opinions
and other showings reasonably required by you or your special counsel with
respect to the execution and delivery of such Security Agreements and Mortgages
and the recording of such Mortgages and Uniform Commercial Code Financing
Statements;
(b) (1) on or before July 1, 1996, the Company will cause MascoTech to
deliver to the holders of the Notes a Subsidiary Guaranty (or joinder agreement
with respect to the existing Subsidiary Guaranty) in favor of the holders of the
Notes, and (2) on or before September 1, 1996 and to the extent required by the
Bank Lenders pursuant to the Credit Agreement, the Company will cause MascoTech
to deliver to the holders of the Notes a security agreement in favor of the
Collateral Agent with respect to substantially all of its personal property and
a
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mortgage in favor of the Collateral Agent with respect to each parcel of real
property owned by MascoTech in order to secure the obligations of the Company
under the Note Agreements and the Notes on an equal and ratable basis with the
obligations of the Company under the Credit Agreement and shall file for record
in the appropriate recording offices such mortgages and all Uniform Commercial
Code Financing Statements required by you or your special counsel in order to
perfect such security interests in the collateral described therein and shall
deliver such certificates, title policies, representations and warranties, legal
opinions and other showings reasonably required by you or your special counsel
with respect to the execution and delivery of such mortgage and the recording of
such mortgages and Uniform Commercial Code Financing Statements with respect to
the security interest to be granted in the real property of MascoTech; and
(c) on or before September 1, 1996, the Company will use its best efforts
to cause Tower-Kentucky and the City of Bardstown, Kentucky, to deliver to the
holders of the Notes executed copies of an Amended and Restated Continuing
Collateral Mortgage in favor of the Collateral Agent and shall file for record
in the appropriate recording offices said mortgage and all Uniform Commercial
Code Financing Statements required by you or your special counsel in order to
perfect such security interests in the property described therein. The Company
shall, or shall cause Tower-Kentucky to, deliver such certificates, endorsements
to title policies, representations and warranties, legal opinions and other
showings reasonably required by you or your special counsel with respect to the
execution and delivery of such mortgage and the recording of such mortgage and
Uniform Commercial Code Financing Statements with respect to the security
interest to be granted in the real property of Tower-Kentucky located in
Bardstown, Kentucky.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note when
the same shall have become due and such default shall continue for more
than five Business Days; or
(b) Default shall occur in the making of any required prepayment on
any of the Notes as provided in (S)2.1; or
(c) Default shall occur in the making of any other payment of the
principal of any Note or premium, if any, thereon at the expressed or any
accelerated maturity date or at any date fixed for prepayment; or
(d) Default shall occur in the observance or performance of any
covenant or agreement contained in (S)5.5 through (S)5.11, (S)5.13 or
(S)5.18; or
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(e) Default shall occur in the observance or performance of any
other provision of this Agreement or in the observance or performance of
any provision of any of the Subsidiary Guaranties which is not remedied
within 30 days after the earlier of (1) the day on which a Responsible
Officer of the Company first obtains knowledge of such default, or (2) the
day on which written notice thereof is given to the Company by the holder
of any Note; or
(f) Default shall be made in the payment when due (whether by lapse
of time, by declaration, by call for redemption or otherwise) of the
principal of or interest on any Indebtedness (other than the Notes) of the
Company or any Restricted Subsidiary individually or in the aggregate
exceeding $5,000,000 (or the equivalent in local currency) and such default
shall continue beyond the period of grace, if any, allowed with respect
thereto; or
(g) The happening of any event under any indenture, agreement or
other instrument under which any Indebtedness (other than the Notes) of the
Company or any Restricted Subsidiary individually or in the aggregate
exceeding $5,000,000 (or the equivalent in local currency) is outstanding
and such event shall permit the holder or holders thereof, or any trustee
or agent for such holders (after the period of grace, if any, allowed with
respect thereto), to declare such Indebtedness to be due and payable, or to
require such Indebtedness to be prepaid (other than by a regularly
scheduled required prepayment), redeemed, purchased, or defeased, or shall
require an offer to be made to prepay, redeem, purchase or defease such
Indebtedness, in each case prior to the stated maturity date thereof; or
(h) Any representation or warranty made by the Company herein or
made by any Restricted Subsidiary in its respective Subsidiary Guaranty, or
made by the Company or any of the Company's Restricted Subsidiaries in any
statement or certificate furnished by the Company or by any of the
Company's Restricted Subsidiaries in connection with the consummation of
the issuance and delivery of the Notes or furnished by the Company pursuant
hereto or by any of the Company's Restricted Subsidiaries pursuant to the
Subsidiary Guaranties, is untrue in any material respect as of the date of
the issuance or making thereof; or
(i) A final judgment or judgments for the payment of money
aggregating in excess of $2,000,000 (net of insurance proceeds to the
extent the insurer has acknowledged liability with respect thereto) is or
are outstanding against the Company or any Restricted Subsidiary or against
any property or assets of either which has or have remained unpaid,
unvacated, unbonded or unstayed by appeal or otherwise for a period of
30 days from the date of its entry; or
(j) An event of default under any Collateral Document shall have
occurred and be continuing which is not remedied within 30 days after the
earlier of (1) the day on which a Responsible Officer of the Company first
obtains knowledge of such default, or (2) the day on which written notice
thereof is given to the Company by the holder of any Note; or
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(k) Any Subsidiary Guaranty shall cease to be in full force and
effect for any reason whatsoever, including, without limitation, a
determination by any governmental body or court that such agreement is
invalid, void or unenforceable or any of the Subsidiary Guarantors shall
contest or deny in writing the validity or enforceability of any of its
respective obligations under the Subsidiary Guaranties, but excluding
termination of any Subsidiary Guaranty as a result of the merger,
consolidation or disposition of the Restricted Subsidiary which is a party
thereto within the limitations of (S)5.11; or
(l) If (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) the aggregate "amount
of unfunded benefit liabilities" (within the meaning of Section 4001(a)(18)
of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $5,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (within the meaning of Section 3 of
ERISA), (v) the Company or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan (within the meaning of Section 3
of ERISA) that provides post-employment welfare benefits in a manner that
would increase the liability of the Company or any Subsidiary thereunder;
and any such event or events described in clauses (i) through (vi) above,
either individually or together with any other such event or events, could
reasonably be expected to have a material adverse effect on the Company or
any Restricted Subsidiary; or
(m) A custodian, liquidator, trustee or receiver is appointed for
Tower Automotive, the Company or any Restricted Subsidiary or for the major
part of the property of any thereof and is not discharged within 60 days
after such appointment; or
(n) Tower Automotive, the Company or any Restricted Subsidiary
becomes insolvent or bankrupt, is generally not paying its debts as they
become due or makes an assignment for the benefit of creditors, or Tower
Automotive, the Company, or any Restricted Subsidiary applies for or
consents to the appointment of a custodian, liquidator, trustee or receiver
for Tower Automotive, the Company or such Restricted Subsidiary or for the
major part of the property of any thereof; or
(o) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or against
Tower Automotive, the Company or any Restricted Subsidiary and, if
instituted against Tower Automotive, the Company or any Restricted
Subsidiary, as the case may be, are consented to or are not dismissed
within 60 days after such institution.
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Section 6.2. Notice to Holders. When any Default or Event of Default
described in the foregoing (S)6.1 has occurred, or if the holder of any Note or
of any other evidence of Indebtedness of the Company gives any notice or takes
any other action with respect to a claimed default, the Company agrees to give
notice within three Business Days of such event to all holders of the Notes then
outstanding.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of (S)6.1 has happened and is continuing
in respect of any Note, the holder thereof, may, by notice in writing sent to
the Company in the manner provided in (S)9.6, declare the entire principal and
all interest accrued on such Note to be, and such Note shall thereupon become
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event of
Default described in paragraphs (a) through (l), inclusive, of said (S)6.1 has
happened and is continuing, the holder or holders of 25% or more of the
principal amount of the Notes at the time outstanding may, by notice in writing
to the Company in the manner provided in (S)9.6, declare the entire principal
and all interest accrued on all Notes to be, and all Notes shall thereupon
become, forthwith due and payable, without any presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived. When any
Event of Default described in paragraph (m), (n) or (o) of (S)6.1 has occurred,
then all outstanding Notes shall immediately become due and payable without
presentment, demand or notice of any kind. Upon the Notes becoming due and
payable as a result of any Event of Default as aforesaid, the Company will
forthwith pay to the holders of the Notes the entire principal and interest
accrued on the Notes and, to the extent not prohibited by applicable law, an
amount as liquidated damages for the loss of the bargain evidenced hereby (and
not as a penalty) equal to the Make-Whole Amount, determined as of the date on
which the Notes shall so become due and payable. No course of dealing on the
part of the holder or holders of any Notes nor any delay or failure on the part
of any holder of Notes to exercise any right shall operate as a waiver of such
right or otherwise prejudice such holder's rights, powers and remedies. The
Company further agrees, to the extent permitted by law, to pay to the holder or
holders of the Notes all costs and expenses incurred by them in the collection
of any Notes upon any default hereunder or thereon, including reasonable
compensation to such holder's or holders' attorneys and financial advisors for
all services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of (S)6.3
are subject to the condition that if the principal of and accrued interest on
all or any outstanding Notes have been declared immediately due and payable by
reason of the holder or holders of 25% or more of the principal amount of the
Notes at the time outstanding notifying the Company of the occurrence of any
Event of Default described in paragraphs (a) through (l), inclusive, of (S)6.1,
the holders of 76% in aggregate principal amount of the Notes then outstanding
may, by written instrument filed with the Company, rescind and annul such
declaration and the consequences thereof, provided that at the time such
declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement;
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(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely by
reason of such declaration under (S)6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall have
been made good, cured or waived pursuant to (S)7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holders of at least 51% in aggregate principal
amount of outstanding Notes; provided that without the written consent of the
holders of all of the Notes then outstanding, no such amendment or waiver shall
be effective (a) which will change the time of payment (including any prepayment
required by (S)2.1) of the principal of or the interest on any Note or change
the principal amount thereof or change the rate of interest thereon, or
(b) which will change any of the provisions with respect to optional
prepayments, or (c) which will change the percentage of holders of the Notes
required to consent to any such amendment or waiver of any of the provisions of
this (S)7 or (S)6, or (d) which will change any definition related to the
matters described in clauses (a), (b) or (c) of this (S)7.1.
Section 7.2. Solicitation of Holders. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement or the Notes unless each holder of Notes (irrespective of the amount
of Notes then owned by it) shall be informed thereof by the Company and shall be
afforded the opportunity of considering the same and shall be supplied by the
Company with sufficient information to enable it to make an informed decision
with respect thereto. The Company will not, directly or indirectly, pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any holder of Notes as consideration for or as an
inducement to entering into by any holder of Notes of any waiver or amendment of
any of the terms and provisions of this Agreement or the Notes unless such
remuneration is concurrently paid, on the same terms, ratably to the holders of
all Notes then outstanding, in accordance with the provisions of (S)7.1.
Promptly and in any event within 30 days of the date of execution and delivery
of any such waiver or amendment, the Company shall provide a true, correct and
complete copy thereof to each of the holders of the Notes.
Section 7.3. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to
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indicate such amendment or waiver. No such amendment or waiver shall extend to
or affect any obligation not expressly amended or waived or impair any right
consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires,
the terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both the
singular and plural forms of any of the terms herein defined:
"Acquisition Agreement" shall mean that certain Stock Purchase Agreement by
and among MascoTech, Tower Automotive and the Company dated May 31, 1996.
"Affiliate" shall mean any Person (other than a Wholly-owned Restricted
Subsidiary and any holder of the Notes) (a) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, the Company, (b) which beneficially owns or holds 10% or more of
any class of the Voting Stock of the Company or (c) 10% or more of the Voting
Stock of which is beneficially owned or held by the Company or a Subsidiary or
(d) which is an officer or director of the Company or any Subsidiary. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of Voting Stock, by contract or otherwise.
"Agreements" shall have the meaning set forth in (S)1.3.
"Bank Lenders" shall mean and include each of the Banks which is a party to
the Credit Agreement.
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which banks in Grand Rapids, Michigan or New York, New York are required
by law to close or are customarily closed.
"Capital Stock" shall mean any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock and any
equity securities or interest of or in any association or partnership, limited
or general.
"Capitalized Lease" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance sheet
of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person.
"Closing Date" shall have the meaning set forth in (S)1.2.
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"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
regulations from time to time promulgated thereunder.
"Collateral Agent" shall have the meaning set forth in (S)1.5.
"Collateral Documents" shall have the meaning set forth in (S)1.5.
"Commission" shall mean the United States Securities and Exchange
Commission and any successor federal agency having similar powers.
"Company" shall mean R. J. Tower Corporation, a Michigan corporation, and
any Person who succeeds to all, or substantially all, of the assets and business
of R. J. Tower Corporation.
"Competitor" shall mean General Motors Corporation and its subsidiaries,
Ford Motor Co. and its subsidiaries, Chrysler Corp. and its subsidiaries, Honda
of America Mfg., Inc. and its subsidiaries and Toyota Motor Company and its
subsidiaries, Magna International, Inc. and its subsidiaries and The Budd
Company and its subsidiaries.
"Consolidated Adjusted Net Worth" shall mean as of the date of any
determination thereof, the arithmetic difference of:
(a) Consolidated Stockholders' Equity
minus
(b) the aggregate amount of all Restricted Investments in excess of
10% of the amount determined in accordance with clause (a) above;
all determined in accordance with GAAP.
"Consolidated Fixed Charges" for any period shall mean on a consolidated
basis the sum of (a) all Rentals (other than Rentals on Capitalized Leases)
payable during such period by the Company and its Restricted Subsidiaries, and
(b) all Interest Expense on all Indebtedness (including the interest component
of Rentals on Capitalized Leases) during such period of the Company and its
Restricted Subsidiaries.
"Consolidated Funded Debt" shall mean all Funded Debt of the Company and
its Restricted Subsidiaries, determined on a consolidated basis eliminating
intercompany items.
"Consolidated Net Income" for any period shall mean net income and net loss
of the Company and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, but excluding in any event:
(a) earnings or losses attributable to outstanding Minority Interests;
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(b) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on such excluded
gains and any tax deductions or credits on account of any such excluded
losses;
(c) the proceeds of any life insurance policy;
(d) net earnings and losses of any Restricted Subsidiary accrued
prior to the date it became a Restricted Subsidiary;
(e) net earnings and losses of any corporation (other than a
Restricted Subsidiary), substantially all the assets of which have been
acquired in any manner by the Company or any Restricted Subsidiary,
realized by such corporation prior to the date of such acquisition;
(f) net earnings and losses of any corporation (other than a
Restricted Subsidiary) with which the Company or a Restricted Subsidiary
shall have consolidated or which shall have merged into or with the Company
or a Restricted Subsidiary prior to the date of such consolidation or
merger;
(g) net earnings of any business entity (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest unless such net earnings shall have actually been
received by the Company or such Restricted Subsidiary in the form of cash
distributions;
(h) any portion of the net earnings of any Restricted Subsidiary
which for any reason is unavailable for payment of dividends to the Company
or any other Restricted Subsidiary;
(i) earnings resulting from any reappraisal, revaluation or write-up
of assets;
(j) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the amount
invested in such Subsidiary;
(k) any gain arising from the acquisition of any Securities of the
Company or any Restricted Subsidiary;
(l) any reversal of any contingency reserve, except to the extent
that provision for such contingency reserve shall have been made from
income arising during such period; and
(m) any other extraordinary gain or loss.
"Consolidated Net Income Available for Fixed Charges" for any period shall
mean the sum of (a) Consolidated Net Income during such period plus, without
duplication, (to the extent deducted in determining Consolidated Net Income),
(b) all provisions (including those provisions for deferred taxes) for any
Federal, state or other income taxes made by the Company
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and its Restricted Subsidiaries during such period, (c) the amortization
expenses for the Company and its Restricted Subsidiaries during such period, and
(d) Consolidated Fixed Charges during such period.
"Consolidated Stockholders' Equity" of the Company and its Restricted
Subsidiaries shall mean, as of the date of any determination thereof, the amount
of the Capital Stock accounts (net of treasury stock, at cost) plus (or minus in
the case of a deficit) the surplus and retained earnings of the Company and its
Restricted Subsidiaries as determined in accordance with GAAP.
"Consolidated Total Assets" shall mean as of the date of any determination
thereof, total assets of the Company and its Restricted Subsidiaries determined
on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of any
determination thereof, the sum of (a) Consolidated Funded Debt plus
(b) Consolidated Adjusted Net Worth.
"Credit Agreement" shall mean the Third Amendment and Restated Credit
Agreement dated as of January 16, 1996, among the Company, the Banks named
therein, and Comerica Bank, as Agent, as from time to time amended,
supplemented, extended, restated or otherwise modified, and including any
successor or replacement senior credit facility.
"Current Debt" of any Person shall mean as of the date of any determination
thereof (a) all Indebtedness of such Person other than Funded Debt of such
Person and (b) Guaranties by such Person of Current Debt of others.
"Default" shall mean any event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, constitute an Event of
Default.
"Distribution" in respect of the Company and its Restricted Subsidiaries
shall mean:
(a) dividends or other distributions on Capital Stock of a corporation
(except dividends or other distributions payable solely in shares of common
stock of such corporation); and
(b) any purchase, redemption, acquisition or retirement of any
shares of its Capital Stock or warrants, rights or other options to
purchase or acquire any shares of its Capital Stock.
"Domestic Restricted Subsidiary" shall mean any Restricted Subsidiary which
is organized under the laws of the United States or any state thereof or the
District of Columbia.
"Edgewood" shall have the meaning set forth in (S)1.5.
"Environmental Law" shall mean any international, federal, state or local
statute, law, regulation, order, consent decree, judgment, permit, license,
code, covenant, deed restriction,
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common law, treaty, convention, ordinance or other requirement relating to
public health, safety or the environment, including, without limitation, those
relating to releases, discharges or emissions to air, water, land or
groundwater, to the withdrawal or use of groundwater, to the use and handling of
polychlorinated biphenyls or asbestos, to the disposal, treatment, storage or
management of hazardous or solid waste, or Hazardous Substances or crude oil, or
any fraction thereof, or to exposure to toxic or hazardous materials, to the
handling, transportation, discharge or release of gaseous or liquid Hazardous
Substances or crude oil, or any fraction thereof, and any regulation, order,
notice or demand issued pursuant to such law, statute or ordinance, in each case
applicable to the property of the Company and its Subsidiaries or the operation,
construction or modification of any thereof, including without limitation, the
following: the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, the Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, the
Hazardous Materials Transportation Act, as amended, the Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1976, the Safe Drinking Water
Control Act, the Clean Air Act of 1966, as amended, the Toxic Substances Control
Act of 1976, the Emergency Planning and Community Right-to-Know Act of 1986, the
National Environmental Policy Act of 1975, the Oil Pollution Act of 1990 and any
similar or implementing state law, and any state statute and any further
amendments to these laws providing for financial responsibility for cleanup or
other actions with respect to the release or threatened release of Hazardous
Substances or crude oil, or any fraction thereof, and all rules, regulations,
guidance documents and publications promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that is,
along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in (S)6.1.
"Exchange Act" shall mean, at any time, the Securities Exchange Act of
1934, as then in effect or any similar federal statute then in effect, and any
reference to a particular Section of such Act shall include a reference to the
comparable Section, if any, of any such similar federal statute.
"Funded Debt" of any Person shall mean all Indebtedness of such Person in
any case having a final maturity of one or more than one year from the date of
origin thereof (or which is renewable or extendible at the option of the obligor
for a period or periods more than one year from the date of origin), including
all payments in respect thereof that are required to be made within one year
from the date of any determination of Funded Debt, whether or not the obligation
to make such payments shall constitute a current liability of the obligor under
GAAP.
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"GAAP" shall mean generally accepted accounting principles at the time in
the United States of America.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (b) to advance or supply
funds (1) for the purchase or payment of such Indebtedness or obligation, or
(2) to maintain working capital or any balance sheet or income statement
condition or otherwise to advance or make available funds for the purchase or
payment of such Indebtedness or obligation, (c) to lease property or to purchase
Securities or other property or services primarily for the purpose of assuring
the owner of such Indebtedness or obligation of the ability of the primary
obligor to make payment of such Indebtedness or obligation, or (d) otherwise to
assure the owner of such Indebtedness or obligation of the primary obligor
against loss in respect thereof. For the purposes of all computations made
under this Agreement, a Guaranty in respect of any Indebtedness shall be deemed
to be Indebtedness equal to the principal amount of such Indebtedness which has
been guaranteed, and a Guaranty in respect of any other obligation or liability
or any dividend shall be deemed to be Indebtedness equal to the maximum
aggregate amount of such obligation, liability or dividend.
"Hazardous Substance" shall mean any hazardous or toxic material, substance
or waste, pollutant or contaminant which is regulated under any statute, law,
ordinance, rule or regulation of any local, state, regional or federal authority
having jurisdiction over the property of the Company and its Subsidiaries or its
use, including but not limited to any material, substance or waste which is:
(a) defined as a hazardous substance under the Federal Water Pollution Control
Act, as amended by the Clean Water Act of 1976; (b) regulated as a hazardous
waste under the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste
Amendments of 1984; (c) defined as a hazardous substance under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and the Reauthorization Act of 1986; or (d) defined or
regulated as a hazardous substance or hazardous waste under any rules or
regulations promulgated under any of the foregoing statutes.
"Indebtedness" of any Person shall mean and include all (a) obligations of
such Person for borrowed money or which have been incurred in connection with
the acquisition of property or assets, (b) obligations secured by any Lien upon
property or assets owned by such Person, whether or not such Person has assumed
or become liable for the payment of such obligations, (c) obligations created or
arising under any conditional sale or other title retention agreement with
respect to property or assets acquired by such Person, notwithstanding the fact
that the rights and remedies of the seller, lender or lessor under such
agreement in the event of default are limited to repossession or sale of
property or assets, (d) Capitalized Rentals, and (e) Guaranties by such Person
of obligations of others of the character referred to in this definition. For
all purposes of this Agreement, the Indebtedness of any Person shall include the
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Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, but shall exclude all obligations of such
Person (including all Guaranties thereof) incurred in connection with the
purchase of property which are only payable by such Person in the event certain
future performance goals are achieved with respect to the property acquired (the
"Earn-out Amount") unless: (1) such Earn-out Amount exceeds 50% of the purchase
price of the property acquired (in which event such excess amount shall
constitute Indebtedness) or (2) any portion of such Earn-out Amount at any time
shall be classified as "debt" in accordance with GAAP (in which event such
portion of such Earn-out Amount shall constitute Indebtedness).
"Institutional Holder" shall mean any of the following Persons: (a) any
bank, savings and loan association, savings institution, trust company, mutual
fund or national banking association, acting for its own account or in a
fiduciary capacity, (b) any charitable foundation, (c) any insurance company,
(d) any fraternal benefit society, (e) any pension, retirement or profit-sharing
trust or fund within the meaning of Title I of ERISA or for which any bank,
trust company, national banking association or investment adviser registered
under the Investment Advisers Act of 1940, as amended, is acting as trustee or
agent, (f) any investment company or business development company, as defined in
the Investment Company Act of 1940, as amended, (g) any small business
investment company licensed under the Small Business Investment Act of 1958, as
amended, (h) any broker or dealer registered under the Exchange Act or any
investment adviser registered under the Investment Advisers Act of 1940, as
amended, (i) any government, any public employees' pension or retirement system,
or any other government agency supervising the investment of public funds,
(j) any other entity all of the equity owners of which are Institutional Holders
or (k) any other Person which may be within the definition of "qualified
institutional buyer" as such term is used in Rule 144A, as from time to time in
effect, promulgated under the Securities Act of 1933, as amended.
"Intercreditor Agreement" shall have the meaning set forth in (S)1.5.
"Interest Expense" for any period shall mean all interest and all
amortization of debt discount and expense, determined in accordance with GAAP,
on any particular Indebtedness (including, without limitation, payment-in-kind,
zero coupon and other like Securities) for which such calculations are being
made.
"Investments" shall mean all investments, in cash or by delivery of
property, made directly or indirectly in any property or assets or in any
Person, whether by acquisition of shares of Capital Stock, Indebtedness or other
obligations or Securities or by loan, advance, capital contribution or
otherwise.
"Kalamazoo" shall have the meaning set forth in (S)1.5.
"Lien" shall mean any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include survey exceptions or
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encumbrances, easements or reservations, or rights of others for rights-of-way,
utilities and other similar purposes, or zoning or restrictions as to the use of
real properties. For the purposes of this Agreement, the Company or a
Subsidiary shall be deemed to be the owner of any property which it has acquired
or holds subject to a conditional sale agreement, Capitalized Lease or other
arrangement pursuant to which title to the property has been retained by or
vested in some other Person for security purposes and such retention or vesting
shall constitute a Lien.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of any Note the excess, if any, of (a) the aggregate present value
as of the date of such prepayment or payment of each dollar of principal being
prepaid or paid (taking into account the application of such prepayment or
payment required by (S)2.1(A) or (B), as the case may be) and the amount of
interest (exclusive of interest accrued to the date of prepayment or payment)
that would have been payable in respect of such dollar if such prepayment or
payment had not been made, determined by discounting such amounts at the
Reinvestment Rate from the respective dates on which they would have been
payable, over (b) 100% of the principal amount of such outstanding Note being
prepaid or paid. If the Reinvestment Rate is equal to or higher than 7.65% in
the case of the Series A Notes and 7.82% in the case of the Series B Notes, as
the case may be, the Make-Whole Amount shall be zero. For purposes of any
determination of the Make-Whole Amount:
"Reinvestment Rate" in respect of any Note shall mean (1) the sum of
0.50%, plus the yield reported on page "USD" of the Bloomberg Financial
Markets Services Screen (or, if not available, any other nationally
recognized trading screen reporting on-line intraday trading in the United
States government Securities) at 11:00 A.M. (New York, New York time) on
the date of determination for the United States government Securities
having a maturity (rounded to the nearest month) corresponding to the
remaining Weighted Average Life to Maturity of the principal of such Note
being prepaid or paid (taking into account the application of such
prepayment or payment required by (S)2.1(A) or (B), as the case may be) or
(2) in the event that no nationally recognized trading screen reporting on-
line intraday trading in the United States government Securities is
available, Reinvestment Rate shall mean the sum of 0.50%, plus the
arithmetic mean of the yields for the two columns under the heading "Week
Ending" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the Weighted Average Life to Maturity of the principal of
such Note being prepaid or paid (taking into account the application of
such prepayment or payment required by (S)2.1(A) or (B), as the case may
be). If no maturity exactly corresponds to such Weighted Average Life to
Maturity, yields for the two published maturities most closely
corresponding to such Weighted Average Life to Maturity shall be calculated
pursuant to the immediately preceding sentence and the Reinvestment Rate
shall be interpolated or extrapolated from such yields on a straight-line
basis, rounding in each of such relevant periods to the nearest month. For
the purposes of calculating the "Reinvestment Rate" in any case where the
Statistical Release is to be used as hereinabove contemplated, the most
recent Statistical Release published prior to the date of determination of
the Make-Whole Amount shall be used.
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"Statistical Release" shall mean the release designated "H.15(519)" or
any successor publication which is published weekly by the Federal Reserve
System published most recently prior to any date of determination and
which, in any such case, establishes yields on actively traded United
States government Securities adjusted to constant maturities or, if such
statistical release is not published at the time of any determination
hereunder, then such other reasonably comparable index which shall be
designated by the holders of 66-2/3% in aggregate principal amount of the
outstanding Notes.
"Weighted Average Life to Maturity" of the principal amount of any
Note being prepaid or paid shall mean, as of the time of any determination
thereof, the number of years obtained by dividing the then Remaining
Dollar-Years of such principal by the aggregate amount of such principal.
The term "Remaining Dollar-Years" of such principal shall mean the amount
obtained by (1) multiplying the amount of principal that would have become
due on each scheduled payment date if such prepayment or payment had not
been made by the number of years (calculated to the nearest one-twelfth)
which will elapse between the date of determination and such scheduled
payment date, and (2) totalling the products obtained in (1).
"MascoTech" shall mean MascoTech Stamping Technologies, Inc., a Delaware
corporation, and shall include any successor corporation to MascoTech Stamping
Technologies, Inc.
"Minority Interests" shall mean any shares of stock of any class of a
Restricted Subsidiary (other than directors' qualifying shares as required by
law) that are not owned by the Company and/or one or more of its Restricted
Subsidiaries. Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary liquidating value
of such preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus applicable
thereto adjusted, if necessary, to reflect any changes from the book value of
such common stock required by the foregoing method of valuing Minority Interests
in preferred stock.
"Mortgages" shall have the meaning set forth in (S)1.5.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Notes" shall have the meaning set forth in (S)1.1.
"Overdue Rate" shall mean the lesser of (a) the maximum interest rate
permitted by law and (b) (1) 9.65% per annum in the case of the Series A Notes
and (2) 9.82% per annum in the case of the Series B Notes.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
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"Permitted Foreign Jurisdiction" shall mean and include Canada or any
province thereof, the United Kingdom, Australia, Austria, Belgium, Denmark,
Finland, France, Germany, Holland, Italy, New Zealand, Norway, Portugal, Spain,
Sweden, Switzerland, Japan, South Korea, Singapore, Taiwan, any other nation now
or hereafter admitted to the European Economic Community, Mexico, Argentina or
Chile.
"Person" shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof.
"Plan" shall mean an "employee benefit plan," as such term is defined in
Section 3(3) of ERISA, established or maintained by the Company or any ERISA
Affiliate or as to which the Company or any ERISA Affiliate contributed or is a
member or otherwise may have any liability.
"Purchasers" shall have the meaning set forth in (S)1.1.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by the Company or a Restricted Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be exclusive of
any amounts required to be paid by the Company or a Restricted Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Reportable Event" shall mean a "reportable event" as described in Section
4043 of ERISA for which the notice requirement to the PBGC has not been waived
(provided that the loss of qualification of a Plan and the failure to meet the
minimum funding standard of Section 412 of the Code or Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any waiver of the
reporting requirement by the PBGC).
"Responsible Officer" shall mean the President, any Vice President, the
Chief Financial Officer, the Secretary or any Assistant Secretary of the
Company.
"Restricted Investments" shall mean all Investments, other than:
(a) Investments by the Company and its Restricted Subsidiaries in and
to Restricted Subsidiaries, including any Investment in a business entity
which, after giving effect to such Investment, will become a Restricted
Subsidiary;
(b) Investments in property or assets to be used in the ordinary
course of the business of the Company and its Restricted Subsidiaries as
described in (S)5.5 of this Agreement;
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(c) Investments of the Company existing as of the Closing Date and
described on Schedule II hereto;
(d) receivables arising from the sale of goods and services in the
ordinary course of business of the Company and its Restricted Subsidiaries;
(e) Investments in commercial paper of corporations organized under
the laws of the United States or any state thereof maturing in 270 days or
less from the date of issuance which, at the time of acquisition by the
Company or any Subsidiary, is accorded a rating of "A-2" or better by
Standard & Poor's Ratings Group or "P-2" by Moody's Investors Service,
Inc.;
(f) Investments in direct obligations of the United States of
America or any agency or instrumentality of the United States of America,
the payment or guarantee of which constitutes a full faith and credit
obligation of the United States of America, in either case, maturing within
three years from the date of acquisition thereof;
(g) Investments in certificates of deposit and banker's acceptances
maturing within one year from the date of issuance thereof, either
(1) issued by a bank or trust company organized under the laws of the
United States or any State thereof, having capital, surplus and undivided
profits aggregating at least $500,000,000, provided that at the time of
acquisition thereof by the Company or a Restricted Subsidiary, the senior
unsecured long-term debt of such bank or trust company or of the holding
company of such bank or trust company is rated "AA-" or better by
Standard & Poor's Ratings Group or "Aa3" or better by Moody's Investors
Service, Inc. or (2) issued by Bank of America National Trust & Savings
Association, San Francisco, California, or Comerica Bank, Detroit,
Michigan;
(h) Investments in readily-marketable obligations of indebtedness of
any State of the United States or any municipality organized under the laws
of any State of the United States or any political subdivision thereof
which, at the time of acquisition by the Company or any Restricted
Subsidiary, are accorded either of the two highest ratings by Standard &
Poor's Ratings Group, Moody's Investors Service, Inc. or another nationally
recognized credit rating agency of similar standards, which in any such
case mature no later than three years after the date of acquisition
thereof; and
(i) Investments in any money market fund which is classified by the
Company as a current asset in accordance with GAAP, the aggregate asset
value of which "marked to market" is at least $100,000,000 and which is
managed by a fund manager of recognized national standing, and which
invests substantially all of its assets in obligations described in
clauses (e) through (g) above.
In valuing any Restricted Investments in connection with any computation
pursuant to clause (b) of the definition of Consolidated Adjusted Net Worth,
Investments shall be taken at the original cost thereof, without allowance for
any subsequent write-offs or appreciation or
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depreciation therein, but less any amount repaid or recovered in cash on account
of capital or principal.
"Restricted Subsidiary" shall mean any Subsidiary (a) which is organized
under the laws of any Permitted Foreign Jurisdiction; (b) which conducts
substantially all of its business and has substantially all of its assets within
any Permitted Foreign Jurisdiction; (c) of which more than 50% (by number of
votes) of the Voting Stock is beneficially owned, directly or indirectly, by the
Company; and (d) which is, subject to compliance with the requirements of
(S)5.11(B)(3), designated as a Restricted Subsidiary on Schedule II attached
hereto or in accordance with (S)5.17.
"Security" shall have the same meaning as in Section 2(1) of the Securities
Act of 1933, as amended.
"Security Agreements" shall have the meaning set forth in (S)1.5.
"Senior Funded Debt" shall mean all Consolidated Funded Debt of the Company
which is not expressed to be subordinate or junior in rank to any other Funded
Debt of the Company.
"Series A Notes" shall have the meaning set forth in (S)1.1.
"Series B Notes" shall have the meaning set forth in (S)1.1.
"Specified Restricted Subsidiary Indebtedness" shall mean (a) all Current
Debt and Funded Debt of a Restricted Subsidiary secured by Liens permitted by
(S)5.9(H) and (b) all Current Debt and Funded Debt of a business entity which
exists at the time it becomes a Restricted Subsidiary which, if secured, is so
secured by Liens permitted by (S)5.9(I).
The term "subsidiary" shall mean as to any particular parent business
entity any corporation of which more than 50% (by number of votes) of the Voting
Stock shall be beneficially owned, directly or indirectly, by such parent
business entity. The term "Subsidiary" shall mean a subsidiary of the Company.
"Subsidiary Guaranties" shall have the meaning set forth in (S)1.4 and
shall include any additional Guaranty executed and delivered in favor of the
holders of the Notes pursuant to (S)5.16.
"Subsidiary Guarantors" shall mean (a) Tower-Indiana, (b) Tower-Kentucky,
(c) Edgewood, (d) Kalamazoo, (e) Trylon, (f) MascoTech and (g) each other
Subsidiary that from time to time executes and delivers a Guaranty in favor of
the holders of the Notes pursuant to (S)5.16.
"Support Documents" shall have the meaning set forth in (S)1.5.
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"Tower Automotive" shall mean Tower Automotive, Inc., a Delaware
corporation, and any Person who succeeds to all, or substantially all, of the
assets and business of Tower Automotive, Inc.
"Tower Automotive Letter Agreement" shall mean that certain letter
agreement dated the Closing Date and addressed to the Purchasers pursuant to
which Tower Automotive agrees to downstream to the Company 100% of the net cash
proceeds received from a public offering occurring after the Closing Date of
Tower Automotive common stock.
"Tower-Indiana" shall have the meaning set forth in (S)1.5.
"Tower-Kentucky" shall have the meaning set forth in (S)1.5.
"Trylon" shall have the meaning set forth in (S)1.5.
"Unrestricted Subsidiary" shall mean any Subsidiary which is not designated
as a Restricted Subsidiary on Schedule II attached hereto or is not designated
as a Restricted Subsidiary in accordance with (S)5.17.
"Voting Stock" of any Person shall mean Securities of any class or classes,
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors of such Person (or Persons
performing similar functions).
"Wholly-owned" shall mean, when used in connection with any Subsidiary, a
Subsidiary (a) all the outstanding shares (other than directors' qualifying
shares, if required by law) of every class of common stock of which are at the
time owned by the Company or by one or more Wholly-owned Subsidiaries or by the
Company and one or more Wholly-owned Subsidiaries and (b) which has no other
Capital Stock outstanding that confers upon the holder thereof any rights
(contingent or otherwise) to elect any directors of such Subsidiary.
Section 8.2. Accounting Principles . Where the character or amount
of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in accordance
with GAAP, to the extent applicable, except where such principles are
inconsistent with the requirements of this Agreement.
Section 8.3. Directly or Indirectly . Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS .
Section 9.1. Registered Notes . The Company shall cause to be kept
at its principal office a register for the registration and transfer of the
Notes, and the Company will register or
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transfer or cause to be registered or transferred, as hereinafter provided, any
Note issued pursuant to this Agreement.
At any time and from time to time the holder of any Note which has been
duly registered as hereinabove provided may transfer, in accordance with the
provisions of the last sentence of (S)3.2(A), such Note upon surrender thereof
at the principal office of the Company duly endorsed or accompanied by a written
instrument of transfer duly executed by the holder of such Note or its attorney
duly authorized in writing.
The Person in whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes of this Agreement.
Payment of or on account of the principal, premium, if any, and interest on any
Note shall be made to or upon the written order of such holder.
Section 9.2. Exchange of Notes. At any time and from time to time,
upon surrender of any Note at its office, the Company will deliver in exchange
therefor, without expense to such holder, except as set forth below, a Note for
the same aggregate principal amount as the then unpaid principal amount of the
Note so surrendered, or Notes in the denomination of $100,000 (or such lesser
amount as shall constitute 100% of the Notes of such holder) or any amount in
excess thereof as such holder shall specify, dated as of the date to which
interest has been paid on the Note so surrendered or, if such surrender is prior
to the payment of any interest thereon, then dated as of the date of issue,
registered in the name of such Person or Persons as may be designated by such
holder, and otherwise of the same form and tenor as the Notes so surrendered for
exchange. The Company may require the payment of a sum sufficient to cover any
stamp tax or governmental charge imposed upon such exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond of indemnity in such form and amount as shall be reasonably satisfactory to
the Company, or in the event of such mutilation upon surrender and cancellation
of the Note, the Company will make and deliver without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If the Purchaser or any subsequent Institutional Holder is the
owner of any such lost, stolen or destroyed Note, then the affidavit of an
authorized officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of such Note at the time of such loss, theft or
destruction shall be accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery of a
new Note other than the written agreement of such owner to indemnify the
Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to pay
directly all of your out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement, the Subsidiary Guaranties, the
Intercreditor Agreement and the Collateral Documents and the transactions
contemplated hereby and thereby, including but not limited to the charges and
disbursements of Chapman and Cutler, your special counsel, duplicating and
printing costs and charges for shipping the Notes, adequately insured to you at
your home office or at such other
-45-
<PAGE>
place as you may designate, and all such expenses relating to any amendments,
waivers, consents or releases of Liens of any Collateral Documents pursuant to
the provisions hereof (whether or not the same are actually executed and
delivered), including, without limitation, any amendments, waivers, or consents
resulting from any work-out, renegotiation or restructuring relating to the
performance by the Company of its obligations under this Agreement, the Notes,
the Intercreditor Agreement and the Collateral Documents and to the performance
by the Subsidiary Guarantors of their respective obligations under the
Subsidiary Guaranties, including reasonable compensation to your attorneys and
financial advisors for all services rendered in connection with the foregoing.
The Company also agrees to pay, within five Business Days of receipt thereof,
supplemental statements of Chapman and Cutler for disbursements unposted or not
incurred as of the Closing Date. The Company further agrees that it will pay and
save you harmless against any and all liability with respect to stamp and other
taxes, if any, which may be payable or which may be determined to be payable in
connection with the execution and delivery of this Agreement, the Notes, the
Intercreditor Agreement or the Collateral Documents, whether or not any Notes
are then outstanding and to protect and indemnify you against any liability for
any and all brokerage fees and commissions payable or claimed to be payable to
any Person in connection with the transactions contemplated by this Agreement,
the Intercreditor Agreement or the Collateral Documents. Without limiting the
foregoing, the Company agrees to pay the cost of obtaining the private placement
number for the Notes and authorizes the submission of such information as may be
required by Standard & Poor's CUSIP Service Bureau for the purpose of obtaining
such number.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to, and are not exclusive of, any rights or
remedies any such holder would otherwise have.
Section 9.6. Notices. All communications provided for hereunder shall be
in writing and, if to you, delivered or mailed prepaid by overnight air courier
or by facsimile communication, in each case addressed to you at your address
appearing on Schedule I to this Agreement or such other address as you or the
subsequent holder of any Note initially issued to you may designate to the
Company in writing, and if to the Company, delivered or mailed by registered or
certified mail or overnight air courier, or by facsimile communication, to the
Company at 6303 28th Street S.E., Grand Rapids, Michigan 49546, Attention:
Anthony A. Barone, with a copy to Tower Automotive, c/o Hidden Creek Industries,
4508 IDS Center, Minneapolis, Minnesota 55402, Attention: Scott D. Rued or to
such other address as the Company may in writing designate to you or to a
subsequent holder of the Note initially issued to you; provided, however, that a
notice to you by overnight air courier shall only be effective if delivered to
you at a street address designated for such purpose in Schedule I, and a notice
to you by facsimile communication shall only be effective if confirmed by
transmission of a copy thereof by prepaid overnight air courier, or, in either
case, as you or a subsequent holder of any Note initially issued to you may
designate to the Company in writing.
-46-
<PAGE>
Section 9.7. Indemnification. The Company does hereby indemnify and
hold harmless you, your directors, trustees, officers, employees and each
Person, if any, who controls you within the meaning of the Securities Act of
1933, as amended, or the Exchange Act (any and all of whom are referred to as
the "Indemnified Party") from and against any and all losses, claims, damages
and liabilities, joint or several (including all legal fees or other expenses
reasonably incurred by any Indemnified Party in connection with the preparation
for or defense of any pending or threatened claim, action or proceeding, whether
or not resulting in any liability), to which such Indemnified Party may become
subject (whether or not such Indemnified Party is a party thereto) under any
applicable Federal, state or local law or otherwise caused by or arising out of,
or allegedly caused by or arising out of, this Agreement or any transaction
contemplated hereby, other than losses, claims, damages or liabilities resulting
from such representation made by you in (S)3.2, or the transfer of any Notes in
violation of any applicable law or regulation.
Promptly after receipt by an Indemnified Party of notice of any claim,
action or proceeding with respect to which an Indemnified Party is entitled to
indemnity hereunder, such Indemnified Party will notify the Company of such
claim or the commencement of such action or proceeding, provided that the
failure of an Indemnified Party to give notice as provided herein shall not
relieve the Company of its obligations under this (S)9.7 with respect to such
Indemnified Party, except to the extent that the Company is actually prejudiced
by such failure. The Company will assume the defense of such claim, action or
proceeding and will employ counsel satisfactory to the Indemnified Party and
will pay the fees and expenses of such counsel. Notwithstanding the preceding
sentence, the Indemnified Party will be entitled, at the expense of the Company,
to employ counsel separate from counsel for the Company and for any other party
in such action if the Indemnified Party reasonably determines that a conflict of
interest or other reasonable basis exists which makes representation by counsel
chosen by the Company not advisable, provided that the Company shall not be
obligated to pay for the fees and expenses of more than one counsel for all
Indemnified Parties. In the event an Indemnified Party appears as a witness in
any action or proceeding brought against the Company (or any of its officers,
directors or employees) in which an Indemnified Party is not named as a
defendant, the Company agrees to reimburse such Indemnified Party for all
expenses incurred by it (including fees and expenses of counsel) in connection
with its appearing as a witness.
Section 9.8. Successors and Assigns. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to your benefit and
to the benefit of your successors and assigns, including each successive holder
or holders of any Notes.
Section 9.9. Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes.
Section 9.10. Severability. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision shall not affect the
validity or enforceability of any remaining portion, which remaining portion
shall remain in force and effect as if this Agreement had been executed with the
invalid or unenforceable portion thereof eliminated.
-47-
<PAGE>
SECTION 9.11. GOVERNING LAW. THIS AGREEMENT AND THE NOTES ISSUED
AND SOLD HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH NEW
YORK LAW, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 9.12. Submission to Jurisdiction. Any legal action or
proceeding with respect to this Agreement or the Notes or any document related
thereto may be brought in the courts of the State of New York or of the United
States of America for the Southern District of New York and by execution and
delivery of this Agreement, the Company hereby accepts for itself and in respect
of its property generally and unconditionally, the jurisdiction of the aforesaid
courts. The Company hereby irrevocably and unconditionally waives any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non conveniens which it may now or hereafter
have to the bringing of any action or proceeding in such respective
jurisdiction.
Section 9.13. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
-48-
<PAGE>
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
R. J. TOWER CORPORATION
By ______________________________
Its
Accepted as of May __, 1996.
[VARIATION]
By ______________________________
Its
-49-
<PAGE>
Principal Amount Principal Amount
Names and Addresses of Series A Notes to be of Series B Notes to Be
of Purchasers Purchased on the Purchased on the
Closing Date Closing Date
TEACHERS INSURANCE AND $10,000,000 $25,000,000
ANNUITY ASSOCIATION
OF AMERICA
730 Third Avenue
New York, New York 10017-3263
Attention: Mr. John Litchfield, Securities Division, Private Placements
Telephone Number: (212) 916-5244 or (212) 490-9000 (general number)
Facsimile Number: (212) 916-6581
Payments
All payments on account of the Notes shall be made in immediately available
funds at the opening of business on the due date by electronic funds transfer
through the Automated Clearing House System (identifying each payment as "R. J.
Tower Corporation, 7.65% Senior Secured Notes, Series A, due June 1, 2006,
PPN 74964@ AA 5, or 7.82% Senior Secured Notes, Series B, due June 1, 2008,
PPN 74964@ AB 3, as applicable, principal, premium or interest") to:
(a) In the case of the Series A Notes:
Citibank N.A.
399 Park Avenue
New York, New York 10022
ABA # 021000089
for credit to: Teachers Insurance and Annuity Association of America
Account Number 40578501
On order of: R. J. Tower Corporation
(b) In the case of the Series B Notes:
Morgan Guaranty Trust Company of New York
23 Wall Street
New York, New York 10015
ABA # 021000238
for credit to: Teachers Insurance and Annuity Association of America
Account Number 121-85-001
On order of: R. J. Tower Corporation
Notices
Contemporaneous with the above electronic funds transfer, mail or send by
facsimile written confirmation of each such payment to be addressed as set forth
below including the following information: (1) the full name, private placement
number, interest rate and maturity date of the Notes; (2) the allocation of
payment between principal, interest, premium and any special
Schedule I
(to Note Agreement)
<PAGE>
payment; and (3) the name and address of the bank from which such electronic
funds transfer was sent, to:
Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, NY 10017
Attention: Securities Accounting Division
Telephone Number: (212) 916-4188
Facsimile Number: (212) 916-6199
All other notices and communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-1624203
I-2
<PAGE>
Principal Amount
Names and Addresses of Series A Notes to Be
of Purchasers Purchased on the
Closing Date
JEFFERSON-PILOT LIFE INSURANCE COMPANY $7,500,000
P. O. Box 21008
Greensboro, North Carolina 27420
Attention: Securities Administration 3630
Telefacsimile: (910) 691-3025
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "R. J.
Tower Corporation, 7.65% Senior Secured Notes, Series A, due June 1, 2006,
PPN 74964@ AA 5, principal, premium or interest") to:
Jefferson-Pilot Life Insurance Company
c/o The Bank of New York
ABA #021 000 018 BNF: IOC566
Attention: P & I Department
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed to:
Jefferson-Pilot Life Insurance Company
c/o The Bank of New York
Attention: P & I Department
P.O. Box 19266
Newark, New Jersey 07195
with duplicate notice to Jefferson-Pilot Life Insurance Company at the address
first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 56-0359860
I-3
<PAGE>
Principal Amount
Names and Addresses of Series A Notes to Be
of Purchasers Purchased on the
Closing Date
ALEXANDER HAMILTON LIFE INSURANCE $7,500,000
COMPANY OF AMERICA
P. O. Box 21008
Greensboro, North Carolina 27420
Attention: Securities Administration 3630
Telefacsimile: (910) 691-3025
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "R. J.
Tower Corporation, 7.65% Senior Secured Notes, Series A, due June 1, 2006,
PPN 74964@ AA 5, principal, premium or interest") to:
Alexander Hamilton Life Insurance
Company of America
c/o The Bank of New York
ABA #021 000 018 BNF: IOC566
Attention: P & I Department
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed to:
Alexander Hamilton Life Insurance
Company of America
c/o The Bank of New York
Attention: P & I Department
P.O. Box 19266
Newark, New Jersey 07195
with duplicate notice to Alexander Hamilton Life Insurance Company of America at
the address first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 56-1311063
I-4
<PAGE>
Principal Amount
Names and Addresses of Series A Notes to Be
of Purchasers Purchased on the
Closing Date
NORTHERN LIFE INSURANCE COMPANY $8,500,000
c/o ReliStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Frank Pintens
Phone: (612)372-5413
Fax: (612)372-5368
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "R. J.
Tower Corporation, 7.65% Senior Secured Notes, Series A, due June 1, 2006,
PPN 74964@ AA 5, principal, premium or interest") to:
First National Bank N.A./Mpls. (ABA #091000022)
601 2nd Avenue South
Minneapolis, Minnesota 55402
Attention: Securities Accounting
for credit to: Northern Life Insurance Company
Account Number 1602-3237-6105
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-1295933
I-5
<PAGE>
Principal Amount
Names and Addresses of Series A Notes to Be
of Purchasers Purchased on the
Closing Date
NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY $4,000,000
c/o ReliStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Frank Pintens
Phone: (612)372-5413
Fax: (612)372-5368
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "R. J.
Tower Corporation, 7.65% Senior Secured Notes, Series A, due June 1, 2006,
PPN 74964@ AA 5, principal, premium or interest") to:
First National Bank N.A./Mpls. (ABA #091000022)
601 2nd Avenue South
Minneapolis, Minnesota 55402
Attention: Securities Accounting
for credit to: Northwestern National Life Insurance Company
Account Number 1102-4001-4461
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0451140
I-6
<PAGE>
Principal Amount
Names and Addresses of Series A Notes to Be
of Purchasers Purchased on the
Closing Date
BANKERS SECURITY LIFE
INSURANCE SOCIETY $2,500,000
c/o ReliStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Frank Pintens
Phone: (612)372-5413
Fax: (612)372-5368
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "R. J.
Tower Corporation, 7.65% Senior Secured Notes, Series A, due June 1, 2006,
PPN 74964@ AA 5, principal, premium or interest") to:
Chemical NYC/GEOCUST
New York, NY
DDA #544755102
A/C #1960 Dept. 571 NonStandard Securities
Bank ABA #021000128
for credit to: Bankers Security Life Insurance Society
Account Number N9254120
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: SIGLER & CO.
Taxpayer I.D. Number: 53-0242530
I-7
<PAGE>
DESCRIPTION OF DEBT AND LEASES
1. Current Debt of the Company and its Restricted Subsidiaries outstanding on
the Closing Date is as follows:
None
2. Funded Debt (other than Capitalized Rentals) of the Company and its
Restricted Subsidiaries outstanding on the Closing Date is as follows:
a. $300,000 Standby Letter of Credit issued on December 14, 1992 by
Comerica Bank for the account of Kalamazoo Stamping and Die Company;
b. Funded Debt outstanding pursuant to the Credit Agreement (as of
May 29, 1996, $23,750,000 -- term and $12,484,000 -- revolver);
c. $92,000 promissory note issued to John Daly;
d. $3,763,892.21 convertible promissory notes issued to the former
shareholders of Edgewood and Ann Arbor Assembly, due May 2, 2003;
e. $75,551 Principal Mutual life insurance loans;
f. $15,150 Chrysler Credit 1991 Plymouth Voyager loan, secured by
purchased vehicle;
g. $18,569 Chrysler Credit T300 pickup truck loan, secured by
purchased vehicle;
h. $24,823 First of America 1993 Jeep Cherokee loan, secured by
purchased vehicle;
i. indebtedness entered into in connection with the issuance of the
Indiana Bonds (as such term is defined in the Credit Agreement)
($3,600,000 due in annual installments of $720,000 through September
2000, and secured by letters of credit);
j. indebtedness entered into in connection with the issuance of the
Kentucky Bonds (as such term is defined in the Credit Agreement)
($23,765,000 due July 2024, $20,000,000 due March 2025, secured by
letters of credit);
k. R.J. Tower Corporation (Indiana) $25,000 Intercompany KREDA loan;
l. $5,000,000 promissory note, payable to MascoTech, Inc., issued
pursuant to the Acquisition Agreement.
Schedule II
(to Note Agreement)
<PAGE>
3. Leases of the Company and its Restricted Subsidiaries outstanding on the
Closing Date are as follows:
a. General Electric Capital Corporation lease of one 1,250 Ton Ravne
Press;
b. General Electric Capital Corporation lease of one 300 Ton Blow
Press w/COE Feed line;
c. Ford Equipment Leasing Company (now USL Capital) lease of one HMS
Transfer Unit;
d. Ford Equipment Leasing Company (now USL Capital) lease of one Atlas
Destacker;
e. Ervin Leasing lease of one Ricoh Copier;
f. Hull Lift Truck, Inc. lease of one Advance - Model 3800 lift truck;
g. Crown Credit Co. lease of one Komatsu forklift;
h. Lease Corporation of America lease of four Canon Copiers and
related items;
i. Clarklift of Detroit, Inc. lease of one Royal TA 200;
j. Crown Lift Trucks of Michigan lease of one Komatsu forklift;
k. Crown Lift Trucks of Michigan lease of one Komatsu forklift;
l. Lease Corporation of America lease of three copiers;
m. Lanier lease of one 6112 Lanier Copier, Fax 110;
n. NBD Equipment Finance, Inc. lease of one American Lincoln 6200
Sweeper/Scrubber;
o. Clarklift of Detroit, Inc. lease of four fork lifts;
p. NationsBanc Leasing Corporation of North Carolina lease of one
Verson 2000 Ton Transfer Press, one Xcel CMM System Package, and two
Coil Feed Systems;
q. Great Lakes Technologies Leasing, Inc. lease of one AT&T Paradyne
Acculink Access Controller;
r. Caterpillar Financial Services Corporation lease of one Caterpillar
Lift Truck;
s. Yale Financial Services, Inc. lease of one forklift;
II-2
<PAGE>
t. Caterpillar Financial Services Corporation lease of two Caterpillar
Lift Trucks;
u. Advance Acceptance Corporation lease of one Minuteman 340
Sweeper/Scrubber;
v. Caterpillar Financial Services Corporation lease of four
Caterpillar Lift Trucks;
w. Commercial Leasing, Inc. lease of two Clark Vision 3200IX Floor
Scrubbers;
x. Yale Financial Services, Inc. lease of one forklift;
y. Crown Credit Company lease of two Komatsu forklifts;
z. Ervin Leasing Company lease of one Canon Copier and related items;
aa. Miami Industrial Trucks, Inc. lease of six forklifts;
bb. AT&T Credit Corporation lease of one Merlin Legend phone system;
cc. Pitney Bowes, Inc. lease of one postage meter and scale;
dd. Sharp Electronics Credit Company lease of two Sharp copiers;
ee. Mid Continent Financial Corp. lease of one telephone system;
ff. Penske Truck Leasing Company, L.P. lease of ten trucks;
gg. Automotive Rentals, Inc. lease of fourteen automobiles.
Total annual rental obligations with respect to the foregoing leases, is
approximately $3.5 million.
II-3
<PAGE>
SUBSIDIARIES OF THE COMPANY
1. Restricted Subsidiaries:
Jurisdiction of Percentage of Voting Stock
Name of Subsidiary Incorporation Owned by Company
- ------------------------------------------------------------------------------
Tower Automotive Delaware, Inc. Delaware 100%
(formerly known as MascoTech
Stamping Technologies, Inc.)
- ------------------------------------------------------------------------------
Trylon Corporation Michigan 100%
- ------------------------------------------------------------------------------
R.J. Tower Corporation Kentucky 100%
- ------------------------------------------------------------------------------
R.J. Tower Corporation Indiana 100%
- ------------------------------------------------------------------------------
Kalamazoo Stamping and Die Michigan 100%
Company
- ------------------------------------------------------------------------------
Edgewood Manufacturing Corp. Delaware 100%
- ------------------------------------------------------------------------------
2. Subsidiaries (other than Restricted Subsidiaries):
None
II-4
<PAGE>
DESCRIPTION OF INSURANCE
Coverage (000) Deductible (000)
- --------------------------------------------------------------------
Property $235,621 Blanket $ 50
- --------------------------------------------------------------------
Boiler & Machinery Included in Property --
- --------------------------------------------------------------------
General Liability 2,000 0
- --------------------------------------------------------------------
Automotive 1,000 1
- --------------------------------------------------------------------
Excess Liability 25,000 0
- --------------------------------------------------------------------
Directors & Officers 30,000 250
- --------------------------------------------------------------------
Crime 100 0
- --------------------------------------------------------------------
Fiduciary Liability 1,000 0
- --------------------------------------------------------------------
Workers Comp Statutory N/A
- --------------------------------------------------------------------
Excess Workers Comp Aggregate Retention 1,520 N/A
- --------------------------------------------------------------------
Kalamazoo Only Specific Retention 400 0
- --------------------------------------------------------------------
Nonowned Aircraft 5,000 0
- --------------------------------------------------------------------
II-5
<PAGE>
COMPLIANCE WITH LAW
1. The following underground storage tanks ("USTs") may not comply with
regulatory requirements pertaining to leak detection and/or other
technical requirements.
1974 Cass-Hartman Court
-----------------------
a. 1,000-gallon waste oil/stormwater UST
b. 2,500-gallon waste oil UST
280 Hughes Drive
----------------
c. 5,000-gallon waste oil UST
d. 3,000-gallon waste oil UST
e. 1,000-gallon reportedly unused UST
f. 1,500-gallon reportedly unused UST
g. 550-gallon waste oil UST
1677 Park Drive
---------------
h. 1,200-gallon waste oil UST
1305 Stepke Court
-----------------
i. 2,000-gallon waste oil UST
j. 3,000-gallon waste oil UST
k. 550-gallon cutting water UST.
2. The following facilities do not possess stormwater discharge permits: 1974
Cass-Hartman Court, 280 Hughes Drive, 1677 Park Drive, and 1305 Stepke
Court, Traverse City, Mich.; Bluffton, Ohio; Upper Sandusky, Ohio;
Kendallville, Ind.; and Rochester Hills, Mich.
3. The following facilities do not possess Spill Prevention Control and
Countermeasure Plans ("SPCC Plans"): 1974 Cass-Hatman Court, 280 Hughes
Drive, 1677 Park Drive, and 1305 Stepke Court, Traverse City, Mich.;
Bluffton, Ohio; Upper Sandusky, Ohio; Kendallville, Ind.; and Rochester
Hills, Mich.
4. The following air emission sources do not possess air permits and may
require such permits.
a. Steam cleaners at the 1974 Cass-Hartman and 1305 Stepke Court,
Traverse City, Mich. facilities.
b. Evaporators for oil/water separators at the 1974 Cass-Hartman and
1305 Stepke Court, Traverse City, Mich. facilities.
c. USTs at the 1974 Cass-Hartman, 280 Hughes Drive, 1677 Park Drive,
and 1305 Stepke Court, Traverse City, Mich. facilities.
d. Cure oven at that Bluffton, Ohio facility
II-6
<PAGE>
e. Burn-off oven at that Bluffton, Ohio facility
f. Welders at the Bluffton, Ohio facility
g. Welders at the Upper Sandusky, Ohio facility.
5. The following facilities do not possess current hazard communication plans:
1974 Cass-Hartman Court, 280 Hughes Drive, 1677 Park Drive, and 1305 Stepke
Court, Traverse City, Mich.; Bluffton, Ohio; Upper Sandusky, Ohio;
Kendallville, Ind.; and Rochester Hills, Mich.
6. The following facilities have not performed inventory reporting pursuant to
the Emergency Planning and Community Right-to-Know Act: 1974 Cass-Hartman
Court, 280 Hughes Drive, 1677 Park Drive, and 1305 Stepke Court, Traverse
City, Mich.; Bluffton, Ohio; and Upper Sandusky, Ohio.
7. Certain conditions of contamination and/or suspected contamination exist at
the Kendallville, Ind. facility, as described in the report "Environmental
Due Diligence Assessment for MascoTech Stamping Technologies Inc. 221 South
Progress Drive West, Kendallville, Indiana," Roy F. Weston, Inc., dated May
1996.
II-7
<PAGE>
R. J. TOWER CORPORATION
7.65% Senior Secured Note, Series A,
Due June 1, 2006
No.
___________, ____
$ PPN _____________
R. J. Tower Corporation, a Michigan corporation (the "Company"), for value
received, hereby promises to pay to
or registered assigns
on the first day of June, 2006
the principal amount of
Dollars ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 7.65% per annum from the date hereof until maturity, payable
semiannually on the first of June and December in each year (commencing on
December 1, 1996) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on any
overdue installment of interest, at the Overdue Rate after the due date, whether
by acceleration or otherwise, until paid. "Overdue Rate" shall mean the lesser
of (a) the maximum interest rate permitted by law and (b) 9.65% per annum.
Both the principal hereof and interest hereon are payable at the principal
office of the Company in Grand Rapids, Michigan in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts. If any amount of principal, premium,
if any, or interest on or in respect of this Note becomes due and payable on any
date which is not a Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means any day other than a
Saturday, Sunday or other day on which banks in Grand Rapids, Michigan or New
York, New York are required by law to close or are customarily closed.
This Note is one of the 7.65% Senior Secured Notes, Series A, due June 1,
2006 (the "Series A Notes") of the Company in the aggregate principal amount of
$40,000,000 which, together with the Company's $25,000,000 aggregate principal
amount of 7.82% Senior Secured Notes, Series B, due June 1, 2008 (the "Series B
Notes", said Series B Notes, together with the Series A Notes being hereinafter
referred to collectively as the "Notes") are issued or to be issued under and
pursuant to the terms and provisions of the separate Note Agreements, each dated
as of May 31, 1996 (the "Note Agreements"), entered into by the Company with
the
Exhibit A-1
(to Note Agreement)
<PAGE>
original Purchasers therein referred to and this Note and the holder hereof
are entitled equally and ratably with the holders of all other Notes outstanding
under the Note Agreements to all the benefits provided for thereby or referred
to therein. Reference is hereby made to the Note Agreements for a statement of
such rights and benefits.
This Note and the holders hereof are entitled equally and ratably with the
holders of all other Notes to the rights and benefits provided pursuant to the
terms and provisions of the Subsidiary Guaranties, the Collateral Documents and
the Intercreditor Agreement (as each such term is defined in the Note
Agreements). Reference is hereby made to each of the foregoing for a statement
of the nature and extent of the benefits and security of the Notes afforded
thereby and the rights of the holders of the Notes and the Company in respect
thereof.
This Note and the other Notes outstanding under the Note Agreements may be
declared or otherwise become due prior to their expressed maturity dates and
certain prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
THIS NOTE AND SAID NOTE AGREEMENTS ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
R. J. Tower Corporation
By __________________________________
Its
A-1-2
<PAGE>
R. J. TOWER CORPORATION
7.82% Senior Secured Note, Series B,
Due June 1, 2008
No.
___________, ____
$ PPN _____________
R. J. Tower Corporation, a Michigan corporation (the "Company"), for value
received, hereby promises to pay to
or registered assigns
on the first day of June, 2008
the principal amount of
Dollars ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 7.82% per annum from the date hereof until maturity, payable
semiannually on the first of June and December in each year (commencing on
December 1, 1996) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on any
overdue installment of interest, at the Overdue Rate after the due date, whether
by acceleration or otherwise, until paid. "Overdue Rate" shall mean the lesser
of (a) the maximum interest rate permitted by law and (b) 9.82% per annum.
Both the principal hereof and interest hereon are payable at the principal
office of the Company in Grand Rapids, Michigan in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts. If any amount of principal, premium,
if any, or interest on or in respect of this Note becomes due and payable on any
date which is not a Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means any day other than a
Saturday, Sunday or other day on which banks in Grand Rapids, Michigan or New
York, New York are required by law to close or are customarily closed.
This Note is one of the 7.82% Senior Secured Notes, Series B, due June 1,
2008 (the "Series B Notes") of the Company in the aggregate principal amount of
$25,000,000 which, together with the Company's $40,000,000 aggregate principal
amount of 7.65% Senior Secured Notes, Series A, due June 1, 2006 (the "Series A
Notes", said Series A Notes, together with the Series B Notes being hereinafter
referred to collectively as the "Notes") are issued or to be issued under and
pursuant to the terms and provisions of the separate Note Agreements, each dated
as of May 31, 1996 (the "Note Agreements"), entered into by the Company with
the
Exhibit A-2
(to Note Agreement)
<PAGE>
original Purchasers therein referred to and this Note and the holder hereof
are entitled equally and ratably with the holders of all other Notes outstanding
under the Note Agreements to all the benefits provided for thereby or referred
to therein. Reference is hereby made to the Note Agreements for a statement of
such rights and benefits.
This Note and the holders hereof are entitled equally and ratably with the
holders of all other Notes to the rights and benefits provided pursuant to the
terms and provisions of the Subsidiary Guaranties, the Collateral Documents and
the Intercreditor Agreement (as each such term is defined in the Note
Agreements). Reference is hereby made to each of the foregoing for a statement
of the nature and extent of the benefits and security of the Notes afforded
thereby and the rights of the holders of the Notes and the Company in respect
thereof.
This Note and the other Notes outstanding under the Note Agreements may be
declared or otherwise become due prior to their expressed maturity dates and
certain prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
THIS NOTE AND SAID NOTE AGREEMENTS ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
R. J. Tower Corporation
By ______________________________
Its
A-2-2
<PAGE>
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to you as follows:
1. Subsidiaries. Schedule II attached to the Agreements states the name
of each of the Company's Subsidiaries, its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and/or its Subsidiaries.
Those Subsidiaries listed in Section 1 of Part C of said Schedule II constitute
Restricted Subsidiaries. The Company and each Subsidiary has good and
marketable title to all of the shares it purports to own of the stock of each
Subsidiary, free and clear in each case of any Lien. All such shares have been
duly issued and are fully paid and non-assessable.
2. Corporate Organization and Authority. The Company, and each
Restricted Subsidiary,
(a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary licenses
and permits to own and operate its properties and to carry on its business
as now conducted and as presently proposed to be conducted; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction in which the failure to so qualify
would have a material adverse effect on the properties, business,
prospects, profits or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole.
3. Business and Property. The Offering Memorandum dated May, 1996 (the
"Memorandum") prepared by BA Securities, Inc. generally sets forth the business
conducted and proposed to be conducted by the Company and its Subsidiaries and
the principal properties of the Company and its Subsidiaries.
4. Financial Statements. (a) The consolidated balance sheets of Tower
Automotive and its consolidated subsidiaries as of December 31, 1994 and
December 31, 1995 and the statements of operations, stockholders' investment and
cash flows for the fiscal years ended on said dates, each accompanied by a
report thereon containing an opinion unqualified as to scope limitations imposed
by Tower Automotive and otherwise without qualification except as therein noted,
by Arthur Andersen LLP, have been prepared in accordance with GAAP consistently
applied except as therein noted, present fairly the financial position of Tower
Automotive and its consolidated subsidiaries as of such dates and the results of
their operations and changes in their cash flows for such periods. The
unaudited consolidated balance sheets of Tower Automotive and its consolidated
subsidiaries as of March 31, 1996, and the unaudited statements of operations
and cash flows for the three-month period ended on said date prepared by Tower
Automotive have been prepared in accordance with GAAP consistently applied,
include normal recurring adjustments and reflect all adjustments which are, in
the opinion of Tower
Exhibit B
(to Note Agreement)
<PAGE>
Automotive's management, necessary for a fair presentation of the financial
position of Tower Automotive and its consolidated subsidiaries as of said date
and the results of their operations and changes in their cash flows for such
period.
(b) Since December 31, 1995, there has been no change in the condition,
financial or otherwise, of Tower Automotive and its consolidated subsidiaries as
shown on the consolidated balance sheet as of such date except (i) the
acquisition of Trylon Corporation on January 16, 1996 and (ii) changes in the
ordinary course of business, none of which individually or in the aggregate has
been materially adverse.
(c) In furtherance of the representations contained in clauses (a) and
(b) of this paragraph 4 and without limiting the same, the estimates and
projections contained in the Memorandum are based upon assumptions that the
Company considers reasonable and prudent and customary for corporations of
established reputation engaged in the same or a similar business and owning and
operating similar properties as the Company.
5. Indebtedness. Schedule II attached to the Agreements correctly
describes all Indebtedness (including, without limitation, all secured
Indebtedness), Capitalized Leases and operating leases of the Company and its
Restricted Subsidiaries outstanding on the Closing Date.
6. Full Disclosure. Neither the financial statements referred to in
paragraph 4 hereof nor the Agreements, the Memorandum or any other written
statement furnished by the Company to you in connection with the negotiation of
the sale of the Notes, contains any untrue statement of a material fact or omits
a material fact necessary to make the statements contained therein or herein not
misleading. There is no fact peculiar to the Company or its Subsidiaries which
the Company has not disclosed to you in writing which materially affects
adversely and which, so far as the Company can now foresee, will materially
affect adversely the properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Restricted Subsidiaries, taken
as a whole.
7. Pending Litigation. There are no proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Restricted Subsidiary in any court or before any governmental authority or
arbitration board or tribunal which involve the possibility of materially and
adversely affecting the properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Restricted Subsidiaries, taken
as a whole, or impairing the ability of the Company to issue and deliver the
Notes or to comply with the provisions of the Agreements, the Collateral
Documents or the Intercreditor Agreement or impairing the ability of the
Restricted Subsidiaries to comply with the provisions of the Subsidiary
Guaranties. Neither the Company nor any Restricted Subsidiary has received
notice in respect of, nor does it have any knowledge of, any default with
respect to any judgment, order, writ, injunction, or decree of any court,
governmental authority or arbitration board or tribunal that, in the aggregate,
could reasonably be expected to have a material adverse effect on the
properties, business, prospects, profits or condition (financial or otherwise)
of the Company and its Subsidiaries, taken as a whole.
B-2
<PAGE>
8. Title to Properties. To the best knowledge of the Company, the
Company and each Restricted Subsidiary has good and marketable title in fee
simple (or its equivalent under applicable law) to all parcels of real property
and has good title to all the other items of property it purports to own,
including that reflected in the most recent balance sheet referred to in
paragraph 4 hereof, except (a) as sold or otherwise disposed of in the ordinary
course of business, (b) Liens permitted by the Agreements and (c) Liens and
defects which could not reasonably be expected to have a material adverse effect
on the properties, business, prospects, profits or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole. The Company
and each Restricted Subsidiary enjoys peaceful and undisturbed possession of all
property which is leased by it and which is material for the operation of its
respective business.
9. Insurance. The Company and each of its Restricted Subsidiaries
maintain the insurance coverage required by (S)5.2 of the Agreements as more
fully described in Schedule II attached to the Agreements and maintain all
insurance coverage otherwise required by the applicable provisions of the
Collateral Documents.
10. Patents and Trademarks. To the best knowledge of the Company, the
Company and each Restricted Subsidiary owns or possesses all the patents,
trademarks, trade names, service marks, copyrights, licenses and rights with
respect to the foregoing, except where the failure to so own or possess would
not have a material adverse effect on the properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, without any material known conflict with the
rights of others.
11. Sale Is Legal and Authorized. (a) The sale of the Notes and
compliance by the Company with all of the provisions of the Agreements, the
Collateral Documents, the Intercreditor Agreement and the Notes--
(i) are within the corporate powers of the Company; and
(ii) will not violate any provisions of any law or any order of any
court or governmental authority or agency and will not conflict with or
result in any breach of any of the provisions of or constitute a default
under or result in the creation or imposition of any Lien upon any of the
property of the Company pursuant to the provisions of the Certificate of
Incorporation or By-laws of the Company or any indenture or other agreement
or instrument to which the Company is a party or by which it may be bound;
and
(b) the Notes, the Agreements, the Collateral Documents and the
Intercreditor Agreement have been duly authorized by proper corporate action on
the part of the Company (no action by the stockholders of the Company being
required by law, by the Certificate of Incorporation or By-laws of the Company
or otherwise), have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations, contracts and agreements of
the Company enforceable in accordance with their respective terms.
B-3
<PAGE>
12. No Defaults. No Default or Event of Default has occurred and is
continuing. Neither the Company nor any of its Subsidiaries is in default in
the payment of principal or interest on any Indebtedness. Neither the Company
nor any of its Subsidiaries is in default under any other instrument or
instruments or agreements under and subject to which any Indebtedness has been
issued and no event has occurred and is continuing under the provisions of any
such instrument or agreement which with the lapse of time or the giving of
notice, or both, would constitute an event of default thereunder, which default
or event could reasonably be expected to have a material adverse effect on the
properties, business, prospects, profits or condition (financial or otherwise)
of the Company and its Subsidiaries, taken as a whole.
13. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of the
Agreements, the Collateral Documents or the Intercreditor Agreement or the
issuance, sale or delivery of the Notes or compliance by the Company with any of
the provisions of the Agreements, the Collateral Documents, the Intercreditor
Agreement or the Notes.
14. Taxes. All tax returns required to be filed by the Company or any
Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees and other governmental charges upon the Company or any
Subsidiary or upon any of their respective properties, income or franchises,
which are shown to be due and payable in such returns have been paid, except:
(i) those presently payable without penalty or interest, (ii) those presently
being contested in good faith by appropriate proceedings diligently conducted
for which such reserves or other appropriate provision, if any, as shall be
required by GAAP shall have been made, and (iii) those which the failure to file
or pay will not have a material adverse effect on the properties, business,
prospects, profits or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole. For all taxable years ending on or before
December 31, 1991, the Federal income tax liability of the Company and its
Subsidiaries has been satisfied and either the period of limitations on
assessment of additional Federal income tax has expired or the Company and its
Subsidiaries have entered into an agreement with the Internal Revenue Service
closing conclusively the total tax liability for the taxable year. The Company
does not know of any proposed additional tax assessment against it for which
adequate provision has not been made on its accounts, and no material
controversy in respect of additional Federal or state income taxes due since
said date is pending or to the knowledge of the Company threatened. The
provisions for income taxes on the books of the Company and each Subsidiary are
adequate for all open years and for its current fiscal period, and the
provisions for all other taxes on the books of the Company and each Subsidiary
are adequate in all material respects for all open years and for its current
fiscal period.
15. Use of Proceeds. The net proceeds from the sale of the Notes will
be used to finance the acquisition of MascoTech as more fully described in the
Memorandum and for general working capital. None of the transactions
contemplated in the Agreements (including, without limitation thereof, the use
of proceeds from the issuance of the Notes) will violate or result in a
violation of Section 7 of the Exchange Act or any regulation issued pursuant
thereto, including, without limitation, Regulations G, T and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R., Chapter II. Neither the
Company nor any Subsidiary owns or
B-4
<PAGE>
intends to carry or purchase any "margin stock" within the meaning of said
Regulation G. None of the proceeds from the sale of the Notes will be used to
purchase, or refinance any borrowing the proceeds of which were used to
purchase, any "security" within the meaning of the Exchange Act.
16. Private Offering. Neither the Company, directly or indirectly, nor
any agent on its behalf has offered or will offer the Notes, the Subsidiary
Guaranties or any similar Security to or has solicited or will solicit an offer
to acquire the Notes, the Subsidiary Guaranties or any similar Security from or
has otherwise approached or negotiated or will approach or negotiate in respect
of the Notes, the Subsidiary Guaranties or any similar Security with any Person
other than the Purchasers and not more than 60 other institutional investors,
each of whom was offered a portion of the Notes at private sale for investment.
Neither the Company, directly or indirectly, nor any agent on its behalf has
offered or will offer the Notes, the Subsidiary Guaranties or any similar
Security to or has solicited or will solicit an offer to acquire the Notes, or
any similar Security from any Person so as to bring the issuance and sale of the
Notes within the provisions of Section 5 of the Securities Act of 1933, as
amended.
17. No Violation. Neither the Company nor any Subsidiary is in
violation of (a) its Certificate of Incorporation or By-laws or (b) any
provision of any agreement, indenture or other instrument to which the Company
or any such Subsidiary is a party or by which it may be bound, except for the
violation of any such provision which would not materially affect adversely the
properties, business, prospects, profits or condition (financial or otherwise)
of the Company and its Subsidiaries, taken as a whole, or the ability of the
Company to perform its obligations under the Agreements, the Collateral
Documents, the Intercreditor Agreement and the Notes and neither the Company nor
any Subsidiary is a party to, or bound by, any agreement, indenture or
instrument which would materially adversely affect the properties, business,
prospects, profits or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, or the ability of the Company to perform its
obligations under the Agreements, the Collateral Documents, the Intercreditor
Agreement or the Notes. Neither the Company nor any Restricted Subsidiary is a
party to any agreement which restricts or prohibits any Restricted Subsidiary
from paying dividends to the Company other than the restrictions contained in
the agreements identified as items 2(i) and 2 (j) of Part A to Schedule II.
18. ERISA. The consummation of the transactions provided for in the
Agreements and compliance by the Company with the provisions thereof and the
Notes issued thereunder will not involve any prohibited transaction within the
meaning of ERISA or Section 4975 of the Code. Each Plan complies in all
material respects with all applicable statutes and governmental rules and
regulations, and (a) no Reportable Event has occurred and is continuing with
respect to any Plan, (b) neither the Company nor any ERISA Affiliate has
withdrawn from any Plan or Multiemployer Plan or instituted steps to do so, and
(c) no steps have been instituted to terminate any Plan. No condition exists or
event or transaction has occurred in connection with any Plan which could result
in the incurrence by the Company or any ERISA Affiliate of any material
liability, fine or penalty. No Plan maintained by the Company or any ERISA
Affiliate, nor any trust created thereunder, has incurred any "accumulated
funding deficiency" as defined in Section 302 of ERISA nor does the present
value of all benefits vested under all Plans exceed, as of the last annual
valuation date, the value of the assets of the Plans allocable to such
B-5
<PAGE>
vested benefits by an amount greater than $500,000 in the aggregate. The Company
and all ERISA Affiliates have satisfied all of their respective contribution
obligations in respect of each Multiemployer Plan. The expected post-retirement
benefit obligation (determined as of the last day of the Company's most recently
ended fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to continuation
coverage mandated by section 4980B of the Code) of the Company and its
Subsidiaries has been disclosed in Note 8 to the Tower Automotive consolidated
financial statements contained in the Tower Automotive Annual Report for the
fiscal year ended December 31, 1995. Neither the Company nor any ERISA Affiliate
is or has been a "contributing sponsor" in any multiple employer pension plan
within the meaning of Section 4001 of ERISA.
19. Compliance with Law. (a) Neither the Company nor any Subsidiary
(1) is in violation of any law, ordinance, franchise, governmental rule or
regulation to which it is subject; or (2) has failed to obtain any license,
permit, franchise or other governmental authorization necessary to the ownership
of its property or to the conduct of its business, which violation or failure to
obtain would materially affect adversely the business, prospects, profits,
properties or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, or impair the ability of the Company to perform
its obligations contained in the Agreements, the Collateral Documents, the
Intercreditor Agreement or the Notes. Neither the Company nor any Subsidiary is
in default with respect to any order of any court or governmental authority or
arbitration board or tribunal.
(b) Except as disclosed in Schedule II hereto, the Company and its
Subsidiaries are, to the best knowledge of the Company, in compliance with all
applicable Environmental Laws, the failure to comply with which would materially
affect adversely the properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole or
the ability of the Company to perform its obligations under the Agreements, the
Collateral Documents, the Intercreditor Agreement or the Notes.
20. Investment Company Act. The Company is not, and is not directly or
indirectly controlled by or acting on behalf of any Person which is, required to
register as an "investment company" under the Investment Company Act of 1940, as
amended.
21. Foreign Assets Control Regulations, etc. Neither the Company nor
any Affiliate of the Company is, by reason of being a "national" of a
"designated foreign country" or a "specially designated national" within the
meaning of the Regulations of the Office of Foreign Assets Control, United
States Treasury Department (31 C.F.R., Subtitle B, Chapter V), or for any other
reason, subject to any restriction or prohibition under, or is in violation of,
any Federal statue or Presidential Executive Order, or any rules or regulations
of any department, agency or administrative body promulgated under any such
statute or order, concerning trade or other relations with any foreign country
or any citizen or national thereof or the ownership or operation of any
property.
22. Public Utility Holding Company Act. The Company is not a "holding
company" or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or
B-6
<PAGE>
of a "subsidiary company" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended.
23. Federal Power Act. The Company is not a "public utility" as such
term is defined in the Federal Power Act, as amended.
24. Interstate Commerce Act. Neither the Company nor any of its
Subsidiaries is a "rail carrier" or a person controlled by or affiliated with a
"rail carrier", within the meaning of Title 49, U.S.C., and neither the Company
nor any of its respective Subsidiaries is a "carrier" to which 49 U.S.C. (S)
11301(b)(1) is applicable.
25. Lien Recordation. The Collateral Documents (or financing statements
or similar notices thereof to the extent permitted or required by applicable
law) have been filed for record or recorded in all public offices wherein such
filing or recordation is necessary to perfect the security interest granted by
such Collateral Documents in the collateral therein described as against
creditors of and purchasers from the Company and its Subsidiaries and the
Collateral Documents create a valid and perfected first security interest in
such collateral effective as against creditors of and purchasers from the
Company and its Subsidiaries subject only to encumbrances expressly permitted by
the terms of the Agreements and such Collateral Documents.
26. Solvency. (a) The Company is solvent, has capital not unreasonably
small in relation to its business or any contemplated or undertaken transaction
and has assets having a value both at fair valuation and at present fair
saleable value greater than the amount required to pay the Company's debts as
they become due and greater than the amount that will be required to pay the
Company's probable liability on its existing debts as they become absolute and
matured. The Company does not intend to incur or believe or should have
believed that it will incur, debts beyond its ability to pay such debts as they
become due. The Company will not be rendered insolvent by the execution,
delivery and performance of its obligations under the Agreements, the Collateral
Documents, the Intercreditor Agreement or the Notes. The Company does not
intend to hinder, delay or defraud its creditors by or through the execution,
delivery or performance of its obligations under the Agreements, the Collateral
Documents, the Intercreditor Agreement or the Notes.
(b) Each of the Subsidiary Guarantors is solvent, has capital not
unreasonably small in relation to its business or any contemplated or undertaken
transaction and has assets having a value both at fair valuation and at present
fair saleable value greater than the amount required to pay such Subsidiary's
debts as they become due and greater than the amount that will be required to
pay the Subsidiary's probable liability on its existing debts as they become
absolute and matured. No Subsidiary Guarantor intends to incur or believes or
should have believed that it will incur, debts beyond its ability to pay such
debts as they become due. No Subsidiary Guarantor will be rendered insolvent by
the execution, delivery and performance of its obligations under its respective
Subsidiary Guaranty. No Subsidiary Guarantor intends to hinder, delay or
defraud its creditors by or through the execution, delivery or performance of
its obligations under its respective Subsidiary Guaranty.
B-7
<PAGE>
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Chapman and Cutler, special counsel to the
Purchasers, called for by (S)4.1(C) of the Agreements, shall be dated as of and
delivered on each Closing Date and addressed to the Purchasers, shall be
satisfactory in form and substance to the Purchasers and shall be to the effect
that:
1. The Company is a corporation, validly existing and in good
standing under the laws of the State of Michigan and has the corporate
power and the corporate authority to execute and deliver the Note
Agreements and to issue the Notes.
2. The Agreements have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed and
delivered by the Company and constitute the legal, valid and binding
contracts of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency or similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
3. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Agreements does not, under existing law,
require the registration of the Notes under the Securities Act of 1933, as
amended, or the qualification of an indenture under the Trust Indenture Act
of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinions of
Kirkland & Ellis and Varnum, Riddering, Schmidt & Howlett is satisfactory in
scope and form to Chapman and Cutler and that, in their opinion, the Purchasers
are justified in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and Cutler
may rely solely upon an examination of the Articles of Incorporation certified
by, and a certificate of good standing of the Company from, the Secretary of
State of the State of Michigan, the By-laws of the Company and the general
business corporation law of the State of Michigan. The opinion of Chapman and
Cutler is limited to the laws of the State of New York, the general business
corporation law of the State of Michigan and the Federal laws of the United
States.
With respect to matters of fact upon which such opinion is based, Chapman
and Cutler may rely on appropriate certificates of public officials and officers
of the Company.
Exhibit D
(to Note Agreement)
<PAGE>
DESCRIPTION OF CLOSING OPINION OF COUNSEL TO THE COMPANY
The closing opinions of Kirkland & Ellis, counsel for the Company, and of
Varnum, Riddering, Schmidt & Howlett, Michigan counsel to the Company, which are
called for by (S)4.1(C) of the Agreements, shall be dated as of and delivered on
each Closing Date and addressed to the Purchasers, shall be satisfactory in
scope and form to the Purchasers and, taken together, shall be to the effect
that:
1. The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Michigan, has
the corporate power and the corporate authority to execute and perform the
Agreements, the Collateral Documents to which it is a party and the
Intercreditor Agreement and to issue the Notes and has the full corporate
power and the corporate authority to conduct the activities in which it is
now engaged and is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction in which the character of the
properties owned or leased by it or the nature of the business transacted
by it makes such licensing or qualification necessary and all of the issued
and outstanding shares of Capital Stock of the Company have been duly
issued, are fully paid and non-assessable and are owned by Tower
Automotive.
2. Tower Automotive is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, has
the corporate power and the corporate authority to execute and perform the
Collateral Documents to which it is a party and the Intercreditor Agreement
and has the full corporate power and the corporate authority to conduct the
activities in which it is now engaged and is duly licensed or qualified and
is in good standing as a foreign corporation in each jurisdiction in which
the character of the properties owned or leased by it or the nature of the
business transacted by it makes such licensing or qualification necessary.
3. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has the corporate power and the corporate authority to
execute and perform its respective Subsidiary Guaranty, the Collateral
Documents to which it is a party and the Intercreditor Agreement and has
the full corporate power and the corporate authority to conduct the
activities in which it is now engaged and is duly licensed or qualified and
is in good standing as a foreign corporation in each jurisdiction in which
the character of the properties owned or leased by it or the nature of the
business transacted by it makes such licensing or qualification necessary
and all of the issued and outstanding shares of Capital Stock of each such
Subsidiary have been duly issued, are fully paid and non-assessable and are
owned by the Company, by one or more Subsidiaries, or by the Company and
one or more Subsidiaries.
4. Each Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding
contract of the Company enforceable in accordance with its terms, subject
to bankruptcy, insolvency or similar laws affecting creditors' rights
Exhibit E
(to Note Agreement)
<PAGE>
generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or
at law).
5. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
6. Each of the Subsidiary Guaranties has been duly authorized by
all necessary corporate action on the part of the relevant Restricted
Subsidiary, has been duly executed and delivered by the relevant Restricted
Subsidiary and constitutes the legal, valid and binding obligation of the
relevant Restricted Subsidiary enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in
a proceeding in equity or at law).
7. Each of the Collateral Documents has been duly authorized by all
necessary corporate action on the part of the Company, the relevant
Restricted Subsidiary or Tower Automotive, has been duly executed and
delivered by the Company, the relevant Restricted Subsidiary or Tower
Automotive and constitutes the legal, valid and binding obligation of the
Company, the relevant Restricted Subsidiary or Tower Automotive enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
8. No approval, consent or withholding of objection on the part of,
or filing, registration or qualification with, any governmental body,
Federal, state or local, is necessary in connection with the execution,
delivery and performance by the Company of the Agreements, the Notes, the
Collateral Documents to which it is a party or the Intercreditor Agreement.
9. No approval, consent or withholding of objection on the part of,
or filing, registration or qualification with any governmental body,
Federal, state or local, is necessary in connection with the execution,
delivery and performance by the relevant Restricted Subsidiaries or Tower
Automotive of the Subsidiary Guaranties, the Collateral Documents or the
Intercreditor Agreement.
10. The issuance and sale of the Notes and the execution, delivery
and performance by the Company of the Agreements and the Collateral
Documents to which it is a party do not (a) conflict with or result in any
breach of any of the provisions of or constitute a default under or result
in the creation or imposition of any Lien upon any of the property of the
Company (other than the Liens created by the Collateral Documents) pursuant
to the provisions of the Articles of Incorporation or By-laws of the
Company or
E-2
<PAGE>
any indenture or other agreement or instrument known to such
counsel to which the Company is a party or by which the Company may be
bound or (b) result in a violation of any laws, rules or regulation or any
judgment, order, decree, determination or award of any court or
governmental authority, the violation of which would impair the ability of
the Company to issue and deliver the Notes or to comply with the provisions
of the Agreements, the Collateral Documents to which it is a party or the
Intercreditor Agreement.
11. The execution, delivery and performance by the Restricted
Subsidiaries and Tower Automotive of each of their respective Subsidiary
Guaranties, the Collateral Documents and the Intercreditor Agreement does
not conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of any
Lien upon any property of any of the Restricted Subsidiaries or Tower
Automotive (other than the Liens created by the Collateral Documents)
pursuant to the provisions of the Articles of Incorporation or By-laws of
any of the Restricted Subsidiaries or Tower Automotive or any agreement or
other instrument known to such counsel to which any of the Restricted
Subsidiaries or Tower Automotive is a party or by which any of the
Restricted Subsidiaries or Tower Automotive may be bound.
12. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Agreements and the delivery of the
Subsidiary Guaranties do not, under existing law, require the registration
of the Notes or the Subsidiary Guaranties under the Securities Act of 1933,
as amended, or the qualification of an indenture under the Trust Indenture
Act of 1939, as amended.
13. The issuance of the Notes and the use of the proceeds of the
sale of the Notes in accordance with the provisions of and contemplated by
the Agreements do not violate or conflict with Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System.
14. There is no litigation pending or, to the best knowledge of
such counsel, threatened which in such counsel's opinion could reasonably
be expected to have a materially adverse effect on the Company's business
or assets or which would impair the ability of the Company to issue and
deliver the Notes or to comply with the provisions of the Agreements, the
Collateral Documents to which it is a party or the Intercreditor Agreement.
The opinion of Kirkland & Ellis shall cover such other matters relating to
the sale of the Notes as the Purchasers may reasonably request. With respect to
matters of fact on which such opinion is based, such counsel shall be entitled
to rely on appropriate certificates of public officials and officers of the
Company.
E-3
<PAGE>
Exhibit 4.14
R. J. TOWER CORPORATION
7.65% Senior Secured Note, Series A,
Due June 1, 2006
No. AR-1 May 31, 1996
$7,500,000 PPN 74964@ AA 5
R. J. Tower Corporation, a Michigan corporation (the "Company"), for value
received, hereby promises to pay to
Jefferson-Pilot Life Insurance Company
or registered assigns
on the first day of June, 2006
the principal amount of
Seven Million Five Hundred Thousand Dollars ($7,500,000)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 7.65% per annum from the date hereof until maturity, payable
semiannually on the first of June and December in each year (commencing on
December 1, 1996) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on any
overdue installment of interest, at the Overdue Rate after the due date, whether
by acceleration or otherwise, until paid. "Overdue Rate" shall mean the lesser
of (a) the maximum interest rate permitted by law and (b) 9.65% per annum.
Both the principal hereof and interest hereon are payable at the principal
office of the Company in Grand Rapids, Michigan in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts. If any amount of principal, premium,
if any, or interest on or in respect of this Note becomes due and payable on any
date which is not a Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means any day other than a
Saturday, Sunday or other day on which banks in Grand Rapids, Michigan or New
York, New York are required by law to close or are customarily closed.
This Note is one of the 7.65% Senior Secured Notes, Series A, due June 1,
2006 (the "Series A Notes") of the Company in the aggregate principal amount of
$40,000,000 which, together with the Company's $25,000,000 aggregate principal
amount of 7.82% Senior Secured Notes, Series B, due June 1, 2008 (the "Series B
Notes", said Series B Notes, together with the Series A Notes being hereinafter
referred to collectively as the "Notes") are issued or to be issued under and
pursuant to the terms and provisions of the separate Note Agreements, each
<PAGE>
dated as of May 31, 1996 (the "Note Agreements"), entered into by the Company
with the original Purchasers therein referred to and this Note and the holder
hereof are entitled equally and ratably with the holders of all other Notes
outstanding under the Note Agreements to all the benefits provided for thereby
or referred to therein. Reference is hereby made to the Note Agreements for a
statement of such rights and benefits.
This Note and the holders hereof are entitled equally and ratably with the
holders of all other Notes to the rights and benefits provided pursuant to the
terms and provisions of the Subsidiary Guaranties, the Collateral Documents and
the Intercreditor Agreement (as each such term is defined in the Note
Agreements). Reference is hereby made to each of the foregoing for a statement
of the nature and extent of the benefits and security of the Notes afforded
thereby and the rights of the holders of the Notes and the Company in respect
thereof.
This Note and the other Notes outstanding under the Note Agreements may be
declared or otherwise become due prior to their expressed maturity dates and
certain prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
-2-
<PAGE>
THIS NOTE AND SAID NOTE AGREEMENTS ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
R. J. Tower Corporation
By /s/ Anthony A. Barone
-----------------------------
Its Vice President
---------------------------
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<PAGE>
Exhibit 4.15
R. J. TOWER CORPORATION
7.82% Senior Secured Note, Series B,
Due June 1, 2008
No. BR-1 May 31, 1996
$25,000,000 PPN 74964@ AB 3
R. J. Tower Corporation, a Michigan corporation (the "Company"), for value
received, hereby promises to pay to
Teachers Insurance and Annuity Association of America
or registered assigns
on the first day of June, 2008
the principal amount of
Twenty-five Million Dollars ($25,000,000)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 7.82% per annum from the date hereof until maturity, payable
semiannually on the first of June and December in each year (commencing on
December 1, 1996) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on any
overdue installment of interest, at the Overdue Rate after the due date, whether
by acceleration or otherwise, until paid. "Overdue Rate" shall mean the lesser
of (a) the maximum interest rate permitted by law and (b) 9.82% per annum.
Both the principal hereof and interest hereon are payable at the principal
office of the Company in Grand Rapids, Michigan in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts. If any amount of principal, premium,
if any, or interest on or in respect of this Note becomes due and payable on any
date which is not a Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means any day other than a
Saturday, Sunday or other day on which banks in Grand Rapids, Michigan or New
York, New York are required by law to close or are customarily closed.
This Note is one of the 7.82% Senior Secured Notes, Series B, due June 1,
2008 (the "Series B Notes") of the Company in the aggregate principal amount of
$25,000,000 which, together with the Company's $40,000,000 aggregate principal
amount of 7.65% Senior Secured Notes, Series A, due June 1, 2006 (the "Series A
Notes", said Series A Notes, together with the Series B Notes being hereinafter
referred to collectively as the "Notes") are issued or to be issued under and
pursuant to the terms and provisions of the separate Note Agreements, each
<PAGE>
dated as of May 31, 1996 (the "Note Agreements"), entered into by the Company
with the original Purchasers therein referred to and this Note and the holder
hereof are entitled equally and ratably with the holders of all other Notes
outstanding under the Note Agreements to all the benefits provided for thereby
or referred to therein. Reference is hereby made to the Note Agreements for a
statement of such rights and benefits.
This Note and the holders hereof are entitled equally and ratably with the
holders of all other Notes to the rights and benefits provided pursuant to the
terms and provisions of the Subsidiary Guaranties, the Collateral Documents and
the Intercreditor Agreement (as each such term is defined in the Note
Agreements). Reference is hereby made to each of the foregoing for a statement
of the nature and extent of the benefits and security of the Notes afforded
thereby and the rights of the holders of the Notes and the Company in respect
thereof.
This Note and the other Notes outstanding under the Note Agreements may be
declared or otherwise become due prior to their expressed maturity dates and
certain prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
-2-
<PAGE>
THIS NOTE AND SAID NOTE AGREEMENTS ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
R. J. Tower Corporation
By /s/ Anthony A. Barone
-------------------------------
Its Vice President
-----------------------------
-3-
<PAGE>
Exhibit 4.16
SUBSIDIARIES GUARANTY
This Subsidiaries Guaranty is made as of this 31st day of May, 1996 (this
"Guaranty") by the undersigned, R.J. Tower Corporation, an Indiana corporation,
Edgewood Manufacturing Corp., a Delaware corporation, R.J. Tower Corporation, a
Kentucky corporation, Kalamazoo Stamping and Die Company, a Michigan
corporation, Trylon Corporation, a Michigan corporation, and any other Person
which becomes obligated as a guarantor hereunder pursuant to Section 7.6 below
(individually a "Guarantor" collectively "Guarantors") to the Noteholders (as
defined below).
RECITALS
A. R.J. Tower Corporation, a Michigan corporation (the "Company"), is
presently the direct owner of 100% of the issued and outstanding shares of
capital stock of each Guarantor.
B. In order to repay certain indebtedness incurred in connection with the
acquisition of certain entities and for other general corporate purposes, the
Company is entering into a Note Agreements, each dated as of May 31, 1996 (the
"Note Agreements"), between the Company and the purchasers named on Schedule I
attached to said Note Agreements (the "Purchasers"), providing for, among other
things, the issue and sale by the Company of its 7.65% Senior Secured Notes,
Series A, due June 1, 2006 to be issued in an aggregate principal amount equal
to $40,000,000 (the "Series A Notes") and (ii) its 7.82% Senior Secured Notes,
Series B, due June 1, 2008 to be issued in the aggregate principal amount equal
to $25,000,000 (the "Series B Notes" together with the Series A Notes, the
"Notes"). The Purchasers whose names are entered into the Note Register
pursuant to Section 9.1 of the Note Agreements as the owner or holder of one or
more Notes is hereinafter referred to individually as a "Noteholder" and
collectively as the "Noteholders."
C. The Purchasers have required as a condition of their purchase of the
Notes that the Guarantors enter into this Guaranty as support for the Notes and
the Guarantors, by reason of their interest in the repayment by the Company of
certain indebtedness and in order to induce the Purchasers to purchase the Notes
and thereby provide the Company with funds for the repayment such indebtedness
and for other general corporate purposes, have agreed to execute this Guaranty.
Now, Therefore, in consideration of the premises and for the purpose of
inducing the purchase and acceptance of the Notes by the Purchasers and in
further consideration of the sum of Ten Dollars ($10.00) paid to each Guarantor
by the Purchasers, the receipt whereof is hereby acknowledged, each Guarantor
does hereby covenant and agree as follows:
<PAGE>
Section 1. Definitions.
Unless otherwise provided herein, all capitalized or other terms in this
Guaranty shall have the meanings specified in the Note Agreements. The term
"Noteholders" as used herein shall include any successors or assigns of the
Noteholders, in accordance with the Note Agreements.
Section 2. Guaranty.
Each of the Guarantors hereby, jointly and severally, unconditionally and
irrevocably guarantees to the Noteholders the due and punctual payment to the
Noteholders when due, whether by acceleration or otherwise, of all amounts,
including, without limitation, principal, premium, if any, interest (including
interest accruing on or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding by the
Company, whether or not a claim for post-filing or post-petition interest is
allowed in such a proceeding), and all other liabilities and obligations, direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred, which may arise under, out of, or in connection with the
Notes and the Note Agreements whether on account of principal, premium, if any,
interest, reimbursement obligations, fees, indemnities, and reasonable costs and
expenses (including without limitation, all reasonable fees and disbursements of
counsel to the Noteholders) or otherwise, and hereby agrees that if the Company
shall fail to pay any of such amounts when and as the same shall be due and
payable, or shall fail to perform and discharge any covenant, representation or
warranty in accordance with the terms of the Notes or the Note Agreements
(subject, in each case, to any applicable periods of grace or cure), it will
forthwith pay to the Noteholders, an amount equal to any such amount and will
pay any and all damages that may be incurred or suffered in consequence thereof
by the Noteholders and all reasonable expenses, including reasonable attorneys'
fees, that may be incurred by the Noteholders and in enforcing such covenant,
representation or warranty of the Company and in enforcing the covenants and
agreements of this Guaranty.
Section 3. Unconditional Character of Guaranty.
(a) The obligations of each Guarantor under this Guaranty shall be
absolute and unconditional, and shall be a guaranty of payment and performance
and not of collection, irrespective of the validity, regularity or
enforceability of the Notes and the Note Agreements or any provision thereof,
the absence of any action to enforce the same, any waiver or consent with
respect to or any amendment of any provision thereof, the recovery of any
judgment against any Person or action to enforce the same, any failure or delay
in the enforcement of the obligations of the Company under the Notes or the Note
Agreements, or any setoff, counterclaim, recoupment, limitation, defense or
termination, whether with or without notice to any of the Guarantors. Each of
the Guarantors hereby waives diligence, demand for payment, filing of claims
with any court, any proceeding to enforce any provision of the Notes executed by
the Company, or the Note Agreements, any right to require a proceeding first
against the Company or against any other guarantor or other party providing
collateral, or to exhaust any security for the performance of the obligations of
the Company, any protest, presentment, notice or demand
-2-
<PAGE>
whatsoever, and each of the Guarantors hereby covenants that this Guaranty shall
not be terminated, discharged or released except, subject to Section 7.7 hereof,
upon final payment in full in cash subject to no revocation or rescission of all
amounts due and to become due from the Company, as and to the extent described
in Section 2 above, and only to the extent of any such payment, performance and
discharge. Each of the Guarantors further covenants that no security now or
subsequently held by the Noteholders for the payment of the Indebtedness
evidenced by the Notes made by the Company under the Note Agreements, or for the
payment of any other Indebtedness of the Company to the Noteholders under the
Note Agreements, whether in the nature of a security interest, pledge, lien,
assignment, setoff, suretyship, guaranty, indemnity, insurance or otherwise, and
no act, omission or other conduct of Noteholders in respect of such security
(excluding fraud, gross negligence or willful misconduct), shall affect in any
manner whatsoever the unconditional obligation of this Guaranty, and the right
of each of the Noteholders to enforce the same, in their respective sole
discretion and without notice to any of the Guarantors, may release, exchange,
enforce, apply the proceeds of and otherwise deal with any such security without
affecting in any manner the unconditional obligation of this Guaranty.
(b) Without limiting the generality of the foregoing, such obligations,
and the rights of the Noteholders to enforce the same, by proceedings, whether
by action at law, suit in equity or otherwise, shall not be in any way affected
by:
(i) any insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, dissolution, winding up or other proceeding
involving or affecting the Company or others; or
(ii) any change in the ownership of any of the capital stock of the
Company any other party providing collateral for any indebtedness covered
by this Guaranty, or any of their respective Affiliates; or
(iii) any default, failure or delay, willful or otherwise, in the
performance by the Company or any other Person of any obligations of any
kind or character whatsoever of the Company or any other Person (including,
without limitation, the obligations and undertakings of the Company or any
other Person under the Notes or the Note Agreements); or
(iv) impossibility or illegality of performance on the part of the
Company or any other Person of its obligations under the Notes or the Note
Agreements or any other instrument; or
(v) in respect of the Company or any other Person, any change of
circumstances, whether or not foreseen or foreseeable, whether or not
imputable to the Company or any other Person, or other impossibility of
performance through fire, explosion, accident, labor disturbance, floods,
droughts, embargoes, wars (whether or not declared), civil commotions, acts
of God or the public enemy, delays or failure of suppliers or carriers,
inability to obtain materials, action of any Federal or state regulatory
body or agency, change of law or any other causes affecting performance, or
any other
-3-
<PAGE>
force majeure, whether or not beyond the control of the Company or any
other Person and whether or not of the kind hereinbefore specified; or
(vi) any attachment, claim, demand, charge, Lien, order, process,
encumbrance or any other happening or event or reason, similar or
dissimilar to the foregoing, or any withholding or diminution at the
source, by reason of any taxes, assessments, expenses, indebtedness,
obligations or liabilities of any character, foreseen or unforeseen, and
whether or not valid, incurred by or against any Person, or any claims,
demands, charges or Liens of any nature, foreseen or unforeseen, incurred
by any Person, or against any sums payable under this Guaranty, so that
such sums would be rendered inadequate or would be unavailable to make the
payments herein provided; or
(vii) any order, judgment, decree, ruling or regulation (whether or
not valid) of any court of any nation or of any political subdivision
thereof or any body, agency, department, official or administrative or
regulatory agency of any thereof or any other action, happening, event or
reason whatsoever which shall delay, interfere with, hinder or prevent, or
in any way adversely affect, the performance by any party of its respective
obligations under the Notes or the Note Agreements or any instrument
relating thereto; or
(viii) the failure of any of the Guarantors to receive any benefit
from or as a result of its execution, delivery and performance of this
Guaranty; or
(ix) any act or failure to act with regard to the Notes or the Note
Agreements or anything which might vary the risk of any of the Guarantors;
or
(x) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any of the Guarantors in respect
of the obligations of such Guarantor under this Guaranty;
provided, that the specific enumeration of the above-mentioned acts, failures or
omissions shall not be deemed to exclude any other acts, failures or omissions,
though not specifically mentioned above, it being the purpose and intent of this
Guaranty that the obligations of the Guarantors shall be absolute and
unconditional and shall not be discharged, impaired or varied except by the
payment in cash of the principal of, premium, if any, and interest on the Notes
in accordance with their respective terms whenever the same shall become due and
payable as in the Notes provided and all other sums due and payable under the
Note Agreements, at the place specified in and all in the manner and with the
effect provided in the Notes and the Note Agreements, as amended or modified
from time to time. Without limiting the foregoing, it is understood that
repeated and successive demands may be made and recoveries may be had hereunder
as and when, from time to time, the Company shall default under the terms of the
Notes or the Note Agreements and that notwithstanding recovery hereunder for or
in respect of any given Default or Defaults by the Company under the Notes or
the Note Agreements, this Guaranty shall remain in full force and effect and
shall apply to each and every subsequent Default.
-4-
<PAGE>
(c) Each of the Guarantors hereby waives to the fullest extent possible
under applicable law:
(i) any defense based upon the doctrine of marshalling of assets or
upon an election of remedies by the Noteholders, including, without
limitation, an election to proceed by non-judicial rather than judicial
foreclosure;
(ii) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal;
(iii) any duty on the part of any of the Noteholders to disclose to
the Guarantors any facts the Noteholders may now or hereafter know about
the Company regardless of whether any Noteholder has reason to believe that
any such facts materially increase the risk beyond that which each of the
Guarantors intends to assume or has reason to believe that such facts are
unknown to any of the Guarantors or has a reasonable opportunity to
communicate such facts to each of the Guarantors, since each of the
Guarantors acknowledges that it is fully responsible for being and keeping
informed of the financial condition of the Company and of all circumstances
bearing on the risk of non-payment of any Indebtedness hereby guaranteed;
(iv) any claim for reimbursement, contribution, exoneration,
indemnity or subrogation, or any other similar claim, which any such
Guarantor may have or obtain against the Company by reason of the existence
of this Guaranty, or by reason of the payment by any of the Guarantors of
any Indebtedness or the performance of this Guaranty;
(v) any other event or action (excluding any of the Guarantors'
compliance with the provisions hereof) that would result in the discharge
by operation of law or otherwise of any of the Guarantors from the
performance or observance of any obligation, covenant or agreement
contained in this Guaranty; and
(vi) notice of acceptance of this Guaranty by the Noteholders or of
the creation, renewal or accrual of any liability of the Company, present
or future, or of the reliance of such Noteholders upon this Guaranty (it
being understood that every indebtedness, liability and obligation
described in Section 2 hereof shall conclusively be presumed to have been
created, contracted or incurred in reliance upon the execution of this
Guaranty).
(d) Each of the Noteholders may deal with the Company and any security
held by them for the obligations of the Company (as aforesaid), in the same
manner and as freely as if this Guaranty did not exist and the Noteholders
without notice to any of the Guarantors, among other things, to grant to the
Company such extension or extensions of time to perform any act or acts as may
seem advisable to Noteholder at any time and from time to time, and to permit
the Company to incur additional indebtedness owed to the Noteholders, or any one
of them,
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<PAGE>
without terminating, affecting or impairing the validity or enforceability of
this Guaranty or the obligations of the Guarantors hereunder.
(e) Each Noteholder may proceed, either in its own name or in the name of
one or more of the Guarantors, or otherwise, to protect and enforce any or all
of its rights under this Guaranty by suit in equity, action at law or by other
appropriate proceedings, or to take any action authorized or permitted under
applicable law, and shall be entitled to require and enforce the performance of
all acts and things required to be performed hereunder by the Guarantors. Each
and every remedy of the Noteholders shall, to the extent permitted by law, be
cumulative and shall be in addition to any other remedy given hereunder or now
or hereafter existing at law or in equity.
(f) No waiver or release shall be deemed to have been made by any of the
Noteholders of any of its rights hereunder unless the same shall be in writing
and signed by all of the Noteholders and any such waiver shall be a waiver or
release only with respect to the specific matter involved and shall in no way
impair the rights of any of the Noteholders or the obligations of the Guarantors
under this Guaranty in any other respect at any other time.
(g) At the option of the Noteholders, each of the Guarantors may be
joined in any action or proceeding commenced by the Noteholders against the
Company or any of the other parties providing collateral for any indebtedness
covered by this Guaranty in connection with or based upon the Notes made by the
Company, the Note Agreements or other Indebtedness, or any provision thereof,
and recovery may be had against each of the Guarantors in such action or
proceeding or in any independent action or proceeding against each of the
Guarantors, without any requirement that the Noteholders first assert, prosecute
or exhaust any remedy or claim against the Company and/or any other party
providing collateral for any Indebtedness covered by this Guaranty.
(h) As a separate, additional and continuing obligation, each of the
Guarantors unconditionally and irrevocably undertakes and agrees with the
Noteholders that, should the amounts referred to in Section 2 of this Guaranty
not be recoverable from such Guarantor in its capacity as a guarantor under this
Guaranty for any reason whatsoever (including, without limitation, by reason of
any provision of the Notes or the Note Agreements, being or becoming void,
unenforceable, or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by the Noteholders or any of them at any
time, such Guarantor as sole, original and independent obligor, upon demand by
the Noteholders, will make payment to the Noteholders of all such amounts, by
way of a full indemnity.
(i) Subject to the limitations on the rights of a Noteholder to transfer
or assign the Notes, as more particularly described in the Note Agreements, all
rights of any Noteholder may be transferred or assigned at any time and shall be
considered to be transferred or assigned at any time or from time to time upon
the transfer of such Note in accordance with the terms of the Note Agreements
whether with or without the consent of or notice to the Guarantors under this
Guaranty or to the Company.
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<PAGE>
(j) To the extent of any payments made under this Guaranty, each of the
Guarantors shall be subrogated to the rights of the holder of the Notes
receiving such payments, but each of the Guarantors covenants and agrees that
such right of subrogation shall be subordinate in right of payment to the rights
of any Noteholders for which full payment has not been made or provided for and,
to that end, each of the Guarantors agrees not to claim or enforce any such
right of subrogation or any right of setoff or any other right which may arise
on account of any payment made by such Guarantor in accordance with the
provisions of this Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of any Noteholder or Noteholders
against the Company, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law, including, without limitation, the
right to take or receive from the Company, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right unless and until 366 days after all of
the Notes owned by Persons other than the Guarantors and all other sums due or
payable under the Note Agreements have been fully paid and discharged or payment
therefor has been provided. If any amount shall be paid to a Guarantor in
violation of the preceding sentence at any time prior to the later of the
indefeasible cash payment in full of the Notes and all other amounts payable
under the Note Agreements and this Guaranty, such amounts shall be held in trust
for the benefit of the Noteholders and shall forthwith be paid to the
Noteholders to be credited and applied to the amounts due or to become due with
respect to the Notes and all other amounts payable under the Note Agreements and
this Guaranty, whether matured or unmatured. Each of the Guarantors
acknowledges that it has received direct and indirect benefits from the
financing arrangements contemplated by the Note Agreements and that the waiver
set forth in this subsection is knowingly made as a result of the receipt of
such benefits.
(k) Each of the Guarantors agrees that to the extent the Company, or any
other Person makes any payment on any Note, which payment or any part thereof is
subsequently invalidated, voided, declared to be fraudulent or preferential, set
aside, recovered, rescinded or is required to be retained by or repaid to a
trustee, receiver, or any other Person under any bankruptcy code, common law, or
equitable cause, then and to the extent of such payment, the obligation or the
part thereof intended to be satisfied shall be revived and continued in full
force and effect with respect to such Guarantor's obligations hereunder, as if
said payment had not been made. The liability of such Guarantor hereunder shall
not be reduced or discharged, in whole or in part, by any payment to any
Noteholder from any source that is thereafter paid, returned or refunded in
whole or in part by reason of the assertion of a claim of any kind relating
thereto, including, but not limited to, any claim for breach of contract, breach
of warranty, preference, illegality, invalidity, or fraud asserted by any
account debtor or by any other Person.
(l) The obligations of each of the Guarantors under this Guaranty rank
pari passu in right of payment with all other indebtedness for borrowed money
(actual or contingent) of the respective Guarantor which is not secured or the
subject of any statutory trust or preference or which is not expressly
subordinated in right of payment to any other indebtedness for borrowed money.
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<PAGE>
Section 4. Benefit of the Notes.
Each of the Guarantors is a Subsidiary of the Company. The Company has
requested that the Noteholders purchase the Notes for the purpose of providing
the Company the financing necessary to refinance certain indebtedness incurred
in connection with the acquisition of certain entities. Each of the Company and
the Guarantors will derive substantial benefit, directly or indirectly, from the
purchase of the Notes by the Purchasers and the acquisition of the entities by
the Company.
Section 5. Representations, Warranties and Covenants.
Each Guarantor hereby acknowledges and agrees that it has received a copy
of the Note Agreements, the Notes and all Collateral Documents and hereby
(i) agrees that the representations and warranties contained in Exhibit B of the
Note Agreements are incorporated herein by reference and are hereby made by each
Guarantor to the extent such representations and warranties are applicable to
each such Guarantor, (ii) agrees to comply with all covenants and agreements
contained in the Note Agreements to the extent applicable to it and as the same
may be amended or modified from time to time in accordance with the terms
thereof and (iii) makes the following further representations, warranties and
agreements:
(a) Legal and Authorized. The compliance by such Guarantor with all
of the provisions of this Guaranty--
(i) is within the corporate powers of such Guarantor;
(ii) will not violate any provisions of any law or any order
of any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the charter documents or
By-laws of such Guarantor or any indenture or other agreement or
instrument to which such Guarantor is a party or by which it may be
bound or result in the imposition of any Liens or encumbrances on any
property of such Guarantor except the Liens created by the Collateral
Documents; and
(iii) has been duly authorized by proper corporate action on
the part of such Guarantor and its stockholders, executed and
delivered by such Guarantor and this Guaranty constitutes the legal,
valid and binding obligation, contract and agreement of such Guarantor
enforceable in accordance with its terms.
(b) Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by such Guarantor
of this Guaranty or compliance by such Guarantor with any of the provisions
of this Guaranty.
(c) Solvency. Such Guarantor is solvent, has in the reasonable
opinion of such Guarantor capital not unreasonably small in relation to its
business or any contemplated or undertaken transaction and has assets
having a value both at fair valuation and at present
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<PAGE>
fair salable value greater than the amount required to pay its debts as
they become due and greater than the amount that will be required to pay
its probable liability on its existing debts as they become absolute and
matured. Such Guarantor does not intend to incur, nor does it believe that
it will incur, debts beyond its ability to pay such debts as they become
due. Such Guarantor will not be rendered insolvent by the execution and
delivery of, and performance of its obligations under, this Guaranty. Such
Guarantor does not intend to hinder, delay or defraud its creditors by or
through the execution and delivery of, or performance of its obligations
under, this Guaranty.
Section 6. Collateral for Guaranty.
The obligations of the Guarantors under this Guaranty shall be secured by
the Collateral Documents executed and delivered to the Collateral Agent together
with such other documents as required to be executed and delivered by one or
more of the Guarantors concurrently with or subsequent to the date hereof, all
pursuant to the terms and conditions of the Note Agreements and Intercreditor
Agreement.
Section 7. Miscellaneous.
SECTION 7.1. GOVERNING LAW. THIS GUARANTY HAS BEEN DELIVERED IN
MICHIGAN AND SHALL BE INTERPRETED, AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL
BE DETERMINED UNDER THE LAWS OF, AND BE ENFORCEABLE IN, THE STATE OF NEW YORK.
Section 7.2. Severability. If any term or provision of this Guaranty
or the application thereof to any circumstance shall, to any extent, be invalid
or unenforceable, the remainder of this Guaranty, or the application of such
term or provision to circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Guaranty shall be valid and enforceable to the fullest extent
permitted by law.
Section 7.3. Notice. All notices and other communications to be made
or given pursuant to this Guaranty shall be sufficient if made or given in
writing and shall be given by personal delivery, by mail, by reputable overnight
courier, by telex or by facsimile and addressed or delivered to it at its
address set forth on the signature pages hereof or at such other address as may
be designated by such party in a notice to the other party that complies as to
deliver with the terms of this Section 7.3. Any notice, if personally delivered
or if mailed and properly addressed with postage prepaid and sent by registered
or certified mail, shall be deemed given when received or when delivery is
refused; any notice, if given to a reputable overnight courier and properly
addressed, shall be deemed given two (2) Business Days after the date on which
it was sent, unless it is actually received sooner by the named addressee; and
any notice, if transmitted by telex or facsimile, shall be deemed given when
received (answerback confirmed in the case of telexes and receipt confirmed in
the case of telecopies).
Section 7.4. Right to Cure. Each of the Guarantors shall have the
right to cure any Event of Default under the Note Agreements with respect to
obligations of the Company thereunder; provided that such cure is effected
within the applicable grace period or period for
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<PAGE>
cure, if any; and provided further that such cure can be effected in compliance
with the Note Agreements. Except to the extent of payments of principal,
interest and/or other sums actually received by the Noteholders pursuant to such
cure, the exercise of such right to cure by any of the Guarantors shall not
reduce or otherwise affect the liability of such guarantor or any of the other
Guarantors under this Guaranty.
Section 7.5. Consent to Jurisdiction. Each of the Guarantors and
Noteholders hereby irrevocably submit to the non-exclusive jurisdiction of any
United States Federal or New York state court sitting in the Southern District
of New York in any action or proceeding arising out of or relating to this
Guaranty and each of the Guarantors and Noteholders hereby irrevocably agree
that all claims in respect of such action or proceeding may be heard and
determined in any such United States Federal or New York state court. Each of
the Guarantors irrevocably consents to the service of any and all process in any
such action or proceeding brought in any court in or of the State of New York by
the delivery of copies of such process to each Guarantor at its address
specified on the signature page hereto or by certified mail directed to such
address or such other address as may be designated by Guarantor in a notice to
the other parties that complies as to delivery with the terms of Section 7.3.
Nothing in this Section shall affect the right of the Noteholder to serve
process in any other manner permitted by law or limit the right of the
Noteholders to bring any such action or proceeding against any of the Guarantors
or any of its property in the courts of any other jurisdiction. Each of the
Guarantors hereby irrevocably waives any objection to the laying of venue of any
such suit or proceeding in the above described courts.
Section 7.6. Amendments. The terms of this Guaranty may not be
waived, altered, modified, amended, supplemented or terminated in any manner
whatsoever except as provided herein and in accordance with the Note Agreements.
In accordance with Section 5.16 of the Note Agreements, all Subsidiaries of the
Company acquired after the date hereof shall become obligated as Guarantors
hereunder (each as fully as though an original signatory hereto) by executing
and delivering to the Noteholders that certain joinder agreement in the form
attached to this Guaranty as Exhibit "A".
Section 7.7. Release. Upon payment in full in cash of the
Indebtedness or the satisfaction by Guarantors of their obligations hereunder
and under any Security Agreement executed by any of the Guarantors pursuant to
the Note Agreements and the Notes, or as otherwise contemplated by the terms of
the Note Agreements, and when Guarantors are no longer subject to any obligation
hereunder or thereunder, the Noteholders shall deliver to each of the
Guarantors, upon written request therefor, (i) a written release of this
Guaranty and (ii) appropriate discharges of any Collateral provided by such
Guarantor for this Guaranty; provided, however, that the effectiveness of this
Guaranty and such Collateral shall continue or be reinstated, as the case may
be, in the event: (x) that any payment received or credit given by the
Noteholders, or any of them, is returned, disgorged, rescinded or required to be
recontributed to any Person as an avoidable preference, impermissible setoff,
fraudulent conveyance, restoration of capital or otherwise under any applicable
state, federal or national law of any jurisdiction, including without limitation
laws pertaining to bankruptcy or insolvency, and this Guaranty shall thereafter
be enforceable against each of the Guarantors as if such returned, disgorged,
recontributed or rescinded payment or credit had not been received or
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<PAGE>
given by the Noteholders, and whether or not any Noteholder relied upon such
payment or credit or changed its position as a consequence thereof or (y) that
any liability is imposed, or sought to be imposed against the Noteholders or any
of them, relating to the environmental condition of any of property mortgaged or
pledged to the Noteholders by any of the Guarantors, the Company, or any other
party as collateral (in whole or part) for any indebtedness or obligation
evidenced or secured by this Guaranty, whether such condition, claim or matter
is known or unknown, now exists or subsequently arises (excluding only
conditions which arise from and after acquisition by any Noteholder of any such
property, in lieu of foreclosure or otherwise and not caused by Company, any of
its Subsidiaries or any of their agents, employees or representatives) in which
event this Guaranty shall thereafter be enforceable against each of the
Guarantors to the extent of all liabilities, and all reasonable costs and
expenses (including reasonable attorneys fees) incurred by the Noteholders as
the direct or indirect result of any such environmental condition. For purposes
of this Guaranty "environmental condition" includes, without limitation,
conditions existing with respect to the surface or ground water, drinking water
supply, land surface or subsurface strata and the ambient air.
Section 7.8. Joint and Several Obligation, etc. The obligation of
each of the Guarantors under this Guaranty shall be several and also joint, each
with all and also each with any one or more of the others, and may be enforced
against each severally, any two or more jointly, or some severally and some
jointly. Any one or more of the Guarantors may be released from its obligations
hereunder with or without consideration for such release and the obligations of
the other Guarantors hereunder shall be in no way affected thereby. the
Noteholder, may fail or elect not to prove a claim against any bankrupt or
insolvent Guarantor and thereafter, the Noteholder may, without notice to any
Guarantors, extend or renew any part or all of any indebtedness of any of the
Guarantors, and may permit any of the Guarantors to incur additional
indebtedness, without affecting in any manner the unconditional obligation of
the remaining Guarantors. Such action shall not affect any right of
contribution among the Guarantors.
Section 7.9. Waiver of Jury Trial. Each Noteholder and each of the
Guarantors after consulting or having had the opportunity to consult with
counsel, knowingly, voluntarily and intentionally waive any right any of them
may have to a trial by jury in any litigation based upon or arising out of this
guaranty or any related instrument or agreement or any of the transactions
contemplated by this guaranty or any course of conduct, dealing, statements
(whether oral or written) or action of any of them. Neither the Agent nor any
of the Guarantors shall seek to consolidate, by counterclaim or otherwise, any
such action in which a jury trial has been waived with any other action in which
a jury trial cannot be or has not been waived. These provisions shall not be
deemed to have been modified in any respect or relinquished by the Agent or any
of the Guarantors except by a written instrument executed by all of them.
Section 7.10. Special Provisions. The maximum aggregate principal
liability of the Guarantors under this Guaranty shall be the lesser of (a) a
maximum aggregate amount as will, after giving effect to such maximum aggregate
amount and all other liabilities of the Guarantors, contingent or otherwise,
result in the obligations of the Guarantors hereunder not constituting a
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fraudulent transfer, obligation or conveyance and (b) $200,000,000. The date on
which this Guaranty terminates shall be December 31, 2025.
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In Witness Whereof, each of the undersigned Guarantors has executed this
Guaranty as of the date set forth above.
Guarantors:
R.J. Tower Corporation, an Indiana
corporation
Witnesses:
_______________________________ By:______________________________________
Its:
Edgewood Manufacturing Corp., a
Delaware corporation
_______________________________ By:______________________________________
Its:
R.J. Tower Corporation, a Kentucky
corporation
_______________________________ By:______________________________________
Its:
Kalamazoo Stamping and Die Company,
a Michigan corporation
_______________________________ By:______________________________________
Its:
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Trylon Corporation
_______________________________ By:______________________________________
Its:
Guarantors' Address:
c/o Tower Automotive, Inc.
4508 IDS Center
Minneapolis, MN 55402
Attention: Robert R. Hibbs
Scott Rued
Acknowledged By:
R.J. Tower Corporation
By_____________________________
Its
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JOINDER AGREEMENT
This Joinder Agreement is dated as of __________, 199_ by _______________,
a _______________________ corporation ("New Guarantor").
Whereas, pursuant to Section 5.16 of those certain Note Agreements, each
dated as of May 31, 1996 (the "Note Agreements"), between the Company and the
purchasers named on Schedule I attached to said Note Agreements (the
"Purchasers") and Section 7.6 of that certain Subsidiaries Guaranty dated as of
May 31, 1996 (the "Guaranty") executed and delivered by the Guarantors named
therein ("Guarantors") in favor of the Noteholders the New Guarantor must
execute and deliver a joinder agreement in accordance with the Note Agreements
and the Guaranty.
Now therefore, as a further requirement of the Note Agreements, New
Guarantor hereby covenants and agrees as follows:
1. All capitalized terms used herein shall have the meanings
assigned to them in the Note Agreements unless expressly defined to the
contrary.
2. New Guarantor hereby enters into this Joinder Agreement in order
to comply with Section 5.16 of the Note Agreements and Section 7.6 of the
Guaranty and does so in consideration of purchase of the Notes under the
Note Agreements, from which New Guarantor shall derive direct and indirect
benefit as with the other Guarantors (all as set forth and on the same
basis as in the Guaranty).
3. New Guarantor shall be considered, and deemed to be, for all
purposes of the Note Agreements, the Guaranty and the other Collateral
Documents, a Guarantor under the Guaranty as fully as though New Guarantor
had executed and delivered the Guaranty at the time originally executed and
delivered under the Note Agreements and hereby ratifies and confirms its
obligations under the Guaranty, all in accordance with the terms thereof.
4. No Default or Event of Default (each such term being defined in
the Note Agreements) has occurred and is continuing under the Note
Agreements.
5. This Joinder Agreement shall be governed by the laws of the State
of New York and shall be binding upon New Guarantor and its successors and
assigns.
Exhibit A
(to Guaranty Agreement)
<PAGE>
In witness whereof, the undersigned New Guarantor has executed and
delivered this Joinder Agreement as of _______________, 199__.
[New Guarantor]
By_______________________________________
Its____________________________________
A-2
<PAGE>
Exhibit 4.17
REGISTRATION RIGHTS AND VOTING AGREEMENT
REGISTRATION RIGHTS AND VOTING AGREEMENT dated as of May 31, 1996 between
Tower Automotive, Inc., a Delaware corporation (the "COMPANY"), and MascoTech,
Inc., a Delaware corporation ("MASCOTECH").
WHEREAS, the parties to this Agreement are parties to a stock purchase
agreement dated as of the date hereof (THE "PURCHASE AGREEMENT") pursuant to
which the Company has agreed to issue certain shares of its Common Stock, par
value $.01 per share (the "COMMON STOCK"), and certain warrants to purchase
Common Stock;
WHEREAS, the execution and delivery of this Agreement is a condition to the
closing under the Purchase Agreement; and
WHEREAS, the Company currently contemplates the public offering of
approximately 2,000,000 shares of its Common Stock in conjunction with the
public resale by certain of the Company's shareholders of approximately
2,500,000 shares of Common Stock (the "CURRENT OFFERING").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. The following terms, as used herein, have the following
meanings:
"1933 ACT" means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
"1934 ACT" means the Securities Exchange Act of 1934, as amended and the
rules and regulations thereunder.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in Detroit, Michigan are authorized by law to close.
"COMMISSION" means the Securities and Exchange Commission.
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"COMMON STOCK" shall have the meaning assigned to such term in the first
recital hereto.
"CURRENT OFFERING" shall have the meaning assigned such term in the third
recital hereto.
"EXERCISE PERIOD" shall have the meaning assigned such term in Section 1A
of the Stock Purchase Warrants.
"MASCOTECH SHARES" means all shares of Common Stock owned by MascoTech from
time to time that are "restricted securities" within the meaning of Rule 144
under the 1933 Act.
"ONEX" means Onex U.S. Investments, Inc., an Ontario corporation.
"ORGANIC CHANGE" shall have the meaning assigned such term in Section 2B of
the Stock Purchase Warrants.
"PERSON" means an individual, a corporation, a partnership, limited
liability company, an association, a trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"PIGGYBACK REGISTRATION" means a Piggyback Registration as defined in
Section 2.2.
"PURCHASE AGREEMENT" shall have the meaning assigned such term in the first
recital hereto.
"REGISTRABLE SECURITIES" means (i) any Common Stock issued or issuable
pursuant to the Purchase Agreement, (ii) any Common Stock or other securities
issued or issuable with respect to the Common Stock referred to in clause (i)
and (iii) the Warrant Shares. A Registrable Security will cease to be a
Registrable Security when it has been sold in an offering registered under the
1933 Act or pursuant to Rule 144 (or any successor rule) adopted thereunder.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as
defined in Section 2.1.
"STOCK PURCHASE WARRANTS" means the warrant certificates evidencing the
Warrants.
"UNDERWRITER" means a securities dealer who purchases any Registrable
Securities as principal and not as part of such dealer's market-making
activities.
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"WARRANTS" means the stock purchase warrants issued pursuant to the
Purchase Agreement and any warrants issued in exchange for, in substitution of
or on transfer of such warrants.
"WARRANT SHARES" means the shares of Common Stock or other securities
issued or issuable upon exercise of the Warrants.
ARTICLE II
REGISTRATION RIGHTS
2.1 Participation in Current Offering. The Company shall file a
registration statement relating to the Current Offering prior to or promptly
following the closing under the Purchase Agreement and shall include in such
offering, if MascoTech so requests (such request to be given on or prior to the
date hereof), not less than 50% of the Registrable Securities. If MascoTech
requests the inclusion in such offering of more than 50% of the Registrable
Securities, the excess of the number of Registrable Securities requested to be
included over 50% shall be subject to reduction pursuant to Section 2.4. Any
Registrable Securities included in the Current Offering will be offered on the
same terms and conditions as the other shares of Common Stock included in such
offering.
2.2. Shelf Registration. (a) As soon as practicable following the date
hereof, the Company shall prepare and file with the Commission a shelf
registration statement (as amended and supplemented from time to time, the
"SHELF REGISTRATION STATEMENT") relating to the Registrable Securities in
accordance with Rule 415 under the 1933 Act (or any similar rule that may be
adopted by the Commission) and will use its best efforts to cause such Shelf
Registration Statement to be declared effective no later than the later of: (i)
90 calendar days following the date hereof and (ii) 120 calendar days following
the closing date of the Current Offering, and to keep such Shelf Registration
Statement continuously effective and in compliance with the 1933 Act and usable
for resale or other disposition of such Registrable Securities subject to
Sections 2.2(c), 2.2(d) and 3.1(d) below, for the period commencing on the date
on which the Commission declares such Shelf Registration Statement effective and
ending on the earlier of (x) the expiration of the first 180 calendar-day period
following the expiration of the Exercise Period relating to the Warrants during
which there is no Delay Period and (y) the first date on which there are no
Registrable Securities.
(b) If MascoTech so elects, such offering may be in the form of an
underwritten offering. MascoTech shall select the managing Underwriters and any
additional investment bankers and managers to be used in connection with such
offering, provided that such managing Underwriters and additional investment
bankers must be reasonably satisfactory to the Company.
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(c) MascoTech shall only be permitted to make sales of Registrable
Securities under the Shelf Registration Statement during the thirty (30)
business days beginning on the second business day following the date on which
the Company publicly announces its quarterly or annual earnings (the "Selling
Periods"); provided that MascoTech may, during such period of time which is not
a Selling Period, make sales of Registrable Securities under Shelf Registration
Statement, upon receiving the written consent of the Company (such consent not
to be unreasonably withheld).
(d) The Company shall have the right to refuse use of the Shelf
Registration Statement (a "Delay Period") for a reasonable length of time (but
in any case not to exceed 90 days) and from time to time, if the Company's board
of directors or senior management determine, with respect to the advisability
(as determined in good faith) of deferring public disclosure of material
corporate developments or other information, that use of the Shelf Registration
Statement and the disclosure required to be made therein would not be in the
best interests of the Company at such time; provided that there shall not be
more than one Delay Period in any calendar year. The Company shall use its
reasonable efforts to minimize the length of any Delay Period. The Company
shall provide written notice to MascoTech of the beginning and end of each Delay
Period.
2.3. Piggyback Registration. If the Company proposes to file a
registration statement under the 1933 Act with respect to an offering of Common
Stock (i) for the Company's own account (other than a registration statement on
Form S-4 or S-8 (or any substitute form that may be adopted by the Commission))
or (ii) for the account of any of its holders of Common Stock, then the Company
shall give written notice of such proposed filing to MascoTech as soon as
practicable (but in no event less than 10 calendar days before the anticipated
filing date), and such notice shall offer MascoTech the opportunity to register
such number of Registrable Securities as MascoTech may request on the same terms
and conditions as the Company's or such holder's Common Stock (a "PIGGYBACK
REGISTRATION").
2.4. Reduction of Offering. Notwithstanding anything contained herein, if
the managing Underwriter of an offering described in Section 2.3 delivers a
written opinion to the Company that the size of the offering that MascoTech, the
Company and any other Persons intend to make is such that the success of the
offering would be materially and adversely affected, then the amount of
Registrable Securities to be offered for the account of MascoTech shall be
reduced to the extent necessary to reduce the total amount of securities to be
included in such offering to the amount recommended by such managing
Underwriter; provided that if securities are being offered for the account of
Persons other than the Company and MascoTech, then the proportion by which the
amount of such Registrable Securities intended to be offered for the account of
MascoTech is reduced shall not exceed the proportion by which the amount of such
securities intended to be offered for the account of such other Persons is
reduced.
2.5. Third Party Registration Rights. Prior to the consummation of any
Organic Change, the Company shall make appropriate provision to insure that, so
long as
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this Agreement is in effect, MascoTech and each Person to whom the registration
rights granted hereby have been or may be assigned pursuant to the terms hereof
is granted registration rights equivalent to those granted hereby with respect
to all securities of any Person other than the Company that: (i) as a result of
the operation of Section 2B of the Stock Purchase Warrants, may be issued or
issuable upon exercise of the Warrants or (ii) as a result of such Organic
Change may be acquired or acquirable with respect to or in exchange for
Registrable Securities of the Company.
ARTICLE III
REGISTRATION PROCEDURES
3.1. Filings; Information. Whenever MascoTech requests that any
Registrable Securities be registered pursuant to Sections 2.1 or 2.3 or with
respect to the Shelf Registration Statement, the Company will use its best
efforts to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of disposition thereof as quickly as
practicable and in connection with any such request and the Shelf Registration
Statement, the Company and MascoTech agree as follows:
(a) The Company will, prior to filing a registration statement or
prospectus or any amendment or supplement thereto, furnish to MascoTech and
each applicable managing Underwriter, if any, without charge, copies
thereof, and thereafter furnish to MascoTech and each such Underwriter, if
any, without charge, such number of copies of such registration statement,
each amendment and supplement thereto (in each case including all exhibits
thereto and documents incorporated by reference therein) and the prospectus
included in such registration statement (including each preliminary
prospectus) and such other documents as MascoTech or each such Underwriter
may reasonably request in order to facilitate the disposition of the
Registrable Securities.
(b) After the filing of the registration statement, the Company will
promptly notify MascoTech of any stop order issued or, to the knowledge of
the Company, threatened to be issued by the Commission and take all
reasonable actions required to prevent the entry of such stop order or to
remove it if entered at the earliest possible date.
(c) The Company will use its best efforts in cooperation with
MascoTech and the Underwriters or agents, as the case may be, to (i)
register or qualify the Registrable Securities for offer and sale under
such other securities or blue sky laws of such jurisdictions in the United
States as MascoTech reasonably requests and (ii) cause such Registrable
Securities to be registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may
be reasonably necessary or advisable to enable MascoTech to consummate the
disposition of Registrable Securities; provided that the Company
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will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this paragraph (c), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction.
(d) The Company will immediately notify MascoTech, at any time when
a prospectus relating to the sale of the Registrable Securities is required
by law to be delivered in connection with sales by an Underwriter or
dealer, of the occurrence of any event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and shall promptly make available to MascoTech and to
the Underwriters any such supplement or amendment. MascoTech agrees that,
upon receipt of any notice from the Company of the occurrence of any event
of the kind described in the preceding sentence, MascoTech will forthwith
discontinue the offer and sale of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until receipt
by MascoTech and the Underwriters of the copies of such supplemented or
amended prospectus and, if so directed by the Company, MascoTech will
deliver to the Company all copies, other than permanent file copies then in
MascoTech's possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice.
(e) The Company will make available for inspection by MascoTech, any
Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained by
MascoTech or any such Underwriter (collectively, the "INSPECTORS"), all
financial and other pertinent records, pertinent corporate documents and
properties of the Company (collectively, the "RECORDS") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees
to supply all information reasonably requested by any Inspectors in
connection with such registration statement. Records which the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless
(i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in such registration statement or (ii) the release
of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction. MascoTech agrees that information obtained
by it as a result of such inspections shall be deemed confidential and
shall not be used by it for any purpose other than as described in this
paragraph (e) unless and until such information is made generally available
to the public. MascoTech further agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company, at its
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expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential.
(f) The Company will comply with the 1933 Act and the rules and
regulations of the Commission thereunder and the 1934 Act and the rules and
regulations of the Commission thereunder so as to permit the completion of
the distribution of the Registrable Securities pursuant to the registration
statement in accordance with the intended method or methods of distribution
contemplated in the prospectus relating thereto.
(g) Upon the request of MascoTech or the managing Underwriter or
agent, as the case may be, or if required by the rules, regulations or
instructions applicable to the registration form used by the Company, or by
the 1933 Act or by any other rules and regulations thereunder in connection
with the offering of Registrable Securities, the Company will prepare a
prospectus supplement that complies with the 1933 Act and the rules and
regulations of the Commission thereunder and that sets forth the aggregate
amount of the Registrable Securities being sold, the name or names of any
Underwriters or agents participating in the offering, the price at which
the Registrable Securities are to be sold, any discounts, commissions or
other items constituting compensation, and such other information as
MascoTech or the managing Underwriter or agent, as the case may be, and the
Company deem appropriate in connection with the offering of the Registrable
Securities prior to its being used or filed with the Commission.
(h) Upon the request of the Company, MascoTech will promptly furnish
in writing to the Company such information regarding the distribution of
the Registrable Securities as may be legally required in connection with
such registration as may be reasonably requested by the Company.
(i) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as
are reasonably required in order to expedite or facilitate the disposition
of such Registrable Securities.
(j) The Company will furnish to MascoTech and to each Underwriter a
signed counterpart, addressed to MascoTech or such Underwriter, of (i) an
opinion or opinions of counsel to the Company and (ii) a comfort letter or
comfort letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as MascoTech or the
managing Underwriter reasonably requests.
(k) The Company will make generally available to its security
holders, as soon as reasonably practicable, an earnings statement covering
a period of 12 months, beginning within three months after the effective
date of the registration
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statement used to sell any Registrable Securities, which earnings statement
shall satisfy the provisions of Section 11(a) of the 1933 Act and the rules
and regulations of the Commission thereunder.
(l) The Company will use its best efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed.
(m) MascoTech agrees to give the Company written notice of its
intent to sell any Registrable Securities under the Shelf Registration
Statement at least three business days prior to such sale. MascoTech agrees
to complete and execute all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of any underwritten offering in which MascoTech proposes to
participate.
3.2. Registration Expenses. In connection with the Shelf Registration
Statement and in connection with any Piggyback Registration (including the
Current Offering), the Company shall pay the following expenses incurred in
connection with such registration: (i) all registration and filing fees, (ii)
fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) printing expenses, (iv)
fees and expenses incurred in connection with the listing of the Registrable
Securities, (v) fees and expenses of counsel and independent certified public
accountants for the Company and (vi) the reasonable fees and expenses of any
additional experts retained by the Company in connection with such registration.
MascoTech shall pay any underwriting fees, discounts or commissions and transfer
taxes attributable to the sale of Registrable Securities and any out-of-pocket
expenses of MascoTech.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1. Indemnification by the Company. The Company agrees to indemnify and
hold harmless MascoTech, its officers and directors, and each Person, if any,
who controls MascoTech within the meaning of either Section 15 of the 1933
Act or Section 20 of the 1934 Act from and against any and all losses, claims,
damages and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Securities (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to
MascoTech or the plan of distribution furnished in writing to the Company by or
on behalf of MascoTech expressly
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for use therein; provided that the foregoing indemnity agreement with respect to
any (i) preliminary prospectus shall not inure to the benefit of MascoTech if a
copy of the most current prospectus at the time of the delivery of the
Registrable Securities was not provided to the purchaser and such current
prospectus would have cured the defect giving rise to such loss, claim, damage
or liability and was in fact previously furnished to the MascoTech and the
managing Underwriters, if any, and (ii) prospectus shall not inure to the
benefit of MascoTech if such untrue statement or alleged untrue statement,
omission or alleged omission is corrected in an amendment or supplement to the
prospectus and if having previously been furnished by or on behalf of the
Company with copies of the prospectus as so amended or supplemented, MascoTech
thereafter fails to deliver such prospectus as so amended or supplemented at
least one business day prior to the sale of Registrable Securities to the person
asserting such loss, claim, damage or liability who purchases such Registrable
Securities which are the subject thereof. The Company also agrees to indemnify
any Underwriters of the Registrable Securities, their officers and directors and
each person who controls such Underwriters on substantially the same basis as
that of the indemnification of MascoTech provided in this Section 4.1.
4.2. Indemnification by MascoTech. MascoTech agrees to indemnify and hold
harmless the Company, its officers and directors, and each Person, if any, who
controls the Company within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the same extent as the foregoing indemnity from
the Company to MascoTech, but only with reference to information relating to
MascoTech or the plan of distribution furnished in writing by or on behalf of
MascoTech expressly for use in any registration statement or prospectus relating
to the Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus. MascoTech also agrees to indemnify and hold harmless
any Underwriters of the Registrable Securities, their officers and directors and
each person who controls such Underwriters on substantially the same basis as
that of the indemnification of the Company provided in this Section 4.2.
4.3. Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to Section 4.1 or
Section 4.2, such Person (the "INDEMNIFIED PARTY") shall promptly notify the
Person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the Indemnifying Party, upon the request of the Indemnified Party,
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party and shall assume the payment of all fees
and expenses. In any such proceeding, any Indemnified Party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the Indemnified Party and the Indemnifying Party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Party shall not, in
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connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) at any time for all such Indemnified Parties,
and that all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the Indemnified Parties, such firm shall
be designated in writing by the Indemnified Parties. The Indemnifying Party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Parties from and against any loss or liability (to the
extent stated above) by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability arising out
of such proceeding.
4.4. Contribution. To the extent the indemnification provided for in this
Article IV is unavailable to an Indemnified Party in respect of any losses,
claims, damages or liabilities referred to herein, then in lieu of such
indemnification (i) as between the Company and any other selling shareholders,
on the one hand, and MascoTech, on the other hand, the Company, such other
selling shareholders and MascoTech shall contribute to such aggregate losses,
liabilities, claims, damages and expenses in such proportion as is appropriate
to reflect the relative benefits received by the Company and any such selling
shareholders on the one hand and MascoTech on the other from the offering of the
Securities, or if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits but also
the relative fault of the Company and any such selling shareholders, on the one
hand, and of MascoTech, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations and (ii) as
between the Company, any other selling shareholders and MascoTech, on the one
hand, and the Underwriters or agents, on the other hand, the Company, such
selling shareholders, MascoTech and such Underwriters or agents shall contribute
to such aggregate losses, liabilities, claims, damages and expenses in such
proportion as is appropriate to reflect not only the relative benefits but also
the relative fault of the Company, any such selling shareholders and MascoTech,
on the one hand, and the Underwriters or agents, on the other hand, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company, such selling shareholders
and MascoTech and the Underwriters or agents shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Company, such selling shareholders and MascoTech bear to the total underwriting
discounts and commissions received by the Underwriters or agents, in each case
as set forth in the prospectus. The relative fault of
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the Company, any other selling shareholders, MascoTech and the Underwriters or
agents shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, such selling shareholders, MascoTech or such Underwriters or agents and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and MascoTech agree that it would not be just and equitable if
contribution pursuant to this Section 4.4 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,
damages or liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Article IV, MascoTech shall not be required to contribute any
amount in excess of the amount by which the net proceeds of the offering (before
deducting expenses) received by MascoTech exceeds the amount of any damages
which MascoTech has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.
ARTICLE V
VOTING OF THE MASCOTECH SHARES
5.1 Voting of the MascoTech Shares. (a) MascoTech shall vote the
MascoTech Shares in the same manner as the Common Stock held by Onex is voted,
on the election of directors and on all other matters which are submitted to a
vote (or consent in lieu of voting) of the Company's stockholders, and for this
purpose, shall execute and deliver to Onex (or its designees) proxies to vote
the MascoTech Shares in the same manner as the Common Stock held by Onex is
voted. Without limiting the generality of the foregoing, to the extent
permitted by law, MascoTech, by its execution of this Agreement, irrevocably
constitutes and appoints Onex or its designee MascoTech's proxy to vote all of
the MascoTech Shares at any meeting of stockholders of the Company or to give
consent in lieu of voting on any matter which is submitted for a vote or consent
to the stockholders, provided that the MascoTech Shares are voted or consent is
given with respect to such shares in the same manner as with respect to the
Common Stock held by Onex. Notwithstanding anything to the contrary contained
in this Article V, the MascoTech Shares shall not, except with the express
consent of MascoTech be voted in favor of any resolution the effect of which
will be to change the MascoTech Shares or the Common Stock held by Onex or
convert or exchange the MascoTech Shares or the Common Stock held by Onex into
or for different securities unless in every such case the
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MascoTech Shares and the Common Stock held by Onex are thereby changed
identically or converted into or exchanged for the same type of securities in
proportion to their respective holdings of Common Stock in each case on terms
consistent with the rights and preferences set forth in the Company's
Certificate of Incorporation, as is reasonably determined by Onex.
(b) The voting agreement set forth in this Article V shall continue with
respect to each MascoTech Share until the earlier of: (i) the date on which
MascoTech or any affiliate of MascoTech no longer owns such MascoTech Share,
(ii) the date on which such MascoTech Share ceases to be a "restricted security"
within the meaning of Rule 144 under the 1933 Act, or (iii) the tenth
anniversary of the date of this Agreement.
ARTICLE VI
MISCELLANEOUS
6.1. Rule 144. The Company covenants that it will file any reports
required to be filed by it under the 1933 Act and the 1934 Act and that it will
take such further action as MascoTech may reasonably request to the extent
required from time to time to enable MascoTech to sell Registrable Securities
without registration under the 1933 Act within the limitation of the exemptions
provided by Rule 144 under the 1933 Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission.
Upon the request of MascoTech, the Company will deliver to MascoTech a written
statement as to whether it has complied with such reporting requirements.
6.2. Transfer of Registration Rights. None of the rights of MascoTech
under this Agreement shall be assignable by MascoTech without the prior written
consent of the Company.
6.3. Notices. All notices, requests and other communications to either
party hereunder shall be in writing (including telecopy or similar writing) and
shall be given,
If to the Company, to:
Tower Automotive, Inc.
6303 28th Street, S.E.
Grand Rapids, MI 49546
Telecopier: (616) 954-7554
Attention: Anthony A. Barone
If to MascoTech, to:
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MascoTech, Inc.
21001 Van Born Road
Taylor, MI 48180
Telecopier: (313) 374-6227
Attention: President
With a copy to:
MascoTech, Inc.
21001 Van Born Road
Taylor, MI 48180
Telecopier: (313) 374-6229
Attention: General Counsel
or such other address or telecopier number as such party may hereafter specify
for that purpose by notice to the other party hereto. Each such notice, request
or other communication shall be effective when delivered at the address
specified in this Section 6.3.
6.4. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by MascoTech and the Company, or in the case of a waiver, by the
party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or future exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
6.5. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any provision
hereof is intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder.
6.6. Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto.
6.7. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersede all
prior
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agreements, understandings and negotiations, both written and oral, between the
parties with respect thereto. No representation, inducement, promise,
understanding, condition or warranty not set forth herein or therein has been
made or relied upon by any of the parties hereto.
6.8. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Michigan, without regard to the
conflicts of law rules of such state.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TOWER AUTOMOTIVE, INC.
By: /s/ Anthony A. Barone
-----------------------------
Name:
Title:
MASCOTECH, INC.
By: /s/ Keith Junk
-----------------------------
Name:
Title:
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Exhibit 4.18
The security represented by this Note was originally issued
on May 31, 1996, and has not been registered under the
Securities Act of 1933, as amended (the "Act"), and may not
be sold or transferred in the absence of an effective
registration statement under the Act or an exemption from
registration thereunder.
PROMISSORY NOTE
May 31, 1996 $5,000,000
R.J. Tower Corporation, a Michigan corporation (the "Company"), hereby
promises to pay to the order of MascoTech, Inc. the principal amount of
$5,000,000, as adjusted pursuant to Section 2(a) below, in accordance with the
provisions of this Note.
This Note is issued pursuant to the Stock Purchase Agreement, dated as
of May 31, 1996, by and between the Company and MascoTech, Inc. (the "Purchase
Agreement"), and this Note is the "Note" referred to in the Purchase Agreement.
Unless otherwise indicated herein, capitalized terms used in this Note have the
same meaning set forth in the Purchase Agreement.
1. Payment of Interest. Interest on the unpaid principal amount of
this Note (as determined pursuant to Section 2(a) below) shall accrue at the
lower of (i) seven percent per annum (7%) or (ii) the highest rate permitted by
law, computed on the basis of a 360 day year for the actual number of days
elapsed. All accrued interest which has not theretofore been paid shall be paid
in full on the date on which payment on this Note is due in full. Interest on
overdue principal and, to the extent permitted by applicable law, on overdue
installments of interest, shall accrue at a rate per annum equal to the lower of
(i) nine percent per annum (9%) or (ii) the highest rate permitted by law.
2. Payment of Principal on Note.
(a) Schedule Maturity. On the date on which a final determination is
made with respect to the Earnout Amount for the first Anniversary Period
following the Closing pursuant to Section 1.4 of the Purchase Agreement, the
Company shall pay in immediately available funds to the holder of this Note, to
the extent the following calculation yields a result greater than zero, the
principal amount of (A) $5,000,000 minus (B) the excess, if any, of (1) $29.5
million over (2) the Plant Profits for the first Anniversary Period following
the Closing.
(b) Prepayments. The Company may not prepay all or any portion of
the outstanding principal amount of the Note, without the prior written consent
of the holder hereof.
<PAGE>
3. Events of Default.
(a) Definition. For purposes of this Note, an Event of Default shall
be deemed to have occurred if:
(i) the Company fails to pay when due the full principal
amount or interest under this Note; or
(ii) the Company makes an assignment for the benefit of
creditors or admits in writing its inability to pay its debts generally as
they become due; or an order, judgment or decree is entered adjudicating
the Company bankrupt or insolvent; or any order for relief with respect to
the Company is entered under the Federal Bankruptcy Code; or the company
petitions or applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Company, or of any substantial part
of the assets of the company, or commences any proceeding (other than an
proceeding for the voluntary liquidation and dissolution of any Subsidiary)
relating to the Company under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction; or any such petition or application is filed, or any such
proceeding is commenced, against the Company and either (A) the Company by
any act indicates its approval thereof, consent thereto or acquiescence
therein or (B) such petition, application or proceeding is not dismissed
within 60 days. "Subsidiary" means any corporation of which the shares of
outstanding capital stock possessing the voting power (under ordinary
circumstances) in electing the board of directors are, at the time as of
which any determination is being made, owned by the Company, either
directly or indirectly through Subsidiaries.
(b) Consequences of Events of Default.
(i) If an Event of Default of the type described in
subparagraph 3(a)(ii) has occurred, the aggregate principal amount of this
Note (together with all accrued but unpaid interest thereon) shall become
immediately due and payable without any action on the part of the holder of
this Note, and the Company shall immediately pay to the holder of this Note
all amounts due and payable with respect to this Note.
(ii) If an Event of Default of the type described in
subparagraph 3(a)(i) has occurred, the holder of this Note may declare all
or any portion of the outstanding principal amount of this Note (together
with all accrued but unpaid interest thereon) due and payable.
(iii) The holder of this Note shall also have any other rights
which such holder may have been afforded under any contract or agreement at
any time and any other rights which such holder may have pursuant to
applicable law.
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<PAGE>
(iv) The Company shall pay all reasonable costs and expenses
incurred by the holder of this Note in connection with such holder's
collection of payments due and payable under this Note, including
reasonable attorneys' fees.
(v) The Company hereby waives diligence, presentment, protest
and demand and notice of protest and demand, dishonor and nonpayment of
this Note, and expressly agrees that this Note, or any payment hereunder,
may be extended from time to time and that the holder hereof may accept
security for this Note or release security for this Note, all without in
any way affecting the liability of the Company hereunder.
4. Cancellation. After all principal and accrued interest at any
time owed on this Note has been paid in full, this Note shall be surrendered to
the Company for cancellation and shall not be reissued.
5. Place of Payment. Payments of principal and interest are to be
wired to the holder to the account designated by:
MascoTech, Inc.
21001 Van Born Road
Taylor, MI 48180
Attention: General Accounting
or to such other address or to the attention of such other person as specified
by prior written notice to the Company.
6. Transfer. This Note may not be sold, assigned or otherwise
transferred without the prior written consent of the Company; provided, however,
that this Note may be sold, assigned or otherwise transferred to an affiliate of
MascoTech, Inc. without the prior written consent of the Company.
7. Setoff. This Note will be subject to setoff only to the extent
set forth in the Purchase Agreement.
8. Amendment and Waiver. Except as otherwise expressly provided
herein, the provisions of this Note may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
holder of this Note.
9. Governing Law. All questions concerning the construction,
validity and interpretation of this Note will be governed by and construed in
accordance with the domestic laws of the State of Michigan, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Michigan or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Michigan.
-3-
<PAGE>
10. Notices. All notices, demands and other communications to be
given or delivered under or by reason of the provisions of this Note will be in
writing and will be deemed to have been given: (i) when personally delivered,
(ii) one business day following deposit with reputable overnight express courier
or (iii) five days following mailing by certified or registered mail, postage
prepaid and return receipt requested. Notices, demands and communications to the
Company and the holder hereof will, unless and until another address is
specified in writing in the manner set forth above, be sent to the address
indicated below:
Notices to the Company:
----------------------
R.J. Tower Corporation
c/o Hidden Creek Industries
4508 IDS Center
Minneapolis, MN 55402
Attention: Scott D. Rued
with a copy to:
--------------
Tower Automotive, Inc.
6303 28th Street, S.E.
Grand Rapids, MI 49546
Attention: Anthony A. Barone
and an additional copy to:
-------------------------
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Jeffrey C. Hammes
John A. Schoenfeld
Notices to the holder:
---------------------
MascoTech, Inc.
21001 Van Born Road
Taylor, MI 48180
Attention: President
with a copy to:
--------------
MascoTech, Inc.
21001 Van Born Road
Taylor, MI 48180
Attention: General Counsel
* * * * *
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has executed and delivered this Note
on May 31, 1996.
R.J. TOWER CORPORATION
By /s/ Anthony A. Barone
-----------------------------
Its Vice President
---------------------------
<PAGE>
Exhibit 4.19
The security represented by this certificate was originally issued on May
31, 1996, and has not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be transferred without
registration under the Securities Act or an exemption from registration
thereunder. Prior to any sales or transfers of this certificate, except
pursuant to an effective registration statement under the Securities Act,
the holder hereof shall deliver to the issuer hereof an opinion of counsel,
satisfactory to the issuer, that such registration is not required.
TOWER AUTOMOTIVE, INC.
STOCK PURCHASE WARRANT
----------------------
Date of Issuance: May 31, 1996 Certificate No. W-1
FOR VALUE RECEIVED, Tower Automotive, Inc., a Delaware corporation (the
"Company"), hereby grants to MascoTech, Inc. (the "Registered Holder") the right
to purchase from the Company 200,000 fully paid and non-assessable shares of the
Company's common stock, par value $0.01 per share ("Common Stock") at a price
per share of $18.00 (as adjusted from time to time in accordance herewith, the
"Exercise Price"). This Warrant is issued pursuant to the terms of the Stock
Purchase Agreement, dated as of May 31, 1996 (the "Purchase Agreement"), between
the Company and the Registered Holder. Certain capitalized terms used herein
are defined in Section 3 hereof. The amount and kind of securities obtainable
pursuant to the rights granted hereunder and the purchase price for such
securities are subject to adjustment pursuant to the provisions contained in
this Warrant.
For income tax purposes, the value of this Warrant on the date hereof
is $2.0 million.
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
1A. Exercise Period. The Registered Holder may exercise, in whole or
in part (but not as to a fractional share of Common Stock), the purchase rights
represented by this Warrant at any time and from time to time after the Date of
Issuance to and including May 31, 2000 or, if such day is not a business day,
then on the next succeeding business day (the "Exercise Period").
1B. Exercise Procedure.
(i) This Warrant shall be deemed to have been exercised when the
Company has received all of the following items (the "Exercise Time"):
<PAGE>
(a) a completed Exercise Agreement, as described in paragraph 1C
below, executed by the Person exercising all or part of the purchase rights
represented by this Warrant (the "Purchaser");
(b) this Warrant; and
(c) a wire transfer of immediately available funds to the Company in
an amount equal to the product of the Exercise Price multiplied by the number of
shares of Common Stock being purchased upon such exercise (the "Aggregate
Exercise Price").
(ii) Certificates for shares of Common Stock purchased upon exercise
of this Warrant shall be delivered by the Company to the Purchaser within five
business days after the date of the Exercise Time. Unless this Warrant has
expired or all of the purchase rights represented hereby have been exercised,
the Company shall prepare a new Warrant, substantially identical hereto,
representing the rights formerly represented by this Warrant which have not
expired or been exercised and shall, within such five-day period, deliver such
new Warrant to the Person designated for delivery in the Exercise Agreement.
(iii) The Common Stock issuable upon the exercise of this Warrant
shall be deemed to have been issued to the Purchaser at the Exercise Time, and
the Purchaser shall be deemed for all purposes to have become the record holder
of such Common Stock at the Exercise Time notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to the
Holder.
(iv) The issuance of certificates for shares of Common Stock upon
exercise of this Warrant shall be made without charge to the Registered Holder
or the Purchaser for any issuance tax in respect thereof or other cost incurred
by the Company in connection with such exercise and the related issuance of
shares of Common Stock. Each share of Common Stock issuable upon exercise of
this Warrant shall, upon payment of the Exercise Price therefor, be validly
issued, fully paid and nonassessable and free from all liens and charges with
respect to the issuance thereof.
(v) The Company shall not close its books against the transfer of this
Warrant or of any share of Common Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company shall from time to time take all such action as may be
necessary to assure that the par value per share of the unissued Common Stock
acquirable upon exercise of this Warrant is at all times equal to or less than
the Exercise Price then in effect.
(vi) Notwithstanding any other provision hereof, if an exercise of any
portion of this Warrant is to be made in connection with a registered public
offering or the sale of the Company, the exercise of any portion of this Warrant
may, at the election of the holder hereof, be conditioned upon the consummation
of the public offering or sale of the Company in which case such exercise shall
not be deemed to be effective until the consummation of such transaction.
(vii) The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock solely for the purpose of
issuance upon the exercise of the
2
<PAGE>
Warrants, such number of shares of Common Stock issuable upon the exercise of
all outstanding Warrants. All shares of Common Stock which are so issuable
shall, when issued, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges. The Company shall take all such actions
as may be necessary to assure that all such shares of Common Stock may be so
issued without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which shares of Common may
be listed (except for official notice of issuance which shall be immediately
delivered by the Company upon each such issuance). The Company shall not take
any action which would cause the number of authorized but unissued shares of
Common Stock to be less than the number of such shares required to be reserved
hereunder for issuance upon exercise of the Warrant.
(viii) Upon any exercise of this Warrant, the Company may require
customary investment representations from the Registered Holder and the
Purchaser to assure that the issuance of the Common Stock hereunder shall not
require registration or qualification under the Securities Act or any state
securities laws.
1C. Exercise Agreement. Upon any exercise of this Warrant, the
Exercise Agreement shall be substantially in the form set forth in Exhibit I
hereto, except that if the shares of Common Stock are not to be issued in the
name of the Person in whose name this Warrant is registered, the Exercise
Agreement shall also state the name of the Person to whom the certificates for
the shares of Common Stock are to be issued, and if the number of shares of
Common Stock to be issued does not include all the shares of Common Stock
purchasable hereunder, it shall also state the name of the Person to whom a new
Warrant for the unexercised portion of the rights hereunder is to be delivered.
Such Exercise Agreement shall be dated the actual date of execution thereof.
1D. Fractional Shares. If a fractional share of Common Stock would,
but for the provisions of paragraph 1A, be issuable upon exercise of the rights
represented by this Warrant, the Company shall, within five business days after
the date of the Exercise Time, deliver to the Purchaser a check payable to the
Purchaser in lieu of such fractional share in an amount equal to the difference
between the Market Price of such fractional share as of the date of the Exercise
Time and the Exercise Price of such fractional share.
Section 2. Adjustment of Exercise Price and Number of Shares. In
order to prevent dilution of the rights granted under this Warrant, the Exercise
Price shall be subject to adjustment from time to time as provided in this
Section 2, and the number of shares of Common Stock obtainable upon exercise of
this Warrant shall be subject to adjustment from time to time as provided in
this Section 2.
2A. (i) Subdivision or Combination of Common Stock. If the Company
at any time after the date hereof (a) declares a dividend or makes a
distribution on its shares of capital stock payable in Common Stock or (b)
subdivides (by any stock split, stock dividend or recapitalization) its
outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision shall be proportionately
reduced and the number of shares of Common Stock obtainable upon exercise of
this Warrant shall be proportionately increased. If the Company at any time
combines (by reverse stock split or recapitalization) its outstanding shares of
Common Stock into a smaller number of shares, the
3
<PAGE>
Exercise Price in effect immediately prior to such combination shall be
proportionately increased and the number of shares of Common Stock obtainable
upon exercise of this Warrant shall be proportionately decreased.
(ii) Sale of Common Stock at Less than Market Price. In case the
Company shall issue or sell any Common Stock (other than Common Stock issued (a)
upon exercise of the Warrants, (b) pursuant to the Company's Independent
Director Stock Option Plan, the 1994 Key Employee Stock Option Plan or pursuant
to any similar Common Stock related employee or director compensation plan or
agreement of the Company approved by the Company's board of directors (the
"Board of Directors"), (c) upon exercise, exchange or conversion of any security
either issued on or prior to the date hereof or the issuance of which caused an
adjustment hereunder, or (d) pursuant to any registered public offering of
Common Stock) without consideration or for a consideration per share less than
95% of the Market Price (as defined below) per share of Common Stock, the
Exercise Price to be in effect after such issuance or sale shall be determined
by multiplying the Exercise Price in effect immediately prior to such issuance
or sale by a fraction, the numerator of which shall be the sum of (x) the number
of shares of Common Stock outstanding immediately prior to the time of such
issuance or sale multiplied by the Market Price per share of Common Stock
immediately prior to such issuance or sale and (y) the aggregate consideration,
if any, to be received by the Company upon such issuance or sale, and the
denominator of which shall be the product of the aggregate number of shares of
Common Stock outstanding immediately after such issuance or sale and the Market
Price per share of Common Stock immediately prior to such issuance or sale. In
case any portion of the consideration to be received by the Company shall be in
a form other than cash, the fair market value of such noncash consideration
shall be utilized in the foregoing computation. Such fair market value shall be
determined by the Board of Directors of the Company. The Registered Holders
shall be notified promptly of any consideration other than cash to be received
by the Company and furnished with a description of the consideration and the
fair market value thereof, as determined by the Board of Directors.
(iii) Setting Record Date for Issuance of Certain Rights, Options or
Warrants. In case the Company shall fix a record date for the issuance of
rights, options or warrants to the holders of its Common Stock or other
securities entitling such holders to subscribe for or purchase for a period
expiring within 60 days of such record date shares of Common Stock (or
securities convertible into shares of Common Stock) at a price per share of
Common Stock (or having a conversion price per share of Common Stock, if a
security convertible into shares of Common Stock) less than 95% of the Market
Price per share of Common Stock on such record date, the maximum number of
shares of Common Stock issuable upon exercise of such rights, options or
warrants (or conversion of such convertible securities) shall be deemed to have
been issued and outstanding as of such record date and the Exercise Price shall
be adjusted pursuant to paragraph 2A(ii) hereof, as though such maximum number
of shares of Common Stock had been so issued for an aggregate consideration
payable by the holders of such rights, options, warrants or convertible
securities prior to their receipt of such shares of Common Stock. In case any
portion of such consideration shall be in a form other than cash, the fair
market value of such noncash consideration shall be determined as set forth in
paragraph 2A(ii) hereof. Such adjustment shall be made successively whenever
such record date is fixed; and in the event that such rights, options or
warrants are not so issued or expire unexercised, or in the event of a change in
the number of shares of Common Stock to which the holders of such rights,
options or warrants are entitled (other than pursuant to adjustment provisions
4
<PAGE>
therein comparable to those contained in this paragraph), the Exercise Price
shall again be adjusted to be the Exercise Price which would then be in effect
if such record date had not been fixed, in the former event, or the Exercise
Price which would then be in effect if such holder had initially been entitled
to such changed number of shares of Common Stock, in the latter event.
(iv) Issuance of Certain Rights, Options or Warrants. In case the
Company shall issue rights, options (other than options issued pursuant to a
plan or agreement described in clause (b) of paragraph (ii)) or warrants
entitling the holders thereof to subscribe for or purchase Common Stock (or
securities convertible into shares of Common Stock) or shall issue convertible
securities, and the price per share of Common Stock of such rights, options,
warrants or convertible securities (including the aggregate amount of additional
consideration payable upon exercise, conversion or exchange of such rights,
options, warrants or convertible securities) is less than 95% of the Market
Price per share of Common Stock, the maximum number of shares of Common Stock
issuable upon exercise of such rights, options or warrants or upon conversion of
such convertible securities shall be deemed to have been issued and outstanding
as of the date of such sale or issuance, and the Exercise Price shall be
adjusted pursuant to paragraph 2A(ii) hereof as though such maximum number of
shares of Common Stock had been so issued for an aggregate consideration equal
to the aggregate consideration paid for such rights, options, warrants or
convertible securities and the aggregate consideration payable by the holders of
such rights, options, warrants or convertible securities prior to their receipt
of such shares of Common Stock. In case any portion of such consideration shall
be in a form other than cash, the fair market value of such noncash
consideration shall be determined as set forth in paragraph 2A(ii) hereof. Such
adjustment shall be made successively whenever such rights, options, warrants or
convertible securities are issued; and in the event that such rights, options or
warrants expire unexercised, or in the event of a change in the number of shares
of Common Stock to which the holders of such rights, options, warrants or
convertible securities are entitled (other than pursuant to adjustment
provisions therein comparable to those contained in this paragraph (iv)), the
Exercise Price shall again be adjusted to be the Exercise Price which would then
be in effect if such rights, options, warrants or convertible securities had not
been issued, in the former event, or the Exercise Price which would then be in
effect if such holders had initially be entitled to such changed number of
shares of Common Stock, in the latter event. No adjustment of the Exercise Price
shall be made pursuant to this paragraph to the extent that the Exercise Price
shall have been adjusted pursuant to paragraph 2A(iii) upon the setting of any
record date relating to such rights, options, warrants or convertible securities
and such adjustment fully reflects the number of shares of Common Stock to which
the holders of such rights, options, warrants or convertible securities are
entitled and the price payable therefor.
(v) Certain Distributions. In case the Company shall fix a record
date for the making of a distribution to holders of Common Stock (including any
such distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, assets or
other property (other than cash dividends or distributions and dividends payable
in Common Stock or rights, options or warrants referred to in, and for which an
adjustment is made pursuant to, paragraph 2A(iii) hereof), the Exercise Price to
be in effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the Market Price per share of Common Stock on
such record date, less the fair market value (determined as set forth in
paragraph 2A(ii) hereof) of the portion of the assets, other property or
evidence of indebtedness so to be
5
<PAGE>
distributed which is applicable to one share of Common Stock, and the
denominator of which shall be such Market Price per share of Common Stock. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Exercise Price shall
again be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
(vi) Extraordinary Dividends. In case in any fiscal quarter (a) the
Company shall distribute to all holders of shares of Common Stock any cash
dividend or distribution or (b) the Company or any of its subsidiaries shall
purchase Common Stock pursuant to a tender offer for a purchase price per share
greater than 105% of the Market Price per share of Common Stock on the date of
purchase, and during such fiscal quarter the sum of (x) all such cash dividends
or distributions, plus (y) the aggregate amount by which the fair market value
(determined as set forth in paragraph 2A(ii) hereof) of the consideration paid
in purchasing all such shares of Common Stock exceeds the Market Price per share
of Common Stock on the date of such purchase multiplied by the number of shares
of Common Stock so purchased, shall exceed the greater of (x) 2.5% of the Market
Price per share of Common Stock multiplied by the number of shares of Common
Stock outstanding at the earlier of the record date for the latest such cash
dividend or distribution or tender offer or the date at which the Company shall
have publicly announced such dividend or distribution or tender offer and (y)
the amount per share of Common Stock of the next preceding quarterly cash
dividend not constituting an Extraordinary Dividend multiplied by the number of
shares of Common Stock outstanding at the record date for such quarterly cash
dividend, then the Exercise Price shall be adjusted on the date of such dividend
or distribution, or the termination of such tender offer, to a price determined
by multiplying the Exercise Price in effect immediately prior to the earlier of
such dates by a fraction, of which the numerator shall be the Market Price per
share of Common Stock on the earlier of such dates less the fair market value
(determined as set forth in paragraph 2A(ii) hereof) of the portion of such
distribution or excess amount which is applicable to one share of Common Stock
and of which the denominator shall be such Market Price per share of Common
Stock on the earlier of such dates.
2B. Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets or other transaction,
in each case which is effected in such a way that the holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as "Organic Change." Prior to the consummation of any Organic Change,
the Company shall make appropriate provision to insure that each of the
Registered Holders of the Warrants shall thereafter have the right to acquire
and receive, in lieu of or addition to (as the case may be) the shares of Common
Stock immediately theretofore acquirable and receivable upon the exercise of
this Warrant, such shares of stock, securities or assets (including cash) as may
be issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore acquirable and receivable upon exercise of
this Warrant had such Organic Change not taken place. The Company shall not
effect any such consolidation, merger or sale, unless prior to the consummation
thereof, the successor entity (if other than the Company) resulting from
consolidation or merger or the entity purchasing such assets assumes by written
instrument, the obligation to deliver to each such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to acquire.
6
<PAGE>
2C. Notices.
(i) Immediately upon any adjustment of the Exercise Price, the Company
shall give written notice thereof to the Registered Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.
(ii) The Company shall also give written notice to the Registered
Holders at least 20 days prior to the date on which any Organic Change,
dissolution or liquidation shall take place.
2D. Adjustments to Number of Shares. Upon each adjustment of the
Exercise Price as a result of the calculations made in paragraphs (ii), (iii),
(iv), (v) and (vi) of Section 2A, the number of shares for which this Warrant is
exercisable immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
shares of Common Stock obtained by (a) multiplying the number of shares covered
by this Warrant immediately prior to adjustment by the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price and (b) dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
2E. Adjustments to Other Capital Stock. In the event that, at the
time as a result of the provisions of this Section 2, the holder of this Warrant
upon subsequent exercise shall become entitled to receive any shares of capital
stock other than Common Stock, the number of such other shares so receivable
upon exercise of this Warrant shall thereafter be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions contained herein.
Section 3. Definitions. The following terms have meanings set forth
below:
"Market Price" means as to any security the average of the closing
prices of such security's sales on all domestic securities exchanges on which
such security may at the time be listed, or, if there have been no sales on any
such exchange on any day, the average of the highest bid and lowest asked prices
on all such exchanges at the end of such day, or, if on any day such security is
not so listed, the average of the representative bid and asked prices quoted in
the NASDAQ System as of 4:00 P.M., New York time, on such day, or, if on any day
such security is not quoted in the NASDAQ System, the average of the highest bid
and lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of 30 days
consisting of the day as of which "Market Price" is being determined and the 29
consecutive business days prior to such day; provided that if such security is
listed on any domestic securities exchange the term "business days" as used in
this sentence means business days on which such exchange is open for trading. If
at any time such security is not listed on any domestic securities exchange or
quoted in the NASDAQ System or the domestic over-the-counter market, the "Market
Price" shall be the fair value thereof determined jointly by the Company and the
Registered Holder; provided that if such parties are unable to reach agreement
within a reasonable period of time, such fair value shall be determined by an
appraiser jointly selected by the Company and the Registered Holder. The
determination of such appraiser shall be final and binding on the Company and
the Registered Holder, and the fees and expenses of such appraiser shall be paid
by the Company.
7
<PAGE>
"Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
Section 4. No Voting Rights; Limitations of Liability. This Warrant
shall not entitle the holder hereof to any voting rights or other rights as a
stockholder of the Company. No provision hereof, in the absence of affirmative
action by the Registered Holder to purchase Common Stock, and no enumeration
herein of the rights or privileges of the Registered Holder shall give rise to
any liability of such holder for the Exercise Price of Common Stock acquirable
by exercise hereof or as a stockholder of the Company.
Section 5. Warrant Transferable. This Warrant shall not be sold,
assigned or otherwise transferred, in whole or in part, without the prior
written consent of the Company.
Section 6. Legend. The Common Stock issuable under this Warrant
shall be imprinted with the following legend:
The security represented by this certificate was originally issued on
________, and has not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be transferred without
registration under the Securities Act or an exemption from registration
thereunder. Prior to any sales or transfers of this certificate, except
pursuant to an effective registration statement under the Securities Act,
the holder hereof shall deliver to the issuer hereof an opinion of counsel,
satisfactory to the issuer, that such registration is not required.
Section 7. Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Registered Holder at
the principal office of the Company, for new Warrants of like tenor representing
in the aggregate the purchase rights hereunder, and each of such new Warrants
shall represent such portion of such rights as is designated by the Registered
Holder at the time of such surrender. The date the Company initially issues this
Warrant shall be deemed to be the "Date of Issuance" hereof regardless of the
number of times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant shall be issued. All Warrants
representing portions of the rights hereunder are referred to herein as the
"Warrants."
Section 8. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing this Warrant, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to the Company
(provided that if the holder is a financial institution or other institutional
investor its own agreement shall be satisfactory), or, in the case of any such
mutilation upon surrender of such certificate, the Company shall (at its
expense) execute and deliver in lieu of such certificate a new certificate of
like kind representing the same rights represented by such lost, stolen,
destroyed or mutilated certificate and dated the date of such lost, stolen,
destroyed or mutilated certificate.
8
<PAGE>
Section 9. Notices. Except as otherwise expressly provided herein,
all notices referred to in this Warrant shall be in writing and shall be
delivered personally, sent by reputable overnight courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
or deposited in the U.S. Mail (i) to the Company, at its principal executive
offices and (ii) to the Registered Holder of this Warrant, at such holder's
address as it appears in the records of the Company (unless otherwise indicated
by any such holder).
Section 10. Amendment and Waiver. Except as otherwise provided
herein, the provisions of the Warrants may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Registered Holder.
Section 11. Descriptive Headings; Governing Law. The descriptive
headings of the several Sections and paragraphs of this Warrant are inserted for
convenience only and do not consti tute a part of this Warrant. The corporation
laws of the State of Delaware shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal law of the State of Michigan, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
Michigan or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Michigan.
* * * *
9
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and attested by its duly authorized officers and to be dated the Date of
Issuance hereof.
TOWER AUTOMOTIVE, INC.
By /s/ Anthony A. Barone
----------------------------
Its Vice President
---------------------------
10
<PAGE>
EXHIBIT I
EXERCISE AGREEMENT
------------------
To: Dated:
The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. W-____), hereby agrees to subscribe for the purchase of
______ shares of the Common Stock covered by such Warrant and makes payment
herewith in full therefor at the price per share provided by such Warrant.
Signature
----------------------------
Address
------------------------------
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<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 8-K, into the Company's previously filed
Registration Statement File No. 33-91578.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota
May 31, 1996 /s/ Arthur Andersen LLP
<PAGE>
EXHIBIT 99.1
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DATE: May 31, 1996
FROM: FOR:
Padilla Speer Beardsley, Inc. Tower Automotive, Inc.
224 Franklin Avenue West 4508 IDS Center
Minneapolis, Minnesota 55404 Minneapolis, Minnesota 55402
John Mackay (612) 871-8877 Scott Rued (612) 342-2310
FOR IMMEDIATE RELEASE
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TOWER AUTOMOTIVE, INC.
COMPLETES ACQUISITION OF MASCOTECH STAMPING
TECHNOLOGIES, INC.
MINNEAPOLIS, MAY 31, 1996 -- Tower Automotive, Inc. (NASDAQ:TWER), today
announced that it has completed the previously announced acquisition of all of
the outstanding common stock of MascoTech Stamping Technologies, Inc. (MSTI), a
wholly owned subsidiary of MascoTech, Inc. (NYSE:MSX).
MSTI manufactures and assembles chassis and suspension components for the
automotive industry in three facilities in Ohio and Indiana, and had 1995
revenues of approximately $153 million. Principal customers are Ford and
Chrysler.
The purchase price consisted of $55 million in cash, a $5 million note,
785,000 shares of Tower Automotive common stock and warrants to acquire 200,000
shares of Tower Automotive common stock at an exercise price of $18 per share.
MascoTech will receive additional consideration of up to $25 million, if this
business achieves certain operating results over the next three years. The cash
portion of the purchase price was financed with the proceeds of a $65 million
private placement of senior notes.
In a separate transaction, Tower Automotive has agreed to resource certain
production from a non-acquired MSTI facility to existing Tower Automotive
facilities. In addition, Tower Automotive will acquire selected inventory,
tooling and equipment related to such production.
Tower Automotive, Inc., is a leading designer and manufacturer of high
quality, engineered metal stampings and assemblies for North American light
vehicle manufacturers including Ford, Chrysler, Honda, Mazda, Toyota, Nissan and
General Motors. The Company's products include engineered mechanical parts, such
as hood and deck lid hinges and brake components, large structural stampings and
assemblies, such as body pillars, floor pan components and major housing
assemblies, and chassis and suspension components. The Company has operating
headquarters in Grand Rapids, Michigan and a corporate office in Minneapolis,
Minnesota.
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