<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission file number 0-24644
TOWER AUTOMOTIVE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 41-1746238
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4508 IDS CENTER 55402
MINNEAPOLIS, MINNESOTA (Zip Code)
(Address of principal executive offices)
(612) 342-2310
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
--- ---
The number of shares outstanding of the Registrant's common stock, par value
$.01 per share, at October 15, 1996 was 14,225,553 shares.
<PAGE>
ITEM 1 - FINANCIAL INFORMATION
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands Except per Share Amounts - Unaudited)
Three Months Ended September 30,
--------------------------------
1996 1995
------------- ------------
(Note 4)
Revenues $ 114,583 $ 51,166
Cost of sales 97,542 43,154
------------- ------------
Gross profit 17,041 8,012
Selling, general and administrative
expenses 6,211 3,586
Amortization expense 675 300
------------- ------------
Operating income 10,155 4,126
Interest expense, net 1,529 376
------------- ------------
Income before provision for income taxes 8,626 3,750
Provision for income taxes 3,390 1,500
------------- ------------
Net income $ 5,236 $ 2,250
------------- ------------
------------- ------------
Net income applicable to common
stockholders $ 5,261 $ 2,294
------------- ------------
------------- ------------
Net income per common and common
equivalent share $ 0.36 $ 0.20
------------- ------------
------------- ------------
Weighted average common and common
equivalent shares outstanding 14,764 11,712
------------- ------------
------------- ------------
The accompanying notes are an integral part
of these condensed consolidated statements.
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<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands Except per Share Amounts - Unaudited)
Nine Months Ended September 30,
-------------------------------
1996 1995
------------- -----------
(Note 4)
Revenues $ 280,025 $ 164,764
Cost of sales 237,118 137,367
------------- ------------
Gross profit 42,907 27,397
Selling, general and administrative expenses 14,294 10,903
Amortization expense 1,525 900
------------- ------------
Operating income 27,088 15,594
Interest expense, net 4,302 1,068
------------- ------------
Income before provision for income taxes 22,786 14,526
Provision for income taxes 9,060 5,920
------------- ------------
Net income $ 13,726 $ 8,606
------------- ------------
------------- ------------
Net income applicable to common
stockholders $ 13,833 $ 8,738
------------- ------------
------------- ------------
Net income per common and common
equivalent share $ 1.07 $ 0.75
------------- ------------
------------- ------------
Weighted average common and common
equivalent shares outstanding 12,924 11,689
------------- ------------
------------- ------------
The accompanying notes are an integral part of
these condensed consolidated statements.
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<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
September 30, December 31,
Assets 1996 1995
- ---------------------------------------- ------------- ------------
(unaudited)
Current assets:
Cash and cash equivalents $ 38,534 $ 957
Accounts receivable 70,071 39,133
Inventories 24,094 11,398
Other current assets 12,055 10,338
------------- ------------
Total current assets 144,754 61,826
Property, plant and equipment, net 152,433 87,587
Restricted cash 10,486 14,385
Goodwill and other intangible assets, net 99,205 45,678
------------- ------------
$ 406,878 $ 209,476
------------- ------------
------------- ------------
Liabilities and Stockholders' Investment
- ----------------------------------------
Current liabilities:
Current maturities of long-term debt $ 723 $ 779
Accounts payable 44,554 19,022
Accrued liabilities 29,915 9,780
------------- ------------
Total current liabilities 75,192 29,581
Long-term debt, net of current maturities 113,771 70,300
Other noncurrent liabilities 43,367 24,010
------------- ------------
Stockholders' investment:
Preferred stock -- --
Common stock 142 108
Warrants to acquire common stock 2,000 --
Additional paid-in capital 136,342 63,461
Retained earnings 36,239 22,513
Subscriptions receivable (175) (497)
------------- ------------
Total stockholders' investment 174,548 85,585
------------- ------------
$ 406,878 $ 209,476
------------- ------------
------------- ------------
The accompanying notes are an integral part of these
condensed consolidated balance sheets.
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<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS - UNAUDITED)
Nine Months Ended September 30,
-------------------------------
1996 1995
---------- ---------
OPERATING ACTIVITIES:
Net income $ 13,726 $ 8,606
Adjustments to reconcile net income to
net cash provided by operating activities -
Depreciation and amortization 9,658 4,785
Changes in other operating items 2,925 (3,888)
---------- ---------
Net cash provided by operating activities 26,309 9,503
---------- ---------
INVESTING ACTIVITIES:
Acquisitions, net of cash acquired (80,170) -
Capital expenditures, net (9,870) (18,806)
Change in restricted cash 3,899 (7,727)
---------- ---------
Net cash used in investing activities (86,141) (26,533)
---------- ---------
FINANCING ACTIVITIES:
Proceeds from borrowings 197,813 146,522
Repayment of debt (152,228) (124,743)
Net proceeds from public stock offering 51,293 -
Proceeds from issuance of stock 209 -
Other, net 322 (908)
---------- ---------
Net cash provided by financing activities 97,409 20,871
---------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS 37,577 3,841
CASH AND CASH EQUIVALENTS:
Beginning of period 957 55
---------- ---------
End of period $ 38,534 $ 3,896
---------- ---------
---------- ---------
The accompanying notes are an integral part of these
condensed consolidated statements.
-5-
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying condensed consolidated financial statements have been
prepared by Tower Automotive, Inc. (the "Company"), without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission.
The information furnished in the condensed consolidated financial
statements includes normal recurring adjustments and reflects all
adjustments which are, in the opinion of management, necessary for a fair
presentation of such financial statements. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. Although the
Company believes that the disclosures are adequate to make the information
presented not misleading, it is suggested that these condensed consolidated
financial statements be read in conjunction with the audited financial
statements and the notes thereto included in the Company's 1995 Annual
Report to Stockholders. Certain amounts previously reported in the
September 30, 1995 statement of operations have been reclassified to
conform to the September 30, 1996 presentation. These reclassifications
had no effect on previously reported operating income or net income.
Revenues and operating results for the three and nine months ended
September 30, 1996 are not necessarily indicative of the results to be
expected for the full year.
2. On June 20, 1996, the Company completed an offering of 2,000,000 shares of
Common Stock at an offering price of $24.50 per share (the "Offering"). A
portion of the net proceeds from this Offering, of approximately $46
million, were used by the Company to retire borrowings under its secured
credit agreement. The remaining proceeds will be used for other general
corporate purposes that may include repayment of other indebtedness,
potential acquisitions or capital expenditures. On July 24, 1996, the
Company issued an additional 232,900 shares of Common Stock pursuant to the
underwriters' over-allotment option for net proceeds of approximately $5
million.
3. Inventories consisted of the following (in thousands):
Sept. 30, 1996 Dec. 31, 1995
---------------- ---------------
Raw materials $ 10,410 $ 4,836
Work-in-process 7,185 3,431
Finished goods 6,499 3,131
---------------- ---------------
$ 24,094 $ 11,398
---------------- ---------------
---------------- ---------------
4. On May 31, 1996, the Company acquired all of the outstanding common stock
of MascoTech Stamping Technologies, Inc. (MSTI), a wholly owned subsidiary
of MascoTech, Inc. (MascoTech). Consideration consisted of $55 million in
cash, 785,000 shares of Common Stock and warrants to acquire 200,000 shares
of Common Stock at an exercise
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<PAGE>
price of $18 per share. The Company will make additional payments to
MascoTech if certain operating targets are achieved by the MSTI facilities
in the first three years following the acquisition. In addition, the
Company issued a 7% promissory note in favor of MascoTech payable
approximately one year following the acquisition in an aggregate principal
amount of $5 million, which is subject to reduction based on the operating
profits of the MSTI facilities for the 12 months following the acquisition.
MSTI manufactures metal stampings and assemblies for the North American
automotive industry from facilities in Ohio, Indiana and Michigan. The
cash portion of the purchase price was financed with proceeds from
borrowings under Senior Notes (See Note 5).
On May 6, 1996, the Company agreed to assume production of certain parts
previously manufactured at a non-acquired MascoTech facility and will make
payments to MascoTech equal to 5% of the revenues to be derived by the
Company during the first twelve months of production from each assumed
purchase order resourced to the Company. The Company will also acquire
selected inventory, tooling and production equipment used for such
production at an estimated cost of approximately $6 million. The purchased
assets will be transferred to the Company's existing facilities by the end
of 1996.
On January 16, 1996, the Company acquired all of the outstanding common
stock of Trylon Corporation (Trylon) for total consideration, including
transaction costs, of approximately $25 million. Trylon manufactures metal
stampings and assemblies for the North American automotive industry from
four facilities in Traverse City, Michigan. The acquisition was financed
with borrowings under a $25 million term loan which was repaid in May 1996
using a portion of the proceeds of the sale of the Senior Notes (See Note
5) and borrowings under the Company's revolving credit facility.
The acquisitions of MSTI and Trylon have been accounted for as purchases
and, accordingly, the assets and liabilities have been recorded based upon
preliminary estimates of fair value as of the dates of acquisition. The
Company does not believe the final allocations of the purchase price will
be materially different than the preliminary allocations. The purchase
price in excess of the fair values of the net assets acquired is included
in goodwill in the accompanying condensed consolidated balance sheets.
Results of operations from MSTI and Trylon have been included in the
accompanying condensed consolidated financial statements from the dates of
acquisition. The accompanying unaudited consolidated pro forma results of
operations for the nine months ended September 30, 1996 and 1995 give
effect to the Offering and the acquisitions of MSTI and Trylon as if they
were completed at the beginning of the respective periods. The unaudited
pro forma financial information does not purport to represent what the
Company's results of operations would actually have been if such
transactions had occurred at such date or to project the Company's results
of future operations (in thousands, except per share data):
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<PAGE>
Pro Forma Nine Months
Ended September 30,
-------------------------------
1996 1995
----------- -----------
Revenues $ 353,828 $ 314,526
----------- -----------
----------- -----------
Net income applicable to common
stockholders $ 17,144 $ 12,557
----------- -----------
----------- -----------
Weighted average common and common
equivalent shares outstanding 14,773 14,474
----------- -----------
----------- -----------
Net income per common and common
equivalent share $ 1.16 $ 0.87
----------- -----------
----------- -----------
5. Long-term debt consisted of the following (in thousands):
September 30, December 31,
1996 1995
------------- ------------
Revolving credit facility $ - $ 18,631
Senior Notes 65,000 -
Industrial development revenue
bonds 46,645 47,365
Convertible subordinated notes 2,819 5,000
Other 30 83
------------- ------------
114,494 71,079
Less-current maturities (723) (779)
------------ ------------
Total long-term debt $ 113,771 $ 70,300
------------ ------------
------------ ------------
In September 1996, the Company and its lenders amended the Credit Agreement
to consist of a $75 million unsecured revolving credit facility which
matures in January 2001 and bears interest at a prime-based rate or LIBOR
plus a variable margin. The amended Credit Agreement also provides for the
issuance of up to $10 million in letters of credit. As of September 30,
1996, there were approximately $104,000 in letters of credit outstanding,
principally related to the industrial development revenue bonds.
The Company financed the cash portion of the MSTI acquisition through the
issuance in two series of Senior Notes having an aggregate principal amount
of $65 million. The $40 million of Series A Senior Notes bear interest at
7.65%, have a final maturity on June 1, 2006 and require annual principal
payments commencing on June 1, 2000 which continue every year
-8-
<PAGE>
thereafter until their final maturity. The $25 million of Series B Senior
Notes bear interest at 7.82%, have a final maturity on June 1, 2008 and
require annual principal payments commencing on June 1, 2004 which continue
every year thereafter until their final maturity. The Senior Notes require
the Company to make semi-annual interest payments commencing December 1,
1996. Net proceeds from the sale of the Senior Notes in excess of the
amounts used to finance the cash portion of the MSTI acquisition, together
with borrowings under the revolving credit facility, were used to repay in
full the remaining balance outstanding on the $25 million term loan
incurred by the Company in connection with the acquisition of Trylon.
In connection with the acquisition of Edgewood in May 1994, the Company
issued $5.0 million in Convertible Subordinated Notes, which are generally
convertible any time into 823,874 shares of Common Stock. As of September
30, 1996, approximately $2.2 million of these notes had been converted into
359,291 shares of Common Stock.
6. Supplemental cash flow information (in thousands):
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
1996 1995 1996 1995
-------------- ---------------- --------------- --------------
<S> <C> <C> <C> <C>
Cash paid for -
Interest $1,460 $970 $4,495 $2,973
Income taxes 900 25 4,125 1,224
</TABLE>
-9-
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 1996 TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1995
REVENUES -- Revenues for the three months ended September 30, 1996 totaled
$114.6 million compared to $51.2 million for the three months ended September
30, 1995, an increase of $63.4 million. Approximately $50 million of the
increase in revenues is attributable to the acquisitions of MSTI in May 1996 and
Trylon in January 1996. The remaining increase is due to new business awarded
to the Company.
COST OF SALES -- Cost of sales as a percentage of revenues for the three
months ended September 30, 1996 was 85.1% compared to 84.3% for the three months
ended September 30, 1995. The decrease in gross margin was the result of
inherent lower margins from the MSTI and Trylon business.
S, G & A EXPENSES -- Selling, general and administrative expenses increased
from $3.6 million for the three months ended September 30, 1995 to $6.2 million
for the three months ended September 30, 1996. The increase was due primarily
to incremental costs associated with the Company's 1996 acquisitions and
increased up front engineering costs. As a percentage of revenues, selling,
general and administrative expenses were 5.4% for the three months ended
September 30, 1996 compared to 7.0% for the three months ended September 30,
1995.
INTEREST EXPENSE -- Interest expense for the three months ended September 30,
1996 was $1.5 million compared to $376,000 for the three months ended September
30, 1995. The increase was due principally to increased borrowings incurred to
fund the acquisitions of MSTI and Trylon offset by the application of the
proceeds from the Offering.
INCOME TAXES -- The effective income tax rate was 39.3% for the three months
ended September 30, 1996 and 40.0% for the three months ended September 30,
1995. The effective rates differed from the statutory rates primarily as a
result of state taxes and non-deductible goodwill amortization.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1995
REVENUES -- Revenues for the nine months ended September 30, 1996 totaled
$280.0 million compared to $164.8 million for the nine months ended September
30, 1995, an increase of $115.2 million or 70.0%. Approximately $83 million of
the increase over 1995 is attributable to the acquisitions of MSTI and Trylon.
The remaining increase is due to new business awarded to the Company. These
increases were partially offset by production decreases in the first half of the
year on key models served by the Company, including the Ford Escort, Villager,
Econoline and the Chrysler LH line.
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<PAGE>
COST OF SALES -- Cost of sales as a percentage of revenues for the nine months
ended September 30, 1996 was 84.7% compared to 83.4% for the nine months ended
September 30, 1995. The decrease in gross margin was the result of inherent
lower margins from the MSTI and Trylon business and fixed costs at the Company's
Bardstown facility while the plant is ramping up and operating at less than full
capacity, partially offset by operating efficiencies and enhanced productivity.
S, G & A EXPENSES -- Selling, general and administrative expenses increased
from $10.9 million for the nine months ended September 30, 1995 to $14.3 million
for the nine months ended September 30, 1996. The increase was due primarily to
incremental costs associated with the Company's 1996 acquisitions. As a
percentage of revenues, selling, general and administrative expenses were 5.1%
for the nine months ended September 30, 1996 compared to 6.6% for the nine
months ended September 30, 1995.
INTEREST EXPENSE -- Interest expense for the nine months ended September 30,
1996 was $4.3 million compared to $1.1 million for the nine months ended
September 30, 1995. The increase was due principally to increased borrowings
incurred to fund the acquisitions of MSTI and Trylon partially offset by the
application of the proceeds from the Offering.
INCOME TAXES -- The effective income tax rate was 39.8% for the nine months
ended September 30, 1996 and 40.8% for the nine months ended September 30, 1995.
The effective rates differed from the statutory rates primarily as a result of
state taxes and non-deductible goodwill amortization.
SEASONALITY
The Company's performance is dependent on automotive vehicle production, which
is seasonal in nature. The third calendar quarter is historically the weakest
due to the impact of OEM plant shutdowns in July for vacations and model
changeovers.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996, the Company had no borrowings outstanding under its
Credit Agreement. The Company used a portion of the net proceeds from the
Offering to repay borrowings under the Credit Agreement. In connection with the
MSTI acquisition, the Company and its lenders amended the terms of the Credit
Agreement to permit the acquisition and the related financing arrangements. The
Credit Agreement, as amended, consists of a revolving credit facility with a
committed amount of $75.0 million (subject to eligible accounts receivable and
inventory, as defined in the Credit Agreement, which exceeded $75.0 million as
of September 30, 1996). The Credit Agreement matures in January 2001 and bears
interest at variable rates equal to, at the Company's option, either a prime-
based rate or LIBOR plus a variable margin. In September 1996, the Credit
Agreement was amended to provide for unsecured borrowings.
At September 30, 1996, the Company also had $43.8 million of indebtedness
outstanding pursuant to industrial development revenue bonds ("IRBs") issued
with the City of Bardstown, Kentucky. Proceeds from these IRBs were used to
finance construction of a 240,000 square foot manufacturing facility and the
related purchase of equipment. The Bardstown IRBs, which are due June 1, 2024
and March 1, 2025, are collateralized by a letter of credit. As of September
30,
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<PAGE>
1996, $34.5 million of the proceeds had been expended or committed for the first
phase of the facility and related equipment. The unexpended proceeds from the
Bardstown IRBs of $10.5 million at September 30, 1996, are invested in treasury
securities and will be used to finance the second phase of the facility. These
IRBs bear interest at a floating rate which is adjusted weekly as determined by
the bond remarketing agent (5.5% at September 30, 1996 and 5.85% at December 31,
1995). The second phase of the facility, which includes the purchase and
installation of additional processing equipment, is anticipated to be completed
by the end of 1998.
At September 30, 1996, the Company had $2.9 million in outstanding indebtedness
relating to IRBs issued in connection with the construction of its Auburn,
Indiana plant. The Auburn IRBs are collateralized by a letter of credit,
certain equipment and a mortgage on the Company's Auburn, Indiana plant. The
Auburn IRBs are payable in annual installments of $720,000 through September
2000 and bear interest at a floating rate which is adjusted weekly as determined
by the bond remarketing agent (3.89% at September 30, 1996 and 5.85% at December
31, 1995).
On January 16, 1996, the Company acquired all of the outstanding common stock of
Trylon for total cash consideration, including transaction costs, of
approximately $25 million. To finance the acquisition, the Company and its
lenders amended the Credit Agreement to provide, among other things, a $25
million term loan, which was repaid in May 1996 using a portion of the proceeds
from the sale of the Senior Notes and borrowings under the revolving credit
facility.
On May 6, 1996, the Company agreed to assume production of certain parts
previously manufactured at a non-acquired MascoTech facility and will make
payments to MascoTech equal to 5% of the revenues to be derived by the Company
during the first twelve months of production from each assumed purchase order
resourced to the Company. The Company will also acquire selected inventory,
tooling and production equipment used for such production at an estimated cost
of approximately $6 million. The purchased assets will be transferred to the
Company's existing facilities by the end of 1996.
On May 31, 1996, the Company purchased all of the outstanding common stock of
MSTI from MascoTech for an aggregate purchase price of approximately $79 million
(including payment of related fees and expenses). The aggregate consideration
paid by the Company consisted of (i) 785,000 shares of Common Stock, (ii) $55
million in cash (subject to working capital adjustments), and (iii) warrants to
purchase an aggregate of 200,000 shares of Common Stock at an exercise price of
$18.00 per share. In addition, the Company issued a 7% promissory note in favor
of MascoTech payable approximately one year following the acquisition in an
aggregate principal amount of $5 million, which is subject to reduction based on
the operating profits of the MSTI facilities for the 12 months following the
acquisition. Pursuant to the terms of the acquisition, the Company is required
to make additional payments to MascoTech if certain operating targets are
achieved by the MSTI facilities in the first three years following the
acquisition. If all such operating targets are met, the contingent payments and
amounts paid under the promissory note will not exceed $30 million.
The Company financed the cash portion of the purchase price of MSTI through the
issuance in two series of Senior Notes having an aggregate principal amount of
$65 million. The $40 million of Series A Senior Notes have a final maturity on
June 1, 2006 and require annual principal payments commencing on June 1, 2000
which continue every year thereafter until their final maturity. The $25
million of Series B Senior Notes have a final maturity on June 1, 2008
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<PAGE>
and require annual principal payments commencing on June 1, 2004 which continue
every year thereafter until their final maturity. The Senior Notes require the
Company to make semi-annual interest payments commencing December 1, 1996. Net
proceeds from the sale of the Senior Notes in excess of the amounts used to
finance the cash portion of the MSTI acquisition were used, together with
borrowings under the revolving credit facility, to repay in full the remaining
balance outstanding on the $25 million term loan incurred by the Company in
connection with the Trylon acquisition.
On June 20, 1996, the Company completed an offering of 2,000,000 shares of
Common Stock at an offering price of $24.50 per share. A portion of the net
proceeds from this Offering of approximately $46 million were used by the
Company to retire borrowings under its secured credit agreement. The remaining
proceeds will be used for other general corporate purposes that may include
repayment of other indebtedness, potential acquisitions or capital expenditures.
On July 24, 1996, the Company issued an additional 232,900 shares of Common
Stock pursuant to the underwriters' over-allotment option for net proceeds of
approximately $5 million.
During the nine months ended September 30, 1996, the Company generated $26.3
million of cash from operations which was partially used to fund capital
expenditures.
The Company has made substantial investments in manufacturing technology and
product design capability to support its products. Capital expenditures were
$9.9 million for the nine months ended September 30, 1996 and $18.8 million in
the comparable period of 1995. The Company currently has budgeted approximately
$3.7 million for capital expenditures in the remaining months of 1996 and $24.5
million for 1997, primarily for equipment and dedicated tooling purchases.
Capital expenditures in 1996 and 1997 are expected to be financed either with
cash generated from operations or borrowings under its Credit Agreement.
The Company believes the borrowing availability under its Credit Agreement,
together with funds generated by operations and the remaining net proceeds from
the Offering, should provide the Company with the liquidity and capital
resources to pursue its business strategy, with respect to working capital,
capital expenditures and other operating needs. To fund additional
acquisitions, the Company may have to arrange for additional financing. Under
present conditions, management does not believe access to funds will restrict
its ability to pursue its acquisition strategy.
EFFECTS OF INFLATION
Inflation generally affects the Company by increasing the interest expense of
floating rate indebtedness and by increasing the cost of labor, equipment and
raw materials. Management believes that inflation has impacted the Company's
business over the past 18 months because of rising labor costs and raw material
costs, principally steel. Certain of the Company's contracts with customers
provide that increases in the Company's cost of raw materials may be passed
through to the customer, subject to certain limitations.
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<PAGE>
PART II. OTHER INFORMATION
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
Item 1. Legal Proceedings:
None
Item 2. Change in Securities:
None
Item 3. Defaults Upon Senior Securities:
None
Item 4. Submission of Matters to a Vote of Security Holders:
None
Item 5. Other Information:
None
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits: Sequential
Page Number
-----------
10.1 Fourth Amended and Restated Credit Agreement
dated as of September 6, 1996 by and between R.J.
Tower Corporation and Comerica Bank. ---
11 Statements of Computation of Earnings Per Share For
the Three and Nine Months Ended September 30, 1996
and 1995. ---
(b) No Form 8-K's were filed during the quarter ended
September 30, 1996.
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<PAGE>
SIGNATURE
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, thereunto duly authorized.
TOWER AUTOMOTIVE, INC.
Date: October 31, 1996 By /s/ Anthony A. Barone
----------------------------------------
Anthony A. Barone
Vice President, Chief Financial Officer
(principal accounting and financial
officer)
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<PAGE>
EXHIBIT 10.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
R.J. TOWER CORPORATION
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF SEPTEMBER 6, 1996
COMERICA BANK, AS AGENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. REVOLVING CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1 Revolving Credit Commitment.. . . . . . . . . . . . . . . . . 17
2.2 Accrual of Interest and Maturity. . . . . . . . . . . . . . . 17
2.3 Prime-based Interest Payments.. . . . . . . . . . . . . . . . 17
2.4 Eurodollar-based Interest Payments. . . . . . . . . . . . . . 18
2.5 Interest Payments on Conversions. . . . . . . . . . . . . . . 18
2.6 Interest on Default.. . . . . . . . . . . . . . . . . . . . . 18
2.7 Requests for Advances and Requests for
Refundings and Conversions of Revolving Credit
Advances.. . . . . . . . . . . . . . . . . . . . . . . . . 18
2.8 Disbursement of Revolving Credit Advances.. . . . . . . . . . 20
2.9 Prime-based Advance in Absence of Election
or Upon Default. . . . . . . . . . . . . . . . . . . . . . 21
2.10 Prepayment. . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.11 Revolving Credit Commitment Fee.. . . . . . . . . . . . . . . 22
2.12 Reduction of Indebtedness; Revolving Credit
Aggregate Commitment.. . . . . . . . . . . . . . . . . . . 22
2.13 Optional Reduction or Termination of
Revolving Credit Aggregate Commitment. . . . . . . . . . . 22
2.14 Revolving Credit as Renewal . . . . . . . . . . . . . . . . . 23
2.15 Use of Revolving Credit Proceeds. . . . . . . . . . . . . . . 23
3. LETTERS OF CREDIT.. . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1 Letters of Credit.. . . . . . . . . . . . . . . . . . . . . . 23
3.2 Conditions to Issuance. . . . . . . . . . . . . . . . . . . . 24
3.3 Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.4 Letter of Credit Fees.. . . . . . . . . . . . . . . . . . . . 26
3.5 Issuance Fees.. . . . . . . . . . . . . . . . . . . . . . . . 27
3.6 Draws and Demands for Payment Under Letters
of Credit. . . . . . . . . . . . . . . . . . . . . . . . . 27
3.7 Obligations Irrevocable.. . . . . . . . . . . . . . . . . . . 29
3.8 Risk Under Letters of Credit. . . . . . . . . . . . . . . . . 30
3.9 Indemnification.. . . . . . . . . . . . . . . . . . . . . . . 31
3.10 Right of Reimbursement. . . . . . . . . . . . . . . . . . . . 32
3.11 Existing Letters of Credit. . . . . . . . . . . . . . . . . . 32
3.12 Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4. SWING LINE CREDIT.. . . . . . . . . . . . . . . . . . . . . . 33
4.1 Swing Line Advances.. . . . . . . . . . . . . . . . . . . . . 33
4.2 Accrual of Interest.. . . . . . . . . . . . . . . . . . . . . 33
4.3 Prime-based Interest Payments.. . . . . . . . . . . . . . . . 33
4.4 Quoted Rate Advance Interest Payments.. . . . . . . . . . . . 34
4.5 Interest on Default.. . . . . . . . . . . . . . . . . . . . . 34
4.6 Requests for Swing Line Advances. . . . . . . . . . . . . . . 34
4.7 Disbursement of Swing Line Advances.. . . . . . . . . . . . . 35
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4.8 Prepayment. . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.9 Refunding of or Participation Interest in
Swing Line Advances. . . . . . . . . . . . . . . . . . . . 36
5. [RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6. CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.1 Execution of Loan Documents.. . . . . . . . . . . . . . . . . 37
6.2 Corporate Authority.. . . . . . . . . . . . . . . . . . . . . 37
6.3 Reaffirmation of Loan Documents . . . . . . . . . . . . . . . 38
6.4 Licenses, Permits, Etc. . . . . . . . . . . . . . . . . . . . 38
6.5 Representations and Warranties. . . . . . . . . . . . . . . . 38
6.6 Compliance with Certain Documents and
Agreements.. . . . . . . . . . . . . . . . . . . . . . . . 38
6.8 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.9 Company's Certificate.. . . . . . . . . . . . . . . . . . . . 38
6.10 Payment of Fees.. . . . . . . . . . . . . . . . . . . . . . . 39
6.11 Other Documents and Instruments.. . . . . . . . . . . . . . . 39
6.12 Continuing Conditions.. . . . . . . . . . . . . . . . . . . . 39
7. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . 39
7.1 Due Authorization--Company. . . . . . . . . . . . . . . . . . 39
7.2 Due Authorization--Guarantors . . . . . . . . . . . . . . . . 40
7.3 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . 40
7.4 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . 40
7.5 Encumbrances. . . . . . . . . . . . . . . . . . . . . . . . . 40
7.6 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.7 Financial Statements. . . . . . . . . . . . . . . . . . . . . 40
7.8 Financial Projections . . . . . . . . . . . . . . . . . . . . 41
7.9 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.10 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . 41
7.11 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . 41
7.12 No Investment Company or Margin Stock . . . . . . . . . . . . 42
7.13 Good Title--Company . . . . . . . . . . . . . . . . . . . . . 43
7.14 Good Title--Guarantors. . . . . . . . . . . . . . . . . . . . 43
7.15 Convertible Notes . . . . . . . . . . . . . . . . . . . . . . 43
8. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 43
8.1 Reporting Requirements. . . . . . . . . . . . . . . . . . . . 43
8.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.4 Inspections . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.6 Government Approvals. . . . . . . . . . . . . . . . . . . . . 45
8.7 [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.8 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . 45
8.9 ERISA Notices . . . . . . . . . . . . . . . . . . . . . . . . 45
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8.10 Covenant Compliance Reports . . . . . . . . . . . . . . . . . 46
8.11 Maintain Consolidated Net Worth . . . . . . . . . . . . . . . 46
8.12 Maintain Maximum Leverage Ratio . . . . . . . . . . . . . . . 46
8.13 Maintain Interest Coverage Ratio. . . . . . . . . . . . . . . 46
8.14 Maintain Cashflow Leverage Ratio. . . . . . . . . . . . . . . 46
8.15 Environmental Compliance. . . . . . . . . . . . . . . . . . . 47
8.16 Subsidiaries; Guaranties. . . . . . . . . . . . . . . . . . . 48
8.17 Amendment of Senior Debt Documents. . . . . . . . . . . . . . 49
9. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.1 Capital Structure and Redemptions . . . . . . . . . . . . . . 49
9.2 Mergers or Dispositions . . . . . . . . . . . . . . . . . . . 49
9.3 Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.4 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . 50
9.5 Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . 51
9.6 Investments . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.8 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . 52
9.9 Business Purposes . . . . . . . . . . . . . . . . . . . . . . 52
9.10 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.11 No Further Negative Pledges . . . . . . . . . . . . . . . . . 52
9.12 Transactions with Affiliates. . . . . . . . . . . . . . . . . 52
10. DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.1 Events of Default.. . . . . . . . . . . . . . . . . . . . . . 53
10.2 Exercise of Remedies. . . . . . . . . . . . . . . . . . . . . 55
10.3 Rights Cumulative.. . . . . . . . . . . . . . . . . . . . . . 55
10.4 Waiver by Company of Certain Laws.. . . . . . . . . . . . . . 56
10.5 Waiver of Defaults. . . . . . . . . . . . . . . . . . . . . . 56
10.6 Deposits and Accounts.. . . . . . . . . . . . . . . . . . . . 56
11. PAYMENTS, RECOVERIES AND COLLECTIONS. . . . . . . . . . . . . . . . . 57
11.1 Payment Procedure.. . . . . . . . . . . . . . . . . . . . . . 57
11.2 Application of Proceeds.. . . . . . . . . . . . . . . . . . . 58
11.3 Pro-rata Recovery.. . . . . . . . . . . . . . . . . . . . . . 59
11.4 Deposits and Accounts.. . . . . . . . . . . . . . . . . . . . 59
12. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS; MARGIN ADJUSTMENTS. 59
12.1 Reimbursement of Prepayment Costs.. . . . . . . . . . . . . . 59
12.2 Agent's Eurodollar Lending Office.. . . . . . . . . . . . . . 60
12.3 Circumstances Affecting Eurodollar-based
Rate Availability. . . . . . . . . . . . . . . . . . . . . 60
12.4 Laws Affecting Eurodollar-based Rate
Availability.. . . . . . . . . . . . . . . . . . . . . . . 60
12.5 Increased Costs.. . . . . . . . . . . . . . . . . . . . . . . 61
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12.6 [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.7 Other Increased Costs.. . . . . . . . . . . . . . . . . . . . 62
12.8 Margin Adjustments. . . . . . . . . . . . . . . . . . . . . . 63
12.9 HLT Determination . . . . . . . . . . . . . . . . . . . . . . 63
13. AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
13.1 Appointment of Agent. . . . . . . . . . . . . . . . . . . . . 64
13.2 Deposit Account with Agent. . . . . . . . . . . . . . . . . . 65
13.3 Scope of Agent's Duties.. . . . . . . . . . . . . . . . . . . 65
13.4 Successor Agent.. . . . . . . . . . . . . . . . . . . . . . . 65
13.5 Loans by Agent. . . . . . . . . . . . . . . . . . . . . . . . 66
13.6 Credit Decisions. . . . . . . . . . . . . . . . . . . . . . . 66
13.7 Agent's Fees. . . . . . . . . . . . . . . . . . . . . . . . . 66
13.8 Authority of Agent to Enforce Notes, This
Agreement and other Loan Documents.. . . . . . . . . . . . 66
13.9 Indemnification.. . . . . . . . . . . . . . . . . . . . . . . 67
13.10 Knowledge of Default. . . . . . . . . . . . . . . . . . . . . 67
13.11 Agent's Authorization; Action by Banks. . . . . . . . . . . . 68
13.12 Enforcement Actions by the Agent. . . . . . . . . . . . . . . 68
14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 68
14.1 Accounting Principles.. . . . . . . . . . . . . . . . . . . . 68
14.2 Consent to Jurisdiction.. . . . . . . . . . . . . . . . . . . 68
14.3 Law of Michigan.. . . . . . . . . . . . . . . . . . . . . . . 69
14.4 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 69
14.5 Closing Costs and Other Costs.. . . . . . . . . . . . . . . . 69
14.6 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
14.7 Further Action. . . . . . . . . . . . . . . . . . . . . . . . 70
14.8 Successors and Assigns; Participations;
Assignments. . . . . . . . . . . . . . . . . . . . . . . . 71
14.9 Indulgence. . . . . . . . . . . . . . . . . . . . . . . . . . 74
14.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 74
14.11 Amendment and Waiver. . . . . . . . . . . . . . . . . . . . . 74
14.12 Taxes and Fees. . . . . . . . . . . . . . . . . . . . . . . . 75
14.13 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 75
14.14 Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . 76
14.15 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . 76
14.16 Complete Agreement; Conflicts . . . . . . . . . . . . . . . . 77
14.17 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 77
14.18 Table of Contents and Headings. . . . . . . . . . . . . . . . 77
14.19 Construction of Certain Provisions. . . . . . . . . . . . . . 77
14.20 Independence of Covenants . . . . . . . . . . . . . . . . . . 77
14.21 Reliance on and Survival of Various
Provisions . . . . . . . . . . . . . . . . . . . . . . . . 77
14.22 Effective Upon Execution. . . . . . . . . . . . . . . . . . . 78
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EXHIBITS
- --------
A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE. . . . . . . . .
B FORM OF REVOLVING CREDIT NOTE . . . . . . . . . . . . . . . .
C FORM OF NOTICE OF LETTERS OF CREDIT . . . . . . . . . . . . .
D FORM OF REQUEST FOR SWING LINE ADVANCE. . . . . . . . . . . .
E FORM OF SWING LINE NOTE . . . . . . . . . . . . . . . . . . .
F FORM OF SWING LINE PARTICIPATION CERTIFICATE. . . . . . . . .
G [RESERVED]. . . . . . . . . . . . . . . . . . . . . . . . . .
H [RESERVED]. . . . . . . . . . . . . . . . . . . . . . . . . .
I PERCENTAGES . . . . . . . . . . . . . . . . . . . . . . . . .
J PENSION PLANS . . . . . . . . . . . . . . . . . . . . . . . .
K FORM OF COVENANT COMPLIANCE AND INTEREST RATE
ADJUSTMENT REPORT . . . . . . . . . . . . . . . . . . . . . .
L FORM OF ASSIGNMENT AGREEMENT. . . . . . . . . . . . . . . . .
M-1 COPY OF COMPANY GUARANTY. . . . . . . . . . . . . . . . . . .
M-2 COPY OF LETTER OF CREDIT GUARANTY (INDIANA) PLUS
TOWER (DELAWARE) JOINDER AGREEMENT. . . . . . . . . . . . . .
M-3 COPY OF LETTER OF CREDIT GUARANTY (KENTUCKY) PLUS
TOWER (DELAWARE) JOINDER AGREEMENT. . . . . . . . . . . . . .
N COPY OF TOWER PLEDGE. . . . . . . . . . . . . . . . . . . . .
O FORM OF REAFFIRMATION OF LOAN DOCUMENTS
SCHEDULES
- ---------
1 Pricing Matrix. . . . . . . . . . . . . . . . . . . . . . . .
2 Existing Letters of Credit. . . . . . . . . . . . . . . . . .
7.4 Exceptions to Litigation Covenant . . . . . . . . . . . . . .
7.11 Exceptions Compliance with Laws Covenant. . . . . . . . . . .
9.4 Additional Permitted Indebtedness . . . . . . . . . . . . . .
9.6(d) Tower Automotive, Inc. Suggested Investment
Policy . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.7 Additional Permitted Encumbrances . . . . . . . . . . . . . .
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<PAGE>
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
THIS FOURTH AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement") is made as
of the 6th day of September, 1996, by and among the Banks signatory hereto
(individually, a "Bank", and collectively the "Banks"), Comerica Bank, as agent
for the Banks (in such capacity, "Agent"), and R.J. Tower Corporation, a
Michigan corporation ("Company").
RECITALS:
A. Company, Agent and the Banks entered into a Third Amended and
Restated Credit Agreement dated as of January 16, 1996, as amended (the "Prior
Credit Agreement").
B. Company, Agent and the Banks desire to amend and restate the Prior
Credit Agreement in its entirety.
NOW, THEREFORE, COMPANY, AGENT AND BANKS AGREE that the Prior Credit
Agreement is amended and restated in its entirety as follows:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Account(s)" shall mean any account or account receivable as defined under
the UCC, including without limitation, with respect to any Person, any right of
such Person to payment for goods sold or leased or for services rendered.
"Account Debtor" shall mean the party who is obligated on or under any
Account.
"Account Party(ies)" shall mean, with respect to any Letter of Credit, the
account party or parties (which shall be Company, individually, and/or a
Subsidiary (jointly and severally with Company)) named in an application to the
Agent for the issuance of such Letter of Credit.
"Acquisition Agreement" shall mean that certain Stock Purchase Agreement by
and among MascoTech, Inc., a Delaware corporation, Parent and Company dated
May 31, 1996.
"Acquisition Note" shall mean the promissory note dated May 31, 1996 by
Company payable to MascoTech, Inc. in the original principal amount of
$5,000,000 bearing interest at a rate of 7% per annum.
1
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"Advance(s)" shall mean Revolving Credit Advance(s), Swing Line Advance(s)
and any advance in respect of a Letter of Credit (including without limitation
the unreimbursed amount of any draws under any Letters of Credit).
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and executive officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation for the purposes of this definition if such Person possesses,
directly or indirectly, the power (i) to vote 10% or more of the securities
having ordinary voting power for the election of directors of such corporation
or (ii) to direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" shall mean Comerica Bank, in its capacity as agent hereunder, or
any successor agent appointed in accordance with Section 13.4 hereof.
"Agent's Fees" shall mean those agency, letter of credit issuance and other
fees and expenses required to be paid by Company to Agent under Sections 3.5 and
13.7 hereof.
"Alternate Base Rate" shall mean, for any day, an interest rate per annum
equal to the Federal Funds Effective Rate in effect on such day, plus two
percent (2%).
"Applicable Commitment Fee Percentage" shall mean, as of any date of
determination thereof, the applicable percentage used to calculate the
Commitment Fees due and payable hereunder, determined (based upon the Leverage
Ratio) by reference to the appropriate columns in the pricing matrix attached to
this Agreement as SCHEDULE 1.
"Applicable L/C Fee Percentage" shall mean, as of any date of determination
thereof, the applicable percentage used to calculate the Letter of Credit Fees
due and payable hereunder, determined (based upon the Leverage Ratio) by
reference to the appropriate columns in the pricing matrix attached to this
Agreement as SCHEDULE 1.
"Applicable Interest Rate" shall mean (i) in respect of a Revolving Credit
Advance, the Eurodollar-based Rate or the Prime-based Rate applicable to such
Advance (in the case of a Eurodollar-based Advance, for the relevant Interest
Period), and (ii) in respect of a Swing Line Advance, the Prime-based Rate or
the Quoted Rate applicable to such Advance for the relevant Interest Period, in
either case as selected by Company from time to time subject to the terms and
conditions of this Agreement.
2
<PAGE>
"Bond Letters of Credit" shall mean (a) the $25,493,150.68 Standby Letter
of Credit issued by Agent for the account of Tower (Kentucky) in connection with
the Kentucky Bonds, (b) the $20,394,520.55 Series B Standby Letter of Credit
issued by Agent for the account of Tower (Kentucky) in connection with the
Kentucky Bonds; and (c) the $6,157,676.72 Standby Letter of Credit issued by
Agent for the account of Tower (Indiana) in connection with the Indiana Bonds.
"Bond Reimbursement Agreements" shall mean the Reimbursement Agreement
(Indiana) and the Reimbursement Agreements (Kentucky).
"Business Day" shall mean any day on which commercial banks are open for
domestic and international business in Detroit, London and New York.
"Capital Expenditure" shall mean, without duplication, any payment made
directly or indirectly for the purpose of acquiring or constructing fixed
assets, real property or equipment which in accordance with GAAP would be added
as a debit to the fixed asset account of the Person making such expenditure,
including, without limitation, amounts paid or payable under any conditional
sale or other title retention agreement or under any lease or other periodic
payment arrangement which is of such a nature that payment obligations of the
lessee or obligor thereunder would be required by generally accepted accounting
principles to be capitalized and shown as liabilities on the balance sheet of
such lessee or obligor.
"Capital Lease" of any Person shall mean any lease of any property (whether
real, personal or mixed) by that Person as lessee which, in conformity with
GAAP, is, or is required to be accounted for as a capital lease on the balance
sheet of that Person, together with any renewals of such leases (or entry into
new leases) on substantially similar terms.
"Cashflow Leverage Ratio" shall mean, as of any date of determination, a
ratio, the numerator of which is Funded Debt as of such date and the denominator
of which is Consolidated EBITDA for the four quarter period ending on such date.
"Collateral Agent" shall mean Comerica Bank, acting in its capacity as
Collateral Agent for the Lenders under the Intercreditor Agreement.
"Company" shall mean R.J. Tower Corporation, a Michigan corporation.
"Company Guaranty" shall mean the Second Amended and Restated Guaranty, a
copy of which is attached hereto as Exhibit M-1, dated as of May 30, 1996 hereof
by Edgewood, Tower (Indiana), Tower (Kentucky), Kalamazoo, Tower (Delaware) and
Trylon and any joinder
3
<PAGE>
agreement executed after the date hereof by each Person which becomes a
Subsidiary after the date hereof guarantying all present and future obligations
of Company to Agent and the Banks including, without limitation, the
Indebtedness, as amended from time to time.
"Consolidated" or "Consolidating" shall mean, when used with reference to
any financial term in this Agreement, the aggregate for two or more Persons of
the amounts signified by such term for all such Persons determined on a
consolidated basis in accordance with GAAP. Unless otherwise specified herein,
references to Consolidated financial statements or data of Parent includes
consolidation with its Subsidiaries in accordance with GAAP.
"Consolidated EBITA" shall mean for any period of determination,
Consolidated Net Income for such period, plus the aggregate amounts deducted in
determining Consolidated Net Income in respect of (a) income taxes for such
period, (b) interest expense for such period, and (c) amortization expense for
such period in each case determined on a Consolidated basis in accordance with
GAAP.
"Consolidated EBITDA" shall mean for any period of determination,
Consolidated Net Income for such period, plus the aggregate amounts deducted in
determining Consolidated Net Income in respect of (a) income taxes for such
period, (b) interest expense for such period, and (c) depreciation and
amortization expense for such period, in each case determined on a Consolidated
basis in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period of determination, the
net income (but not loss) of Company and its consolidated Subsidiaries for such
period determined in accordance with GAAP including any extraordinary gains
during such period; PROVIDED, however, for purposes of determining Consolidated
Net Income for any period, if under GAAP any Subsidiary is treated as a
consolidated Subsidiary for part of such period, such Subsidiary shall be deemed
to be a consolidated Subsidiary for such entire period.
"Consolidated Net Worth" shall mean, as of any date of determination, the
net worth of Company and its consolidated Subsidiaries as determined in
accordance with GAAP plus, until the maturity date of the Convertible Notes, the
outstanding principal amount of the Convertible Notes as of such date. For
purposes of determining Consolidated Net Worth, the Convertible Notes shall be
treated as equity of Company and not as liabilities of Company.
"Convertible Notes" shall mean those certain $5,000,000 Convertible Notes
dated as of June 29, 1994 issued by Company in favor of the former shareholders
of Edgewood and Ann Arbor Assembly.
4
<PAGE>
"Covenant Compliance and Interest Rate Adjustment Report" shall mean the
report to be furnished by Company to the Agent, in the form of attached Exhibit
K and certified by the chief financial officer of Company and pursuant to
Section 8.10, hereof (or in such officer's absence, a responsible senior
officer), in which report Company shall set forth, among other things, detailed
calculations and the resultant ratios or financial tests with respect to the
financial covenants contained in Sections 8.11 through 8.14 of this Agreement.
"Default" shall mean any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default under this
Agreement.
"Dollars" and the sign "$" shall mean lawful money of the United States of
America.
"Edgewood" shall mean Edgewood Manufacturing Corp., a Delaware corporation.
"Equity Transactions" shall mean any sale of any shares of the capital
stock of Parent or any warrants, options or other equivalents of the capital
stock of Parent.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, or any successor act or code and the regulations in effect from time to
time thereunder.
"Eurodollar-based Advance" shall mean a Revolving Credit Advance which
bears interest at the Eurodollar-based Rate.
"Eurodollar-based Rate" shall mean a per annum interest rate which is the
equal to the sum of the Margin PLUS the quotient of:
(a) the per annum interest rate at which Bank's Eurodollar Lending Office
offers deposits to prime banks in the eurodollar market in an amount
comparable to the relevant Eurodollar-based Advance and for a period
equal to the relevant Interest Period at approximately 11:00 A.M.
Detroit time two (2) Business Days prior to the first day of such
Interest Period; divided by
(b) a percentage equal to 100% minus the maximum rate on such date at
which Bank is required to maintain reserves on "Euro-currency
Liabilities" as defined in and pursuant to Regulation D of the Board
of Governors of the Federal Reserve System or, if such regulation or
definition is modified, and as long as Bank is required to maintain
reserves against a category of liabilities which includes eurodollar
deposits or includes a category of assets which includes eurodollar
loans, the rate at which such reserves are required to be maintained
on such category.
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"Eurodollar-Interest Period" shall mean the Interest Period applicable to a
Eurodollar-based Advance.
"Eurodollar Lending Office" shall mean, (a) with respect to the Agent,
Agent's office located at Grand Cayman, British West Indies or such other branch
or branches of Agent, domestic or foreign, as it may hereafter designate as a
Eurodollar Lending Office by notice to Company and the Banks, and (b) as to each
of the Banks, its office, branch or affiliate located at its address set forth
on the signature pages hereof (or identified thereon as a Eurodollar Lending
Office), or at such other office, branch or affiliate of such Bank as it may
hereafter designate as its Eurodollar Lending Office by notice to Company and
Agent.
"Event of Default" shall mean each of the Events of Default specified in
Section 10.1 hereof.
"Existing Letters of Credit" shall have the meaning set forth in the
definition of "Letter(s) of Credit".
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it, all as conclusively determined by the Agent, such sum to be
rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.
"Fees" shall mean the Revolving Credit Commitment Fee, the Letter of Credit
Fees, the Agent's Fees and the other fees and charges payable by Company to the
Banks or Agent hereunder.
"Financial Statements" shall mean all those balance sheets, income
statements and other financial data (whether of the Company or otherwise) which
have been furnished to the Agent or the Banks for the purposes of, or in
connection with, this Agreement and the transactions contemplated hereby.
"Funded Debt" shall mean as of any date of determination, the sum of (a)
all indebtedness of Company and its consolidated Subsidiaries for borrowed money
or for the deferred purchase price of property or services as of such date
(other than trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices) or which is evidenced by a note,
bond, debenture or similar instrument, (b) all obligations of Company
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and its consolidated Subsidiaries under Capital Leases as of such date, (c)
without duplication, all obligations of Company and its consolidated
Subsidiaries in respect of Letters of Credit, acceptances or similar obligations
issued or created for the account of Company or any of its consolidated
Subsidiaries as of such date, (d) all liabilities secured by any lien on any
property owned by Company and its consolidated Subsidiaries as of such date even
though Company or its Subsidiaries, as applicable, have not assumed or otherwise
become liable for the payment thereof, and (e) without duplication, all
guarantee obligations of Company and its consolidated Subsidiaries as of such
date; LESS an amount equal to the undisbursed proceeds of the Kentucky Bonds
which as of such date have not been requisitioned by Tower (Kentucky) and LESS
the indebtedness of Company under the Convertible Notes.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, as in effect from time to time, consistently applied.
"Guaranties" shall mean the Company Guaranty, the Letter of Credit Guaranty
and the Letter of Credit Guaranty (Kentucky), collectively.
"Guarantors" shall mean Edgewood, Tower (Indiana), Tower (Kentucky),
Trylon, Tower (Delaware) and Kalamazoo and each other Person who shall become a
Subsidiary of Company after the date hereof and shall have delivered to Agent on
behalf of the Banks a guaranty of the Indebtedness in the form of the Company
Guaranty (or a joinder agreement).
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances, rules,
regulations, orders, decrees and directives issued by any federal, state,
provincial, local, foreign or other governmental or quasi-governmental authority
or body (or any agency, instrumentality or political subdivision thereof)
pertaining to Hazardous Material on or about any facilities owned, leased or
operated by Company or any of its Subsidiaries, or any portion thereof
including, without limitation, those relating to soil, surface, subsurface
ground water conditions and the condition of the ambient air; and any state and
local laws and regulations pertaining to Hazardous Material and/or asbestos; any
so-called "superfund" or "superlien" law; and any other federal, state,
provincial, foreign or local statute, law, ordinance, code, rule, regulation,
order or decree regulating, relating to, or imposing liability or standards of
conduct concerning, any hazardous, toxic or dangerous waste, substance or
material, as now or at any time hereafter in effect.
"Hedging Transaction" means each interest rate swap transaction, basis swap
transaction, forward rate transaction,
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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.
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement and not to any particular paragraph or provision of this Agreement.
"HLT Determination" shall mean any determination by the Agent or by the
Majority Banks, or by applicable federal or state regulatory authorities
(including without limitation any central bank or other governmental body having
jurisdiction over any of the Banks) that the Indebtedness (or any specific loan
facility or portion thereof pursuant to this Agreement) would be classified as a
"highly-leveraged transaction" or an "HLT" under applicable federal or state
law, regulations or guidelines in effect from time to time, provided that (a),
with any determination of HLT status by Agent or the Majority Banks, Agent shall
have given Company not less than thirty (30) days prior written notice thereof,
accompanied by a certificate setting forth the basis for such determination
(which shall be presumed correct absent manifest error) and (b) with respect to
any determination of HLT status by a federal or state regulatory authority,
Agent shall have given written notice thereof to Company, accompanied by a copy
of such determination (if in writing).
"Indebtedness" shall mean without duplication all indebtedness and
liabilities (including without limitation interest, fees and other charges)
arising under this Agreement or any of the Loan Documents, whether direct or
indirect, absolute or contingent, of Company to any of the Banks or to the
Agent, in any manner and at any time, whether evidenced by the Notes or arising
under any of the other Loan Documents, due or hereafter to become due, now owing
or that may be hereafter be incurred by Company to, or acquired by, any of the
Banks or by Agent, and any judgments that may hereafter be rendered on such
indebtedness or any part thereof, with interest according to the rates and terms
specified, or as provided by law, and any and all consolidation, amendments,
renewals, replacements, substitutions or extensions of any of the foregoing.
"Indiana Bonds" shall mean the City of Auburn, Indiana $7,200,000
Floating/Fixed Rate Economic Development Revenue Bonds, Series 1988 (R.J. Tower
Corporation (Indiana) Project).
"Indiana Bond Mortgage" shall mean the Mortgage, Security Agreement and
Fixture Financing Statement dated as of June 29, 1993 by and among Tower
(Indiana), INB National Bank, as Trustee, and Comerica Bank, as the same may be
amended or modified from time to
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time.
"Intercreditor Agreement" shall mean that certain Intercreditor and
Collateral Agency Agreement dated as of May 31, 1996 as the same may be amended
or otherwise modified from time to time, by and among Company, the Collateral
Agent and the Lenders.
"Interest Coverage Ratio" shall mean as of any date of determination a
ratio the numerator of which is Consolidated EBITA for the four preceding fiscal
quarters ending on such date of determination and the denominator of which is
Projected Interest Expense.
"Interest Period" shall mean (i) with respect to a Eurodollar-based
Advance, one (1), two (2), three (3), six (6) or nine (9) months as selected by
Company pursuant to Section 2.7 or 5.5 hereof; provided, however, that any
Interest Period which commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month and (ii) with respect to a Swing Line
Advance, a period of one (1) to thirty (30) days agreed to in advance by Company
and the Swing Line Bank as selected by Company pursuant to Section 4.6 hereof.
Each Interest Period which would otherwise end on a day which is not a Business
Day shall end on the next succeeding Business Day or, if such next succeeding
Business Day falls in the next succeeding calendar month, on the next preceding
Business Day. No Interest Period which would end after the Revolving Credit
Maturity Date shall be permitted with respect to any Advance.
"Interest Rate Protection Agreement" means any interest rate swap, cap,
floor, collar, forward rate agreement foreign currency 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 Bank or an Affiliate of a Bank.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder.
"Inventory" shall have the meaning assigned to it in the UCC on the date of
this Agreement.
"Issuing Office" shall mean Agent's office located at One Detroit Center,
500 Woodward Avenue, Detroit, Michigan 48226 or such other office as Agent shall
designate as its Issuing Office.
"Kalamazoo" shall mean Kalamazoo Stamping and Die Company, a Michigan
corporation.
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"Kentucky Bonds" shall mean the City of Bardstown, Kentucky Economic
Development Revenue Bonds, Series 1994 and Series 1995 (R. J. Tower Corporation
Project) issued to finance the Kentucky Project which are supported by letters
of credit issued by Agent.
"Kentucky Project" shall mean the construction and equipping of an
approximately 240,000 sq. ft. plant located in Bardstown, Kentucky.
"Lenders" shall mean each of the Banks and each of the Senior Note
Purchasers, and their respective successors and assigns.
"Letter(s) of Credit" shall mean any standby or documentary letters of
credit issued by Agent at the request of or for the account of an Account Party
pursuant to Article 3 hereof and those existing letters of credit issued under
the Prior Credit Agreement, as identified on SCHEDULE 2 ("Existing Letters of
Credit") hereto and the Bond Letters of Credit.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Agent of
an Account Party or Account Parties requesting Agent to issue such Letter of
Credit, as amended from time to time.
"Letter of Credit Fees" shall mean the fees payable to Agent for the
accounts of the Banks in connection with Letters of Credit pursuant to Section
3.4 hereof.
"Letter of Credit Guaranty" shall mean the Amended and Restated Guaranty
dated as of January 16, 1996 by Company, Tower (Kentucky), Edgewood, Trylon and
Kalamazoo and the Joinder Agreement dated as of May 30, 1996 by Tower
(Delaware), copies of which are attached hereto as Exhibit M-2, and any joinder
agreement executed after the date hereof by each Person which becomes a
Subsidiary after the date hereof guarantying all indebtedness and liabilities of
Tower (Indiana) to Agent under the Reimbursement Agreement (Indiana).
"Letter of Credit Guaranty (Kentucky)" shall mean the Amended and Restated
Guaranty dated as of January 16, 1996 by Company, Edgewood, Tower (Indiana),
Trylon and Kalamazoo and the Joinder Agreement Dated as of May 30, 1996 by Tower
(Delaware), copies of which are attached hereto as Exhibit M-3, and any joinder
agreement executed after the date hereof by each Person which becomes a
Subsidiary after the date hereof guarantying all indebtedness and liabilities of
Tower (Kentucky) to Agent under the Reimbursement Agreements (Kentucky).
"Letter of Credit Maximum Amount" shall mean as of any date of
determination the lesser of: (a) Ten Million Dollars ($10,000,000); or (b) the
Revolving Credit Aggregate Commitment as of such date,
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minus the aggregate principal amount of Advances outstanding as of such date
under the Revolving Credit Notes.
"Letter of Credit Obligation(s)" shall mean the obligation of an Account
Party under each Letter of Credit Agreement to reimburse the Agent for each
payment made by the Agent under the Letter of Credit issued pursuant to such
Letter of Credit Agreement, together with all other sums, fees, charges and
amounts which may be owing to the Agent under such Letter of Credit Agreement.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Agent in its capacity hereunder as issuer of a Letter of Credit as a
result of a draft or other demand for payment under any Letter of Credit.
"Leverage Ratio" shall mean, as of any date of determination, a ratio, the
numerator of which is Funded Debt as of such date and the denominator of which
is Consolidated EBITDA for the four quarter period ending on such date less Five
Million Dollars ($5,000,000).
"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
Letter of Credit Agreements, the Letters of Credit, the Bond Letters of Credit,
the Bond Reimbursement Agreements, the Guaranties, the Tower Pledge, the Indiana
Bond Mortgage and any other documents, certificates, instruments or agreements
executed pursuant to or in connection with any such document or this Agreement,
as such documents may be amended from time to time.
"Majority Banks" shall mean at any time Banks holding not less than
sixty-six and two-thirds percent (66 2/3%) of the sum of the aggregate principal
amount of the Indebtedness then outstanding under the Revolving Credit Notes
(or, if no Indebtedness is then outstanding, Banks holding not less than
sixty-six and two-thirds percent (66 2/3%) of the Percentages).
"Margin" shall mean, as of any date of determination thereof, the
applicable interest rate margin determined (based upon the Leverage Ratio) by
reference to the appropriate columns in the pricing matrix attached to this
Agreement as SCHEDULE 1.
"MascoTech Acquisition" shall mean the acquisition by Company of all of the
issued and outstanding stock of MascoTech Stamping Technologies, Inc., now known
as Tower Automotive Delaware, Inc., a Delaware corporation, pursuant to the
Acquisition Agreement.
"Maximum Leverage Ratio" shall mean as of any date of determination, a
ratio the numerator of which is Funded Debt as of such date of determination and
the denominator of which is the sum of Funded Debt as of such date and
Consolidated Net Worth as of such date.
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"Net Proceeds from Equity Transactions" shall mean for any Equity
Transaction the amount of cash proceeds received by Company from such Equity
Transaction.
"Notes" shall mean the Revolving Credit Notes, and the Swing Line Note and
"Note" shall mean any of them.
"Parent" shall mean Tower Automotive, Inc. (formerly known as Tower Holding
Corp.), a Delaware corporation.
"Parent Letter Agreement" shall mean that certain letter agreement dated
May 31, 1996 and addressed to the Banks pursuant to which Parent agrees to
downstream to Company 100% of the net cash proceeds received from the Secondary
Offering.
"Pension Plan(s)" shall mean all employee pension benefit plans of Company
or its Subsidiaries, as defined in Section 3(2) of ERISA.
"Percentage" shall mean, with respect to any Bank, its percentage share, as
set forth on Exhibit I, hereto, of the Revolving Credit and its risk
participation in Letters of Credit as such Exhibit may be revised from time to
time.
"Permitted Encumbrances" shall mean with respect to any Person:
(a) the liens and encumbrances granted under or established
by this Agreement or the other Loan Documents for the equal and ratable
benefit of the Lenders;
(b) liens for taxes not yet delinquent or which are being
contested in good faith by appropriate proceedings diligently pursued,
provided that provision for the payment of all such taxes has been made on
the books of such Person as may be required by GAAP;
(c) mechanics', materialmen's, banker's, carriers',
warehousemen's and similar liens and encumbrances arising in the ordinary
course of business and securing obligations of such Person that are not
overdue for a period of more than 60 days or are being contested in good
faith by appropriate proceedings diligently pursued, provided that in the
case of any such contest (i) any proceedings commenced for the enforcement
of such liens and encumbrances shall have been duly suspended; and (ii)
such provision for the payment of such liens and encumbrances has been made
on the books of such Person as may be required by GAAP;
(d) liens arising in connection with worker's compensation,
unemployment insurance, old age pensions and social security benefits and
similar statutory obligations which are not overdue or are being contested
in good faith by appropriate
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proceedings diligently pursued, provided that in the case of any such contest
(i) any proceedings commenced for the enforcement of such liens shall have been
duly suspended; and (ii) such provision for the payment of such liens has been
made on the books of such Person as may be required by GAAP;
(e)(i) liens incurred in the ordinary course of business to
secure the performance of statutory obligations arising in connection with
progress payments or advance payments due under contracts with the United
States government or any agency thereof entered into in the ordinary course
of business and (ii) liens incurred or deposits made in the ordinary course
of business to secure the performance of statutory obligations, bids,
leases, fee and expense arrangements with trustees and fiscal agents and
other similar obligations (exclusive of obligations incurred in connection
with the borrowing of money, any lease-purchase arrangements or the payment
of the deferred purchase price of property), provided that full provision
for the payment of all such obligations set forth in clauses (i) and (ii)
has been made on the books of such Person as may be required by GAAP; and
(f) minor survey exceptions or minor 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 materially interfere with the business of such
Person, including, without limitation the matters disclosed in the surveys
and title policies relating to the Auburn, Indiana, property accepted by
Banks as of the date of this Agreement.
"Permitted Guaranties" shall mean the guaranty executed and delivered by
the Company's Subsidiaries as of May 31, 1996 (and those guaranties delivered by
Subsidiaries which become guarantors subsequent to the date hereof) in favor of
the Senior Note Purchasers, as security for the Senior Debt held by such
Lenders, as such guaranties may be amended from time to time.
"Person" shall mean an individual, corporation, partnership, trust,
incorporated or unincorporated organization, joint venture, joint stock company,
or a government or any agency or political subdivision thereof or other entity
of any kind.
"Pledge Agreement" shall mean the Tower Pledge.
"Prime Rate" shall mean the per annum rate of interest announced by the
Agent, at its main office from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Agent, to any of its customers), which Prime Rate shall change
simultaneously with any change in such announced rate.
"Prime-based Advance" shall mean an Advance which bears
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interest at the Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest which is
equal to the greater of (i) the Prime Rate, or (ii) the Alternate Base Rate.
"Projected Interest Expense" shall mean as of any date of determination the
aggregate of the payments to be made in respect of interest on all Funded Debt
of Company and its Consolidated Subsidiaries during the four fiscal quarters
following such date of determination. In determining interest expense for
variable rate indebtedness, the amount of interest to be taken into account for
such period and for which the actual interest rate cannot be determined shall be
computed at an assumed annual interest rate equal to the interest rate in effect
for the applicable variable rate indebtedness on the applicable date of
determination.
"Reaffirmation of Loan Documents" is defined in Section 6.3.
"Reimbursement Agreement (Indiana)" shall mean the Reimbursement Agreement
dated as of June 29, 1993 by and between Tower (Indiana) and Comerica Bank
relating to the Indiana Bonds, as amended from time to time.
"Reimbursement Agreements (Kentucky)" shall mean the Reimbursement
Agreement dated as of June 1, 1994 and the Reimbursement Agreement dated as of
March 1, 1995, both by and between Tower (Kentucky) and Comerica Bank relating
to the Kentucky Bonds, as amended from time to time.
"Request for Revolving Credit Advance" shall mean a Request for Revolving
Credit Advance issued by Company under Section 2.7 of this Agreement in the form
annexed hereto as Exhibit A.
"Request for Swing Line Advance" shall mean a Request for Swing Line
Advance issued by Company under Section 4.6 of this Agreement in the form
attached hereto as Exhibit D.
"Revolving Credit" shall mean the revolving credit loan to be advanced to
the Company by the Banks pursuant to Article 2 hereof, in an aggregate amount
(subject to the terms hereof), not to exceed, at any one time outstanding, the
Revolving Credit Aggregate Commitment.
"Revolving Credit Advance" shall mean a borrowing requested by Company and
made by the Banks under Section 2.1 of this Agreement, including without
limitation any readvance, refunding or conversion of such borrowing pursuant to
Section 2.7 hereof and any Advance in respect of a Letter of Credit under
Section 3.6 hereof, and shall include, as applicable, a Eurodollar-based Advance
and/or Prime-based Advance.
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"Revolving Credit Aggregate Commitment" shall mean Seventy Five Million
Dollars ($75,000,000) subject to reduction or termination under Section 2.13 or
10.2 hereof.
"Revolving Credit Commitment Fee" shall mean the fees payable to Agent for
distribution to the Banks pursuant to Section 2.11 hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
January 31, 2001, and (ii) the date on which the Revolving Credit Aggregate
Commitment shall be terminated pursuant to Section 2.13 or Section 10.2 hereof.
"Revolving Credit Notes" shall mean the revolving credit notes described in
Section 2.1 hereof, made by Company to each of the Banks in the form annexed to
this agreement as Exhibit B, as such notes may be amended or supplemented from
time to time, and any other notes issued in substitution, replacement or renewal
thereof from time to time.
"Secondary Offering" shall mean the public offering of stock of the Parent
pursuant to which the Parent has received net proceeds in an amount not less
than $30,000,000 and which proceeds have been downstreamed to Company pursuant
to the terms of the Parent Letter Agreement.
"Senior Debt" shall mean the senior debt issued by the Company pursuant to
the Senior Debt Documents in an aggregate principal amount of Sixty Five Million
Dollars ($65,000,000).
"Senior Debt Documents" shall mean those certain note purchase agreements
dated as of May 31, 1996 between the Company and the respective Senior Note
Purchasers with respect to the Senior Debt, and the Senior Notes issued
thereunder, together with any and all other documents, instruments and
certificates executed and delivered pursuant thereto, including without
limitation the Permitted Guaranties, and the Tower Pledge, as the same may be
amended from time to time (subject to the terms hereof), and all other documents
executed in exchange therefor or in replacement or renewal thereof.
"Senior Note Purchasers" shall mean the note purchasers which are
signatories to the Senior Debt Documents, and their respective successors and
assigns.
"Senior Notes" shall mean the 7.65% Senior Secured Notes, Series A, Due
June 1, 2006 and the 7.82% Senior Secured Notes, Series B, Due June 1, 2008
issued by Company to the Senior Note Purchasers.
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, or business trust of which more
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than fifty percent (50%) of the outstanding voting stock or share capital is
owned either directly or indirectly by any Person or one or more of its
Subsidiaries, or the management of which is otherwise controlled, directly, or
indirectly through one or more intermediaries, or both, by any Person and/or its
Subsidiaries. Unless otherwise specified to the contrary herein, Subsidiary(ies)
shall refer to the Company's Subsidiary(ies).
"Swing Line Advance" shall mean an Advance made by the Swing Line Bank to
Company pursuant to Section 4.1 hereof.
"Swing Line Bank" shall mean Comerica Bank, in its capacity as lender under
Article 4 of this Agreement, and its successors and assigns.
"Swing Line Note" shall mean the swing line note described in Section 4.1
hereof, made by Company to Swing Line Bank in the form annexed hereto as Exhibit
E, as such Note may be amended or supplemented from time to time, and any notes
issued in substitution, replacement or renewal thereof from time to time.
"Tower Pledge" shall mean the Second Amended and Restated Security
Agreement (Third Party Pledge), a copy of which is attached hereto as Exhibit N,
dated as of May 30, 1996, pursuant to which Parent grants to the Collateral
Agent and the Lenders a first priority security interest in all of the issued
and outstanding stock of Company, as may be amended from time to time.
"Tower (Delaware)" shall mean Tower Automotive Delaware, Inc., formerly
known as MascoTech Stamping Technologies, Inc., a Delaware corporation.
"Tower (Indiana)" shall mean R.J. Tower Corporation, an Indiana
corporation.
"Tower (Kentucky)" shall mean R.J. Tower Corporation, a Kentucky
corporation.
"Trylon" shall mean Trylon Corporation, a Michigan corporation.
"UCC" shall mean the Uniform Commercial Code, as in effect from time to
time in the State of Michigan.
"Underwriting Agreement" shall mean the Underwriting Agreement to be
entered into on or about June 20, 1996, by and among Parent, Company and the
Guarantors, certain selling shareholders and Painewebber Incorporated, Robert W.
Baird & Co. Incorporated and Piper Jaffray Inc.
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2. REVOLVING CREDIT.
2.1 REVOLVING CREDIT COMMITMENT. Subject to the terms and conditions of
this Agreement, each Bank severally and for itself alone agrees to make Advances
of the Revolving Credit to Company from time to time on any Business Day during
the period from the effective date hereof until (but excluding) the Revolving
Credit Maturity Date in an aggregate amount not to exceed at any one time
outstanding each such Bank's Percentage of the Revolving Credit Aggregate
Commitment. All of such Advances hereunder shall be evidenced by the Revolving
Credit Notes, under which advances, repayments and readvances may be made,
subject to the terms and conditions of this Agreement.
2.2 ACCRUAL OF INTEREST AND MATURITY. The Revolving Credit Notes, and all
principal and interest outstanding thereunder, shall mature and become due and
payable in full on the Revolving Credit Maturity Date, and each Advance
evidenced by the Revolving Credit Notes from time to time outstanding hereunder
shall, from and after the date of such Advance, bear interest at its Applicable
Interest Rate. The amount and date of each Revolving Credit Advance, its
Applicable Interest Rate, its Interest Period, and the amount and date of any
repayment shall be noted on Agent's records, which records will be conclusive
evidence thereof, absent manifest error; provided, however, that any failure by
the Agent to record any such information shall not relieve Company of its
obligation to repay the outstanding principal amount of such Advance, all
interest accrued thereon and any amount payable with respect thereto in
accordance with the terms of this Agreement and the Loan Documents.
2.3 PRIME-BASED INTEREST PAYMENTS. Interest on the unpaid balance of all
Prime-based Advances from time to time outstanding shall accrue from the date of
such Advances to the Revolving Credit Maturity Date (and until paid), at a per
annum interest rate equal to the Prime-based Rate, and shall be payable in
immediately available funds quarterly commencing on the first day of the
calendar quarter next succeeding the calendar quarter during which the initial
Advance is made and on the first day of each calendar quarter thereafter.
Interest accruing at the Prime-based Rate shall be computed on the basis of a
360 day year and assessed for the actual number of days elapsed, and in such
computation effect shall be given to any change in the interest rate resulting
from a change in the Prime-based Rate on the date of such change in the
Prime-based Rate.
2.4 EURODOLLAR-BASED INTEREST PAYMENTS. Interest on each Eurodollar-based
Advance having a related Interest Period of three (3) months or less shall
accrue at its Eurodollar-based Rate and shall be payable in immediately
available funds on the last day of the Interest Period applicable thereto.
Interest shall be payable in immediately available funds on each
Eurodollar-based Advance outstanding from time to time having an Interest Period
of more than three (3) months, at intervals of three (3) months after the
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first day of the applicable Interest Period, and shall also be payable on the
last day of the Interest Period applicable thereto. Interest accruing at the
Eurodollar-based Rate shall be computed on the basis of a 360 day year and
assessed for the actual number of days elapsed from the first day of the
Interest Period applicable thereto to, but not including, the last day thereof.
2.5 INTEREST PAYMENTS ON CONVERSIONS. Notwithstanding anything to the
contrary in Sections 2.2, 2.3 and 2.4, all accrued and unpaid interest on any
Revolving Credit Advance refunded or converted pursuant to Section 2.7 hereof
shall be due and payable in full on the date such Advance is refunded or
converted.
2.6 INTEREST ON DEFAULT. Notwithstanding anything to the contrary set
forth in Sections 2.3 and 2.4, in the event and so long as any Event of Default
shall exist under this Agreement, interest shall be payable daily on the
principal amount of all Advances from time to time outstanding (and on all other
monetary obligations of Company hereunder and under the other Loan Documents) at
a per annum rate equal to the Applicable Interest Rate (and, with respect to
Eurodollar-based Advances calculated on the basis of the maximum Margin) in
respect of each such Advance, plus, in the case of Eurodollar-based Advances,
two percent (2%) per annum for the remainder of the then existing Interest
Period, if any, and at all other such times and for all Prime-based Advances, at
a per annum rate equal to the Prime-based Rate, plus two percent (2%).
2.7 REQUESTS FOR ADVANCES AND REQUESTS FOR REFUNDINGS AND CONVERSIONS OF
REVOLVING CREDIT ADVANCES. Company may request a Revolving Credit Advance,
refund any Revolving Credit Advance in the same type of Revolving Credit Advance
or convert any Revolving Credit Advance to any other type of Revolving Credit
Advance only after delivery to Agent of a Request for Revolving Credit Advance
executed by an authorized officer of Company subject to the following and to the
remaining provisions hereof:
(a) each such Request for Revolving Credit Advance shall set forth
the information required on the Request for Revolving Credit Advance form
annexed hereto as Exhibit A, including without limitation:
(i) the proposed date of Revolving Credit Advance, which must be a
Business Day;
(ii) whether the Revolving Credit Advance is a refunding or
conversion of an outstanding Revolving Credit Advance; and
(iii) whether such Revolving Credit Advance is to be a Prime-based
Advance or a Eurodollar-based Advance, and, except in the case
of a Prime-based Advance,
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the first Interest Period applicable thereto;
(b) each such Request for Revolving Credit Advance shall be
delivered to Agent by 11:00 a.m. (Detroit time) one (1) Business Day prior
to the proposed date of Revolving Credit Advance, except in the case of a
Prime-based Advance, for which the Request for Revolving Credit Advance
must be delivered by 12:00 noon (Detroit time) on such proposed date;
(c) the principal amount of such requested Revolving Credit
Advance, plus the principal amount of all other Advances then outstanding
hereunder, plus the principal amount of all Advances requested hereunder
but not yet funded, plus the aggregate undrawn portion of any Letters of
Credit (excluding the Bond Letters of Credit) which shall be outstanding as
of the date of the requested Revolving Credit Advance and the aggregate
face amount of Letters of Credit requested but not yet issued, less the
principal amount of any outstanding Advance to be refunded by the requested
Revolving Credit Advance, shall not exceed the then applicable Revolving
Credit Aggregate Commitment;
(d) the principal amount of such Revolving Credit Advance, plus the
amount of any other outstanding Indebtedness under this Agreement to be
then combined therewith having the same Applicable Interest Rate and
Interest Period, if any, shall be (i) in the case of a Prime-based Advance,
at least $100,000 and (ii) in the case of a Eurodollar-based Advance, at
least $500,000, or any larger amount in $100,000 increments, and at any one
time there shall not be in effect more than five (5) Interest Periods;
(e) each Request for Revolving Credit Advance, once delivered to
Agent, shall not be revocable by Company, and shall constitute and include
a certification by the Company as of the date thereof that:
(i) both before and after the Revolving Credit Advance, the
obligations of the Company set forth in this Agreement and the
parties to the Loan Documents, as applicable, are valid,
binding and enforceable obligations of Company and such
parties, respectively;
(ii) to the best knowledge of Company all conditions to Advances of
the Revolving Credit have been satisfied;
(iii) both before and after the Advance, there is no Default or Event
of Default in existence; and
(iv) both before and after the Advance, the
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representations and warranties contained in this Agreement and
the Loan Documents are true and correct in all material
respects.
2.8 DISBURSEMENT OF REVOLVING CREDIT ADVANCES. (a) Upon receiving any
Request for Revolving Credit Advance from Company under Section 2.7 hereof,
Agent shall promptly notify each Bank by wire, telecopy, telex or by telephone
(confirmed by wire, telecopy or telex) of the amount of such Revolving Credit
Advance to be made and the date such Advance is to be made by said Bank pursuant
to its Percentage of the Revolving Credit Advance. Unless such Bank's commitment
to make Revolving Credit Advances hereunder shall have been suspended or
terminated in accordance with this Agreement, each Bank shall send the amount of
its Percentage of the Advance in same day funds in Dollars to Agent at the
office of Agent located at One Detroit Center, Detroit, Michigan 48226-3289 not
later than 2:00 p.m. (Detroit time) on the date of such Advance.
(b) Subject to submission of an executed Request for Revolving
Credit Advance by Company without exceptions noted in the compliance
certification therein and to the other terms and conditions hereof, Agent
shall make available to Company the aggregate of the amounts so received by
it from the Banks under this Section 2.8, in like funds, not later than
4:00 p.m. (Detroit time) on the date of such Revolving Credit Advance by
credit to an account of Company maintained with Agent or to such other
account or third party as Company may reasonably direct.
(c) Unless Agent shall have been notified by any Bank prior to the
date of any proposed Revolving Credit Advance that such Bank does not
intend to make available to Agent such Bank's Percentage of the Revolving
Credit Advance, Agent may assume that such Bank has made such amount
available to Agent on such date, as aforesaid and may, in its sole
discretion and without obligation to do so, in reliance upon such
assumption, make available to Company a corresponding amount. If such
amount is not in fact made available to Agent by such Bank in accordance
with Section 2.8(a), as aforesaid, Agent shall be entitled to recover such
amount on demand from such Bank. If such Bank does not pay such amount
forthwith upon Agent's demand therefor, the Agent shall promptly notify
Company, and Company shall pay such amount to Agent. Agent shall also be
entitled to recover from such Bank or from Company, as the case may be,
interest on such amount in respect of each day from the date such amount
was made available by Agent to Company to the date such amount is recovered
by Agent, at a rate per annum equal to:
(i) in the case of such Bank, the Federal Funds Effective Rate; or
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(ii) in the case of Company, the rate of interest then applicable to
the Revolving Credit Advance.
The obligation of any Bank to make any Revolving Credit Advance hereunder
shall not be affected by the failure of any other Bank to make any
Revolving Credit Advance hereunder, and no Bank shall have any liability to
the Company, the Agent, any other Bank, or any other party for another
Bank's failure to make any loan or Revolving Credit Advance hereunder.
2.9 PRIME-BASED ADVANCE IN ABSENCE OF ELECTION OR UPON DEFAULT. If, as to
any outstanding Eurodollar-based Advance, Agent has not received payment on the
last day of the Interest Period applicable thereto, or does not receive a timely
Request for Revolving Credit Advance meeting the requirements of Section 2.7
hereof with respect to the refunding or conversion of such Advance, or, subject
to Section 2.6 hereof, if on such day a Default or Event of Default shall exist,
the principal amount thereof which is not then prepaid shall be converted
automatically to a Prime-based Advance and the Agent shall thereafter promptly
notify Company of said action.
2.10 PREPAYMENT. Company may prepay all or part of the outstanding balance
of any Prime-based Advance(s) at any time, provided that the amount of any
partial prepayment shall be at least One Hundred Thousand Dollars ($100,000) and
the aggregate balance of Prime-based Advance(s) remaining outstanding under the
Revolving Credit Notes shall be at least One Hundred Thousand Dollars
($100,000). Company may prepay all or part of any Eurodollar-based Advance
(subject to not less than three (3) Business Days' notice to Agent) only on the
last day of the Interest Period applicable thereto, provided that the amount of
any such partial prepayment shall be at least One Hundred Thousand Dollars
($100,000), and the unpaid portion of such Advance which is refunded or
converted under Section 2.7 shall be at least Five Hundred Thousand Dollars
($500,000). Any prepayment made in accordance with this Section shall be without
premium, penalty or prejudice to the right to reborrow under the terms of this
Agreement. Any other prepayment of all or any portion of the Revolving Credit,
whether by acceleration, mandatory or required prepayment or otherwise, shall be
subject to Section 12.1 hereof, but otherwise without premium, penalty or
prejudice.
2.11 REVOLVING CREDIT COMMITMENT FEE. From the date hereof to (but
excluding) the Revolving Credit Maturity Date, the Company shall pay to each of
the Banks, a Revolving Credit Commitment Fee determined by multiplying the
Applicable Commitment Fee Percentage (determined with reference to SCHEDULE 1 of
this Agreement) times the average daily amount by which such Bank's Percentage
of the Revolving Credit Aggregate Commitment then in effect exceeds the sum of
(i) such Bank's Percentage of the aggregate principal amount of Revolving Credit
Advances outstanding from time to time during
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such period (plus, in the case of the Swing Line Bank, the aggregate principal
amount of Swing Line Advances outstanding during such period) and (ii) such
Bank's Percentage of the aggregate daily undrawn amount of any Letters of Credit
during such period, calculated on a daily basis. The Revolving Credit Commitment
Fee shall be payable quarterly in arrears commencing November 1, 1996, and on
the first day of each February, May, August and November thereafter and at the
Revolving Credit Maturity Date, and shall be computed on the basis of a year of
three hundred sixty (360) days and assessed for the actual number of days
elapsed. Whenever any payment of the Revolving Credit Commitment Fee shall be
due on a day which is not a Business Day, the date for payment thereof shall be
extended to the next Business Day. Such Revolving Credit Commitment Fee shall be
paid by Company to the Agent. Upon receipt of such payment, Agent shall make
prompt payment to each Bank of its share of the Revolving Credit Commitment Fee.
The Revolving Credit Commitment Fee shall not be refundable under any
circumstance.
2.12 REDUCTION OF INDEBTEDNESS; REVOLVING CREDIT AGGREGATE COMMITMENT. If
at any time and for any reason the aggregate principal amount of Advances
hereunder to Company, plus the aggregate undrawn amount of any Letters of Credit
(excluding the Bond Letters of Credit) which shall be outstanding at such time,
shall exceed the then applicable Revolving Credit Aggregate Commitment, Company
shall immediately reduce any pending request for an Advance on such day by the
amount of such excess and, to the extent any excess remains thereafter,
immediately repay an amount of the Indebtedness equal to such excess and, to the
extent such Indebtedness consists of Letter of Credit obligations, provide cash
collateral on the basis set forth in Section 10.2 hereof. Company acknowledges
that, in connection with any repayment required hereunder, it shall also be
responsible for the reimbursement of any prepayment or other costs required
under Section 12.1 hereof; provided, however, that Company shall, in order to
reduce any such prepayment costs and expenses, first prepay such portion of the
Indebtedness then carried as a Prime-based Advance, if any.
2.13 OPTIONAL REDUCTION OR TERMINATION OF REVOLVING CREDIT AGGREGATE
COMMITMENT. The Company may, upon at least five (5) Business Days' prior written
notice to Agent, permanently reduce the Revolving Credit Aggregate Commitment in
whole at any time, or in part from time to time, without premium or penalty,
provided that: (i) each partial reduction of the Revolving Credit Aggregate
Commitment shall be in an aggregate amount equal to at least Five Million
Dollars ($5,000,000) or a larger integral multiple of One Million Dollars
($1,000,000); (ii) each reduction shall be accompanied by the payment of the
Revolving Credit Commitment Fee, if any, accrued to the date of such reduction;
(iii) the Company shall prepay in accordance with the terms hereof the amount,
if any, by which the aggregate unpaid principal amount of Swing Line Advances
and Revolving Credit Advances, plus the aggregate amount
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of outstanding Letters of Credit (excluding the Bond Letters of Credit), exceeds
the amount of the Revolving Credit Aggregate Commitment, taking into account the
aforesaid reductions thereof, together with accrued but unpaid interest on the
principal amount of such prepaid Advances to the date of prepayment; (iv) if the
termination or reduction of the Revolving Credit Aggregate Commitment requires
the prepayment of a Eurodollar-based Advance or Quoted Rate Advance, the
termination or reduction may be made only on the last Business Day of the then
current Interest Period applicable to such Advance and (v) no reduction shall
reduce the amount of the Revolving Credit Aggregate Commitment to an amount
which is less than the sum of the aggregate undrawn amount of any Letters of
Credit (excluding the Bond Letters of Credit) outstanding at such time.
Reductions of the Revolving Credit Aggregate Commitment and any accompanying
prepayments of the Revolving Credit Notes shall be distributed by Agent to each
Bank in accordance with such Bank's Percentage thereof, and will not be
available for reinstatement by or readvance to the Company and any accompanying
prepayments of the Swing Line Note shall be distributed by Agent to the Swing
Line Bank and will not be available for reinstatement by or readvance to the
Company. Any reductions of the Revolving Credit Aggregate Commitment hereunder
shall reduce each Bank's portion thereof proportionately (based upon the
applicable Percentages), and shall be permanent and irrevocable.
2.14 REVOLVING CREDIT AS RENEWAL. The Revolving Credit Notes and Swing
Line Note issued by Company hereunder shall constitute renewal and replacement
evidence of all present Indebtedness of Company outstanding under the Revolving
Credit Notes and Swing Line Note issued under and as defined in the Prior Credit
Agreement.
2.15 USE OF REVOLVING CREDIT PROCEEDS. Proceeds of the Revolving Credit
Notes shall be used, subject to the terms hereof, to fund working capital needs
or other general corporate purposes of the Company.
3. LETTERS OF CREDIT.
3.1 LETTERS OF CREDIT. Subject to the terms and conditions of this
Agreement, Agent may through its Issuing Office, at any time and from time to
time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account Party
accompanied by a duly executed Letter of Credit Agreement and such other
documentation related to the requested Letter of Credit as the Agent may
reasonably require, issue standby or documentary Letters of Credit for the
account of such Account Party, in an aggregate amount for all Letters of Credit
issued hereunder at any one time outstanding, and excluding the Bond Letters of
Credit, not to exceed the Letter of Credit Maximum Amount. Each Letter of Credit
shall have an expiration date not later than one (1) year from its date of
issuance; provided
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that each Letter of Credit (including any renewal thereof) shall expire not
later than ten (10) Business Days prior to the Revolving Credit Maturity Date in
effect on the date of issuance thereof. The submission of all applications and
the issuance of each Letter of Credit hereunder shall be subject in all respects
to applicable provisions of U.S. law and regulations, including without
limitation, the Trading With the Enemy Act, Export Administration Act,
International Emergency Economic Powers Act, and the Regulations of the Office
of Foreign Assets Control of the U.S. Department of the Treasury.
3.2 CONDITIONS TO ISSUANCE. No Letter of Credit shall be issued at the
request and for the account of any Account Party unless, as of the date of
issuance of such Letter of Credit:
(a) the face amount of the Letter of Credit requested, plus the
undrawn portion of all other outstanding Letters of Credit
(excluding the Bond Letters of Credit) and the aggregate amount
of all unpaid Letter of Credit Obligations, does not exceed the
Letter of Credit Maximum Amount;
(b) the face amount of the Letter of Credit requested, plus the
aggregate principal amount of all Advances outstanding under
the Revolving Credit Notes, plus the principal amount of all
Revolving Credit Advances requested but not yet funded, plus
the aggregate undrawn portion of all other outstanding Letters
of Credit (excluding the Bond Letters of Credit), do not exceed
the then applicable Revolving Credit Aggregate Commitment;
(c) the obligations of Company set forth in this Agreement and the
Loan Documents are valid, binding and enforceable obligations
of Company and the valid, binding and enforceable nature of
this Agreement and the Loan Documents has not been disputed by
Company;
(d) both immediately before and immediately after issuance of the
Letter of Credit requested, no Default or Event of Default
exists;
(e) the representations and warranties contained in this Agreement
and the Loan Documents are true in all material respects as if
made on such date;
(f) the execution of the Letter of Credit Agreement with respect to
the Letter of Credit requested will not violate the terms and
conditions of any material contract, agreement or other
borrowing of Company;
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(g) the Account Party requesting the Letter of Credit shall have
delivered to Agent at its Issuing Office, not less than five (5)
Business Days prior to the requested date for issuance (or such
shorter time as the Agent, in its sole discretion, may permit),
the Letter of Credit Agreement related thereto, together with
such other documents and materials as may be reasonably required
pursuant to the terms thereof, and the terms of the proposed
Letter of Credit shall be satisfactory to Agent and its Issuing
Office in the exercise of its reasonable discretion;
(h) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or
restrain Agent from issuing the Letter of Credit, or any Bank
from taking an assignment of its Percentage thereof pursuant to
Section 3.6 hereof, and no law, rule, regulation, request or
directive (whether or not having the force of law) shall prohibit
or request that Agent refrain from issuing, or any Bank refrain
from taking an assignment of its Percentage of, the Letter of
Credit requested or letters of credit generally;
(i) there shall have been no introduction of or change in the
interpretation of any law or regulation that would make it
unlawful or unduly burdensome for the Agent to issue the
requested Letter of Credit, no general suspension of trading on
the New York Stock Exchange or any other national securities
exchange, no declaration of a general banking moratorium by
banking authorities in the United States, Michigan or the
respective jurisdictions in which the Banks, the Account Party
and the beneficiary of the requested Letter of Credit are
located, and no establishment of any new restrictions on
transactions involving letters of credit or on banks materially
affecting the extension of credit by banks; and
(j) Agent shall have received the issuance fee required in connection
with the issuance of such Letter of Credit pursuant to Section
3.5 hereof.
Each Letter of Credit Agreement submitted to Agent pursuant hereto shall
constitute the certification by the Company and the Account Party of the
matters set forth in this Section 3.2 (a) through (f). The Agent shall be
entitled to rely on such certification without any duty of inquiry.
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3.3 NOTICE. Agent shall give notice, substantially in the form attached
as Exhibit C, to each Revolving Credit Bank of the issuance of each Letter of
Credit, not later than three (3) Business Days after issuance of each Letter
of Credit, specifying the amount thereof and the amount of such Bank's
Percentage thereof.
3.4 LETTER OF CREDIT FEES. Company shall pay to the Agent for
distribution to the Banks in accordance with the Percentages, Letter of
Credit Fees as follows:
(a) a per annum Letter of Credit Fee with respect to the undrawn
amount of each Letter of Credit (including the Bond Letters of Credit) the
Applicable L/C Fee Percentage (determined with reference to SCHEDULE 1 of
this Agreement), exclusive of the issuance fee of one-eighth of one
percentage point (1/8%) per annum on the face amount thereof to be paid to
Agent under Section 3.5 hereof.
(b) If any change in any law or regulation or in the interpretation
thereof by any court or administrative or governmental authority charged with
the administration thereof shall either (i) impose, modify or cause to be
deemed applicable any reserve, special deposit, limitation or similar
requirement against letters of credit issued by, or assets held by, or
deposits in or for the account of, Agent or any of the Banks or (ii) impose
on Agent or any of the Banks any other condition regarding this Agreement or
the Letters of Credit, and the result of any event referred to in clause (i)
or (ii) above shall be to increase in an amount deemed material by Agent or
the Banks the cost or expense to Agent or the Banks of issuing or maintaining
or participating in any of the Letters of Credit (which increase in cost or
expense shall be determined by the Agent's or such Bank's reasonable
allocation of the aggregate of such cost increases and expense resulting from
such events), then, upon demand by the Agent or such Bank, as the case may
be, the Company shall, within ten days following demand for payment, pay to
Agent or such Bank, as the case may be, from time to time as specified by the
Agent or such Bank, additional amounts which shall be sufficient to
compensate the Agent or such Bank for such increased cost and expense,
together with interest on each such amount from ten days after the date
demanded until payment in full thereof at the Prime-based Rate. A certificate
as to such increased cost or expense incurred by the Agent or such Bank, as
the case may be, as a result of any event mentioned in clause (i) or (ii)
above, shall be promptly submitted to the Company and shall be conclusive,
absent manifest error, as to the amount thereof.
(c) All payments by the Company to the Agent or the Banks under
this Section 3.4 shall be made in Dollars and in immediately available funds
at the Agent's Issuing Office or such other office of the Agent as may be
designated from time to time by
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written notice to the Company by the Agent. The aforesaid fees shall be
nonrefundable under all circumstances, shall be payable quarterly in arrears
on the first day of each calendar quarter, and shall be calculated on the
basis of a 360 day year and assessed for the actual number of days from the
date of the issuance thereof to the stated expiration thereof.
3.5 ISSUANCE FEES. In connection with the Letters of Credit, Company
shall pay to Agent a letter of credit issuance fee of one-eighth percentage
point (1/8%) per annum on the face amount of all Letters of Credit (excluding
the Bond Letters of Credit). In addition to the Letter of Credit Fees, the
Company and the applicable Account Party shall pay, for the sole account of
the Agent, standard documentation, administration, payment and cancellation
charges assessed by Agent or its Issuing Office, at the times, in the amounts
and on the terms set forth or to be set forth from time to time in the
standard fee schedule of Agent's Issuing office in effect from time to time.
3.6 DRAWS AND DEMANDS FOR PAYMENT UNDER LETTERS OF CREDIT.
(a) The Company and each applicable Account Party agrees to pay to
the Agent, on the day on which the Agent shall honor a draft or other demand
for payment presented or made under any Letter of Credit, (except for Bond
Letters of Credit, in which case on the date when due in accordance with the
terms and conditions of the applicable Bond Reimbursement Agreement), an
amount equal to the amount paid by the Agent in respect of such draft or
other demand under such Letter of Credit and all expenses paid or incurred by
the Agent relative thereto. Unless the Company or the applicable Account
Party shall have made such payment to the Agent on such day, upon each such
payment by the Agent, other than payments made with respect to any Bond
Letter of Credit, the Agent shall be deemed to have disbursed to the Company
or the applicable Account Party, and the Company or the applicable Account
Party shall be deemed to have elected to substitute for its reimbursement
obligation, a Prime-based Advance from the Banks in an amount equal to the
amount so paid by the Agent in respect of such draft or other demand under
such Letter of Credit. Such Prime-based Advance shall be disbursed
notwithstanding any failure to satisfy any conditions for disbursement of any
Advance set forth in Article 2 hereof and, to the extent of the Prime-based
Advance so disbursed, the reimbursement obligation of the Company or the
applicable Account Party to the Agent under this Section 3.6 shall be deemed
satisfied.
(b) If the Agent shall honor a draft or other demand for payment
presented or made under any Letter of Credit, the Agent shall provide notice
thereof to the Company and the applicable Account Party on the date such
draft or demand is honored, and to each Bank on such date unless the Company
or applicable Account Party shall have satisfied its reimbursement obligation
under
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Section 3.6(a) by payment to the Agent on such date. The Agent shall further
use reasonable efforts to provide notice to the Company or applicable Account
Party prior to honoring any such draft or other demand for payment, but such
notice, or the failure to provide such notice, shall not affect the rights or
obligations of the Agent with respect to any Letter of Credit or the rights
and obligations of the parties hereto, including without limitation the
obligations of the Company or applicable Account Party under Section 3.6(a)
hereof.
(c) Upon issuance by the Agent of each Letter of Credit hereunder
and upon execution of this Agreement with respect to the Bond Letters of
Credit and Existing Letters of Credit, each Bank shall automatically acquire
a pro rata risk participation interest in such Letter of Credit and related
Letter of Credit Payment based on its respective Percentage. Each Bank, on
the date a draft or demand under any Letter of Credit (including any Bond
Letter of Credit or Existing Letter of Credit) is honored, shall make its
Percentage share of the amount paid by the Agent, and not reimbursed by the
Company or applicable Account Party by payment to the Agent on such day,
available in immediately available funds at the principal office of the Agent
for the account of the Agent. If and to the extent such Bank shall not have
made such pro rata portion available to the Agent, such Bank, the Company and
the applicable Account Party severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date
such amount was paid by the Agent until such amount is so made available to
the Agent at a per annum rate equal to the interest rate applicable during
such period to the related Advance disbursed under Section 3.6(a) in respect
of the reimbursement obligation of the Company and the applicable Account
Party for Letters of Credit other than the Bond Letters of Credit. If such
Bank shall pay such amount to the Agent together with such interest, such
amount so paid with respect to Letters of Credit other than the Bond Letters
of Credit shall constitute a Prime-based Advance by such Bank disbursed in
respect of the reimbursement obligation of the Company or applicable Account
Party under Section 3.6(a) for purposes of this Agreement, effective as of
the date such amount was paid by the Agent. The failure of any Bank to make
its pro rata portion of any such amount paid by the Agent available to the
Agent shall not relieve any other Bank of its obligation to make available
its pro rata portion of such amount, but no Bank shall be responsible for
failure of any other Bank to make such pro rata portion available to the
Agent.
(d) Nothing in this Agreement shall be construed to require or
authorize any Bank to issue any Letter of Credit, it being recognized that
the Agent shall be the sole issuer of Letters of Credit under this Agreement.
3.7 OBLIGATIONS IRREVOCABLE. The obligations of Company and any Account
Party to make payments to Agent or the Banks with
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respect to Letter of Credit Obligations under Section 3.6 hereof, shall be
unconditional and irrevocable and not subject to any qualification or
exception whatsoever, including, without limitation:
(a) Any lack of validity or enforceability of any Letter of Credit
or any documentation relating to any Letter of Credit or to any transaction
related in any way to such Letter of Credit (the "Letter of Credit
Documents");
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to any of the Letter of Credit Documents;
(c) The existence of any claim, setoff, defense or other right
which the Company or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be acting),
the Agent or any Bank or any other person or entity, whether in connection
with any of the Letter of Credit Documents, the transactions contemplated
herein or therein or any unrelated transactions;
(d) Any draft or other statement or document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(e) Payment by the Agent to the beneficiary under any Letter of
Credit against presentation of documents which do not comply with the terms
of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(f) Any failure, omission, delay or lack on the part of the Agent
or any Bank or any party to any of the Letter of Credit Documents to enforce,
assert or exercise any right, power or remedy conferred upon the Agent, any
Bank or any such party under this Agreement, any of the Loan Documents or any
of the Letter of Credit Documents, or any other acts or omissions on the part
of the Agent, any Bank or any such party; or
(g) Any other event or circumstance that would, in the absence of
this Section 3.7, result in the release or discharge by operation of law or
otherwise of Company or any Account Party from the performance or observance
of any obligation, covenant or agreement contained in Section 3.6.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which Company or any Account Party has or may
have against the beneficiary of any Letter of
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Credit shall be available hereunder to Company or any Account Party against
the Agent or any Bank. Nothing contained in this Section 3.7 shall be deemed
to prevent Company or the Account Parties, after satisfaction in full of the
absolute and unconditional obligations of Company and the Account Parties
hereunder, from asserting in a separate action any claim, defense, set off or
other right which they (or any of them) may have against Agent or any Bank.
3.8 RISK UNDER LETTERS OF CREDIT. (a) In assigning and the handling of
Letters of Credit and any security therefor, or any documents or instruments
given in connection therewith, Agent shall have the sole right to take or
refrain from taking any and all actions under or upon the Letters of Credit.
(b) Subject to other terms and conditions of this Agreement, Agent
shall issue the Letters of Credit and shall hold the documents related
thereto in its own name and shall make all collections thereunder and
otherwise administer the Letters of Credit in accordance with Agent's
regularly established practices and procedures and, except pursuant to
Section 13.3 hereof, Agent will have no further obligation with respect
thereto. In the administration of Letters of Credit, Agent shall not be
liable for any action taken or omitted on the advice of counsel, accountants,
appraisers or other experts selected by Agent with due care and Agent may
rely upon any notice, communication, certificate or other statement from
Company, any Account Party, beneficiaries of Letters of Credit, or any other
Person which Agent believes to be authentic. Agent will, upon request,
furnish the Banks with copies of Letter of Credit Agreements, Letters of
Credit and documents related thereto.
(c) In connection with the issuance and administration of Letters
of Credit and the assignments hereunder, Agent makes no representation and
shall, subject to Section 3.7 hereof, have no responsibility with respect to
(i) the obligations of Company or any Account Party or, the validity,
sufficiency or enforceability of any document or instrument given in
connection therewith, (ii) the financial condition of, any representations
made by, or any act or omission of Company, the applicable Account Party or
any other Person, or (iii) any failure or delay in exercising any rights or
powers possessed by Agent in its capacity as issuer of Letters of Credit in
the absence of its gross negligence or willful misconduct. Each of the Banks
expressly acknowledge that they have made and will continue to make their own
evaluations of Company's and the Account Parties' creditworthiness without
reliance on any representation of Agent or Agent's officers, agents and
employees.
(d) If at any time Agent shall recover any part of any unreimbursed
amount for any draw or other demand for payment under a Letter of Credit, or
any interest thereon, Agent shall receive same for the PRO RATA benefit of
the Banks in accordance with their
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respective Percentage interests therein and shall promptly deliver to each
Bank its share thereof, less such Bank's pro rata share of the costs of such
recovery, including court costs and attorney's fees. If at any time any Bank
shall receive from any source whatsoever any payment on any such unreimbursed
amount or interest thereon in excess of such Bank's Percentage share of such
payment, such Bank will promptly pay over such excess to Agent, for
redistribution in accordance with this Agreement.
3.9 INDEMNIFICATION. (a) The Company and each Account Party hereby
indemnifies and agrees to hold harmless the Banks and the Agent, and their
respective officers, directors, employees and agents, from and against any
and all claims, damages, losses, liabilities, costs or expenses of any kind
or nature whatsoever which the Banks or the Agent or any such person may
incur or which may be claimed against any of them by reason of or in
connection with any Letter of Credit, and neither any Bank nor the Agent or
any of their respective officers, directors, employees or agents shall be
liable or responsible for: (i) the use which may be made of any Letter of
Credit or for any acts or omissions of any beneficiary in connection
therewith; (ii) the validity, sufficiency or genuineness of documents or of
any endorsement thereon, even if such documents should in fact prove to be in
any or all respects invalid, insufficient, fraudulent or forged; (iii)
payment by the Agent to the beneficiary under any Letter of Credit against
presentation of documents which do not comply with the terms of any Letter of
Credit (unless such payment resulted from the gross negligence or willful
misconduct of the Agent), including failure of any documents to bear any
reference or adequate reference to such Letter of Credit; (iv) any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of
Credit; or (v) any other event or circumstance whatsoever arising in
connection with any Letter of Credit; provided, however, that Company and
Account Parties shall not be required to indemnify the Banks and the Agent
and such other persons, and the Banks and Agent shall be liable to the
Company and the Account Parties to the extent, but only to the extent, of any
direct, as opposed to consequential or incidental, damages suffered by
Company and the Account Parties which were caused by the Agent's gross
negligence, willful misconduct or wrongful dishonor of any Letter of Credit
after the presentation to it by the beneficiary thereunder of a draft or
other demand for payment and other documentation strictly complying with the
terms and conditions of such Letter of Credit.
(b) It is understood that in making any payment under a Letter of Credit
the Agent will rely on documents presented to it under such Letter of Credit
as to any and all matters set forth therein without further investigation and
regardless of any notice or information to the contrary. It is further
acknowledged and agreed that Company or an Account Party may have rights
against the beneficiary or others in connection with any Letter of Credit
with
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respect to which the Banks are alleged to be liable and it shall be a
condition of the assertion of any liability of the Banks under this Section
that Company or applicable Account Party shall contemporaneously pursue all
remedies in respect of the alleged loss against such beneficiary and any
other parties obligated or liable in connection with such Letter of Credit
and any related transactions.
3.10 RIGHT OF REIMBURSEMENT. Each Bank agrees to reimburse the Agent on
demand, pro rata in accordance with their Percentages, for (i) the
out-of-pocket costs and expenses of the Agent to be reimbursed by Company or
any Account Party pursuant to any Letter of Credit Agreement or any Letter of
Credit, to the extent not reimbursed by Company or Account Party and (ii) any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, fees, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against
Agent (in its capacity as issuer of any Letter of Credit) in any way relating
to or arising out of this Agreement, any Letter of Credit, any documentation
or any transaction relating thereto, or any Letter of Credit Agreement,
except to the extent that such liabilities, losses, costs or expenses were
incurred by Agent solely as a result of Agent's gross negligence or willful
misconduct.
3.11 EXISTING LETTERS OF CREDIT. Each Existing Letter of Credit shall be
deemed for all purposes of this Agreement to be a Letter of Credit (except
that Letter of Credit Fees and Bond Letter of Credit Fees (as such term is
defined in the Prior Credit Agreement) paid under the Prior Credit Agreement
or Bond Reimbursement Agreements, as applicable, shall be redistributed by
Agent to the Banks pro rata (based on the applicable Percentages) from the
effective date of this Agreement). On the date of execution of this
Agreement, the Agent shall be deemed automatically to have sold and
transferred, and each other Bank shall be deemed automatically, irrevocably,
and unconditionally to have purchased and received from the Agent, without
recourse or warranty, an undivided interest and risk participation, to the
extent of such other Bank's Percentage, in each Existing Letter of Credit and
the applicable Letter of Credit Obligations with respect thereto and any
security therefor or guaranty pertaining thereto.
3.12 CONFLICT. In the event of any conflict between the terms of this
Agreement and the terms of the Bond Reimbursement Agreements, the terms of
this Agreement shall govern and control.
4. SWING LINE CREDIT.
4.1 SWING LINE ADVANCES. The Swing Line Bank shall, on the terms and
subject to the conditions hereinafter set forth, make one or more advances
(each such advance being a "Swing Line Advance") to Company from time to time
on any Business Day during the period
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from the date hereof to (but excluding) the Revolving Credit Maturity Date in
an aggregate amount not to exceed One Million Dollars ($1,000,000) at any
time outstanding; PROVIDED, however, that after giving effect to all Swing
Line Advances and all Revolving Credit Advances requested to be made on such
date, the aggregate principal amount of all outstanding Advances and Advances
requested but not yet funded and the undrawn portion of all outstanding
Letters of Credit (excluding the Bond Letters of Credit) shall not exceed the
then applicable Revolving Credit Aggregate Commitment. All Swing Line
Advances shall be evidenced by the Swing Line Note, under which advances,
repayments and readvances may be made, subject to the terms and conditions of
this Agreement. Each Swing Line Advance shall mature and the principal amount
thereof shall be due and payable by Company on the last day of the Interest
Period applicable thereto. In no event whatsoever shall any outstanding Swing
Line Advance be deemed to reduce, modify or affect any Bank's commitment to
make Revolving Credit Advances based upon its Percentage.
4.2 ACCRUAL OF INTEREST. Each Swing Line Advance shall, from time to
time after the date of such Advance, bear interest at its Applicable Interest
Rate. The amount and date of each Swing Line Advance, its Applicable Interest
Rate, its Interest Period, and the amount and date of any repayment shall be
noted on Agent's records, which records will be conclusive evidence thereof,
absent manifest error; PROVIDED, however, that any failure by the Agent to
record any such information shall not relieve Company of its obligation to
repay the outstanding principal amount of such Advance, all interest accrued
therein and any amount payable with respect thereto in accordance with the
terms of this Agreement and the Loan Documents.
4.3 PRIME-BASED INTEREST PAYMENTS. Interest on the unpaid balance of all
Prime-based Advances from time to time outstanding under the Swing Line Note
shall accrue at a per annum interest rate equal to the Prime-based Rate, and
shall be payable in immediately available funds on the last day of the
Interest Period applicable thereto. Interest accruing at the Prime-based Rate
shall be computed on the basis of a 360 day year and assessed for the actual
number of days elapsed from the first day of the Interest Period applicable
thereto to, but not including, the last day thereof, and in such computation
effect shall be given to any change in the interest rate resulting from a
change in the Prime-based Rate on the date of such change in the Prime-based
Rate.
4.4 QUOTED RATE ADVANCE INTEREST PAYMENTS. Interest on each Quoted Rate
Advance outstanding under the Swing Line Note shall accrue at a per annum
rate equal to its Quoted Rate and shall be payable in immediately available
funds on the last day of the Interest Period applicable thereto. Interest
accruing at the Quoted Rate shall be computed on the basis of a 360 day year
and assessed for the actual number of days elapsed from the first day of the
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Interest Period applicable thereto to, but not including the last day thereof.
4.5 INTEREST ON DEFAULT. Notwithstanding anything to the contrary set
forth in Sections 4.3 and 4.4, in the event and so long as any Event of
Default shall exist under this Agreement, interest shall be payable daily on
the principal amount of all Swing Line Advances from time to time outstanding
at a per annum rate equal to the Applicable Interest Rate in respect of each
such Advance, plus, in the case of Quoted Rate Advances, two percent (2%) per
annum for the remainder of the then existing Interest Period, if any, and at
all other such times and for all Prime-based Advances, at a per annum rate
equal to the Prime-based Rate, plus two percent (2%).
4.6 REQUESTS FOR SWING LINE ADVANCES. Company may request a Swing Line
Advance only after delivery to Swing Line Bank of a Request for Swing Line
Advance executed by an authorized officer of Company, subject to the
following and to the remaining provisions hereof:
(a) each such Request for Swing Line Advance shall set forth the
information required on the Request for Swing Line Advance form annexed
hereto as Exhibit D, including without limitation:
(i) the proposed date of Swing Line Advance, which must be a
Business Day;
(ii) whether such Swing Line Advance is to be a Prime-based
Advance or Quoted Rate Advance; and
(iii) the duration of the Interest Period applicable thereto;
(b) each such Request for Swing Line Advance shall be delivered to
Swing Line Bank by 12:00 p.m. (Detroit time) on the proposed date of the
Swing Line Advance;
(c) the principal amount of such requested Swing Line Advance, plus
the principal amount of all other Advances then outstanding hereunder, plus
the principal amount of all other Advances requested but not yet funded, plus
the aggregate undrawn portion of any Letter of Credit (excluding any Bond
Letter of Credit) which shall be outstanding as of the date of the requested
Swing Line Advance, plus the aggregate face amount of Letters of Credit
requested but not yet issued, shall not exceed the then applicable Revolving
Credit Aggregate Commitment;
(d) the principal amount of such Swing Line Advance shall be at
least Fifty Thousand Dollars ($50,000);
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(e) each Request for Swing Line Advance, once delivered to Swing
Line Bank, shall not be revocable by Company, and shall constitute and
include a certification by the Company as of the date thereof that:
(i) both before and after the Swing Line Advance, the
obligations of the Company set forth in this Agreement and the Loan
Documents, as applicable, are valid, binding and enforceable obligations of
such parties;
(ii) to the best knowledge of Company all conditions to Advances
have been satisfied;
(iii) both before and after the Advance, there is no Default or
Event of Default in existence; and
(iv) both before and after the Advance, the representations and
warranties contained in this Agreement and the Loan Documents are true and
correct in all material respects.
Swing Line Bank shall promptly deliver to Agent by telecopier a copy of any
Request for Swing Line Advance received.
4.7 DISBURSEMENT OF SWING LINE ADVANCES. Subject to submission of an
executed Request for Swing Line Advance by Company without exceptions noted in
the compliance certification therein and to the other terms and conditions
hereof, Swing Line Bank shall make available to Company the amount so requested,
in same day funds, not later than 4:00 p.m. (Detroit time) on the date of such
Swing Line Advance by credit to an account of Company maintained with Swing Line
Bank or to such other account or third party as Company may reasonably direct.
Swing Line Bank shall promptly notify Agent of any Swing Line Advance by
telephone, telex or telecopier.
4.8 PREPAYMENT. Company may prepay all or part of the outstanding balance
of any Prime-based Advance(s) (subject to not less than one (1) Business Day's
notice to Agent) at any time, provided that the amount of any partial prepayment
shall be at least Fifty Thousand Dollars ($50,000), provided that the aggregate
amount remaining outstanding under each Swing Line Advance shall be at least
Fifty Thousand Dollars ($50,000). Company may prepay Quoted Rate Advances only
on the last day of the Interest Period applicable thereto. Any prepayment made
in accordance with this Section shall be without premium, penalty or prejudice
to the right to reborrow under the terms of this Agreement. All other
prepayments of any Swing Line Advance, whether by acceleration, mandatory or
required prepayment or otherwise, shall be made in accordance with Section 12.1
hereof.
4.9 REFUNDING OF OR PARTICIPATION INTEREST IN SWING LINE
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ADVANCES. (a) The Agent, at any time in its sole and absolute discretion, may
(or, upon the request of the Swing Line Bank, shall) on behalf of the Company
(which hereby irrevocably directs the Agent to act on its behalf) request
each Bank (including the Swing Line Bank in its capacity as a Bank) to make a
Revolving Credit Advance in an amount equal to such Bank's Percentage of the
principal amount of the Swing Line Advances (the "Refunded Swing Line
Advances") outstanding on the date such notice is given; PROVIDED that (i) at
any time as there shall be a Swing Line Advance outstanding for more than
thirty days, the Agent shall, on behalf of the Company (which hereby
irrevocably directs the Agent to act on its behalf), promptly request each
Bank (including the Swing Line Bank) to make a Revolving Credit Advance in an
amount equal to such Bank's Percentage of the principal amount of such
outstanding Swing Line Advance and (ii) Swing Line Advances shall be prepaid
by the Borrower in accordance with the provisions of Section 4.8 hereof.
Unless any of the events described in Section 10.1(l) shall have occurred (in
which event the procedures of paragraph (b) of this Section 4.9 shall apply)
and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance are then satisfied,
each Bank shall make the proceeds of its Revolving Credit Advance available
to the Agent for the ratable benefit of the Swing Line Bank at the office of
the Agent specified in the signature pages hereto prior to 11:00 a.m. Detroit
time, in funds immediately available on the Business Day next succeeding the
date such notice is given. The proceeds of such Revolving Credit Advances
shall be immediately applied to repay the Refunded Swing Line Advances.
(b) If, prior to the making of a Revolving Credit Advances pursuant
to paragraph (a) of this Section 4.9, one of the events described in Section
10.1(l) shall have occurred, each Bank will, on the date such Revolving
Credit Advance was to have been made, purchase from the Swing Line Bank an
undivided participating interest in the Refunded Swing Line Advance in an
amount equal to its Percentage of such Refunded Swing Line Advance. Each Bank
will immediately transfer to the Agent, in immediately available funds, the
amount of its participation and upon receipt thereof the Agent will deliver
to such Bank a Swing Line Bank Participation Certificate in the form of
Exhibit F dated the date of receipt of such funds and in such amount.
(c) Each Bank's obligation to make Revolving Credit Advances and to
purchase participation interests in accordance with clauses (a) and (b) above
shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against Swing
Line Bank, the Company or any other Person for any reason whatsoever; (ii)
the occurrence or continuance of any Default or Event of Default; (iii) any
adverse change in the condition (financial or otherwise) of the Company or
any other Person; (iv) any breach of this Agreement by
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the Company or any other Person; (v) any inability of the Company to satisfy
the conditions precedent to borrowing set forth in this Agreement on the date
upon which such participating interest is to be purchased or (vi) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. If any Bank does not make available to the Agent the amount
required pursuant to clause (a) or (b) above, as the case may be, the Agent
shall be entitled to recover such amount on demand from such Bank, together
with interest thereon for each day from the date of non-payment until such
amount is paid in full at the Federal Funds Effective Rate for the first two
Business Days and at the Alternate Base Rate thereafter.
5. [RESERVED]
6. CONDITIONS.
The obligations of Banks to make Advances or issue Letters of Credit
pursuant to this Agreement are subject to the following conditions:
6.1 EXECUTION OF LOAN DOCUMENTS. Company shall have executed and
delivered to Agent for the account of each Bank, the Revolving Credit Notes,
the Swing Line Note and this Agreement (including all schedules, exhibits,
certificates, opinions, financial statements and other documents to be
delivered pursuant hereto), and, as applicable, the Loan Documents, and such
Revolving Credit Notes, Swing Line Note, the Loan Documents and this
Agreement shall be in full force and effect.
6.2 CORPORATE AUTHORITY. Agent shall have received, with a counterpart
thereof for each Bank: (i) certified copies of resolutions of the Board of
Directors of Company and each Guarantor evidencing approval of the Loan
Documents to which each such Person is a party and authorizing the execution
and delivery thereof and the borrowing hereunder, as applicable; and (ii) (A)
certified copies of Company's, and each Guarantor's certificate of
incorporation and bylaws or other constitutional documents certified as true
and complete as of a recent date by the appropriate official of the
jurisdiction of incorporation of Company and each Guarantor; and (B) a
certificate of good standing from the state or other jurisdictions of
Company's and each Guarantor's incorporation, and from every state or other
jurisdiction in which Company and each Guarantor is qualified to do business.
6.3 REAFFIRMATION OF LOAN DOCUMENTS. Each of the Company, the Parent
and each of the Guarantors shall have executed the Reaffirmation of Loan
Documents, substantially in the form of Exhibit O (the "Reaffirmation of Loan
Documents").
6.4 LICENSES, PERMITS, ETC. The Agent shall have received,
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with a counterpart for each Bank, copies of each authorization, license,
permit, consent, order or approval of, or registration, declaration or filing
with, any governmental authority or any securities exchange or other person
(including without limitation any securities holder) obtained or made by the
Company, any of its Subsidiaries, or any other Person (as of the relevant
date of Advance or loan hereunder) in connection with the transactions
contemplated by this Agreement or the Loan Documents.
6.5 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Company or any other party to any of the Loan Documents (excluding
the Agent and Banks) under this Agreement or any of the Loan Documents, and
the representations and warranties of any of the foregoing which are
contained in any certificate, document or financial or other statement
furnished at any time hereunder or thereunder or in connection herewith or
therewith shall have been true and correct in all material respects when made
and shall be true and correct in all material respects on and as of the date
of the making of any Advance hereunder.
6.6 COMPLIANCE WITH CERTAIN DOCUMENTS AND AGREEMENTS. The Company shall
have performed and complied with all agreements and conditions contained in
this Agreement, the Loan Documents, or any agreement or other document
executed thereunder and required to be performed or complied with by Company
(as of the applicable date) and Company shall not be in default in the
performance or compliance with any of the terms or provisions hereof or
thereof.
6.7 INTERCREDITOR AGREEMENT. The Agent shall have received a revised
Schedule 1 (List of Security Documents and Guaranties) to the Intercreditor
Agreement, in form and substance satisfactory to the Agent and each of the
Banks.
6.8 NO DEFAULT. No Default or Event of Default shall have occurred and
be continuing, and since June 30, 1996 there shall have been no material
adverse change in the financial condition, properties, business, prospects
of, results or operations of the Company and its Subsidiaries.
6.9 COMPANY'S CERTIFICATE. The Agent shall have received, with a signed
counterpart for each Bank, a certificate of a responsible senior officer of
Company dated the date of the making of Advances hereunder, stating that to
the best of his or her knowledge after due inquiry, the conditions of
Sections 6.1, 6.5 through 6.8 and 6.12 hereof have been fully satisfied.
6.10 PAYMENT OF FEES. Company shall have paid to the Agent all fees,
costs and expenses required hereunder to be paid to Agent upon execution of
this Agreement.
6.11 OTHER DOCUMENTS AND INSTRUMENTS. The Agent shall have received, with
a photocopy for each Bank, such other instruments
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and documents as each of the Banks may reasonably request in connection with
the making of loans hereunder, and all such instruments and documents shall
be satisfactory in form and substance to the Banks.
6.12 CONTINUING CONDITIONS. The obligations of the Banks to make Advances
under this Agreement shall be subject to the continuing conditions that all
documents executed or submitted pursuant hereto shall be satisfactory in form
and substance (consistent with the terms hereof) to Agent and its counsel and
to each of the Banks; Agent and its counsel and each of the Banks and their
respective counsel shall have received all information, and such counterpart
originals or such certified or other copies of such materials, as Agent or
its counsel and each of the Banks and their respective counsel may reasonably
request; and all other legal matters relating to the transactions
contemplated by this Agreement (including, without limitation, matters
arising from time to time as a result of changes occurring with respect to
any statutory, regulatory or decisional law applicable hereto) shall be
satisfactory to counsel to Agent and counsel to each of the Banks.
7. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and warranties
shall be deemed to be continuing representations and warranties until the
Revolving Credit Maturity Date and thereafter until final payment in full of
the Indebtedness, expiration of all Letters of Credit and performance by
Company of all other obligations under this Agreement and the other Loan
Documents:
7.1 DUE AUTHORIZATION--COMPANY. Company and each of its Subsidiaries is
a corporation duly organized and existing in good standing under the laws of
the jurisdiction of its incorporation; Company and each of its Subsidiaries
is in good standing in each jurisdiction in which it is required to be
qualified to do business; execution, delivery and performance of this
Agreement and other documents and instruments required under this Agreement,
and the issuance of the Notes by Company are within its corporate powers,
have been duly authorized, are not in contravention of law or the terms of
Company's Articles of Incorporation or Bylaws, and do not require the consent
or approval of any governmental body, agency or authority; and this Agreement
and other documents and instruments required under this Agreement and Notes,
when issued and delivered, will be valid and binding on the Company in
accordance with their terms.
7.2 DUE AUTHORIZATION--GUARANTORS. Execution, delivery and performance
of the documents executed and delivered by the Guarantors in connection with
this Agreement are within their corporate powers, have been duly authorized
by the Guarantors, are not in contravention of law or the Articles of
Incorporation or Bylaws of the Guarantors or any unwaived terms of any
indenture,
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agreement or undertaking to which any Guarantor is a party or by
which it is bound, do not require the consent or approval of any governmental
body, agency or authority, and when issued and delivered, will be valid and
binding on the Guarantors in accordance with their terms.
7.3 NON-CONTRAVENTION. The execution, delivery and performance of this
Agreement and any other documents and instruments required under this
Agreement, and the issuance of the Notes by Company are not in contravention
of the unwaived terms of any indenture, agreement or undertaking to which
Company is a party or by which it is bound.
7.4 NO LITIGATION. Except as set forth in Schedule 7.4 annexed hereto,
no litigation or other proceeding before any court or administrative agency
is pending, or to the knowledge of the officers of Company is threatened
against Company or any Subsidiary, the outcome of which would reasonably be
expected to materially impair Company's or any Subsidiary's financial
condition or the ability of Company or any Subsidiary to carry on its
business.
7.5 ENCUMBRANCES. There are no security interests in, liens, mortgages,
or other encumbrances on any of Company's or any Subsidiary's assets, except
Permitted Encumbrances.
7.6 ERISA. Neither Company nor any Subsidiary maintains or contributes
to any employee pension benefit plan subject to title IV of the "Employee
Retirement Income Security Act of 1974" (herein called "ERISA"), except those
set forth in attached Exhibit J. There was no unfunded past service liability
of any pension plan maintained by the Company or any Subsidiary as of
September 30, 1995, and there is no accumulated funding deficiency within the
meaning of ERISA, or any existing material liability with respect to any
pension plan owed to the Pension Benefit Guaranty Corporation ("PBGC") or any
successor thereto, except any funding deficiency for which an application to
the PBGC for waiver is pending or for which a waiver has been granted by the
PBGC.
7.7 FINANCIAL STATEMENTS. The financial statements of the Company and
Guarantors dated June 30, 1996, previously furnished Agent and the Banks,
fairly present in all material respects the financial condition of the
Company and Guarantors as of such date; since said date there has been no
material adverse change in the financial condition of Company and the
Guarantors (taken as a whole); to the best of the knowledge of Company's
officers, neither Company nor any Guarantor has any material contingent
obligations (including any liability for taxes) not disclosed by or reserved
against in said balance sheet, and at the present time there are no material
unrealized or anticipated losses from any present commitment of Company or
any Guarantor.
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7.8 FINANCIAL PROJECTIONS. The financial projections previously
furnished by Company to Agent and the Banks, the receipt of which Agent and
the Banks acknowledge, were as of the date thereof and are as of the date of
execution of this Agreement, based upon the good faith belief of the
management of Company, reasonable in all material respects taking into
account all facts and information known to or reasonably available to Company.
7.9 TAX RETURNS. All tax returns and tax reports of Company and each
Subsidiary required by law to have been filed have been duly filed or
extensions obtained, and all taxes, assessments and other governmental
charges or levies (other than those presently payable without penalty and
those currently being contested in good faith for which adequate reserves
have been established) upon Company or any Subsidiary (or any of its
properties) which are due and payable have been paid for which the failure to
pay would materially adversely affect its business or the value of its
property or assets (taken as a whole). The charges, accruals and reserves on
the books of Company and its Subsidiaries in respect of the Federal income
tax for all periods are adequate in the opinion of Company.
7.10 SUBSIDIARIES. There are no Subsidiaries of Company, except the
Guarantors.
7.11 COMPLIANCE WITH LAWS. Except as set forth in SCHEDULE 7.11:
(a) Company and its Subsidiaries are, in the conduct of their
business, in compliance in all material respects with all federal, state or
local laws, statutes, ordinances and regulations applicable to any of them,
the enforcement of which, if Company or any Subsidiary were not in
compliance, would reasonably be expected to materially adversely affect its
business or the value of its property or assets (taken as a whole). Company
and its Subsidiaries have all approvals, authorizations, consents, licenses,
orders and other permits of all governmental agencies and authorities,
whether federal, state or local, required to permit the operation of their
business as presently conducted, except such approvals, authorizations,
consents, licenses, orders and other permits with respect to which the
failure to have would reasonably be expected to materially adversely affect
its business or the value of its property or assets (taken as a whole).
(b) Neither Company nor any Subsidiary is a party to any litigation
or administrative proceeding, nor so far as is known by Company is any
litigation or administrative proceeding threatened against Company or any
Subsidiary, the outcome of which would reasonably be expected to have a
material adverse effect on the Company and the Subsidiaries (taken as a
whole) which in either case (i) asserts or alleges that Company or any
Subsidiary violated Hazardous Material Laws, (ii) asserts or alleges that
Company or
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any Subsidiary is required to clean up, remove, or take remedial or other
response action due to the disposal, depositing, discharge, leaking or other
release of any hazardous substances or materials, (iii) asserts or alleges
that Company or any Subsidiary is required to pay all or a portion of the
cost of any past, present, or future cleanup, removal or remedial or other
response action which arises out of or is related to the disposal,
depositing, discharge, leaking or other release of any hazardous substances
or materials by Company or any Subsidiary.
(c) Neither Company nor any Subsidiary is subject to any judgment,
decree, order or citation related to or arising out of applicable Hazardous
Material Laws which would reasonably be expected to materially adversely
affect its business or the value of its property or assets (taken as a whole)
and to the best knowledge of the Company, neither Company nor any Subsidiary
has been named or listed as a potentially responsible party by any
governmental body or agency in a matter arising under any applicable
Hazardous Material Laws which would reasonably be expected to materially
adversely affect its business or the value of its property or assets (taken
as a whole).
(d) To the best of Company's knowledge, Company and its
Subsidiaries have all permits, licenses and approvals required under
applicable Hazardous Material Laws, the failure of which to have would have a
material adverse effect on the operation of their respective businesses as
presently conducted and as proposed to be conducted (taken as a whole).
7.12 NO INVESTMENT COMPANY OR MARGIN STOCK. Neither Company nor any of
its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. Neither Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities,
directly or indirectly, in the business of extending credit for the purpose
of purchasing or carrying margin stock, and none of the proceeds of any of
the loans hereunder will be used, directly or indirectly, for any purpose
which would violate the provisions of Regulation U or X of the Board of
Governors of the Federal Reserve System. Terms for which meanings are
provided in Regulation U of the Board of Governors of the Federal Reserve
System or any regulations substituted therefor, as from time to time in
effect, are used in this paragraph with such meanings.
7.13 GOOD TITLE--COMPANY. The Company has good and valid title to the
property owned by it, which property (individually or in the aggregate) is
material to the business or operations of the Company and its Subsidiaries,
taken as a whole, excluding imperfections in title not material to the
ownership, use and/or enjoyment of any such property.
7.14 GOOD TITLE--GUARANTORS. Each Guarantor has good and valid
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title to the property owned by it, which property (individually or in the
aggregate) is material to the business or operations of the Company and its
Subsidiaries, taken as a whole, excluding imperfections in title not material
to the ownership, use and/or enjoyment of any such property.
7.15 CONVERTIBLE NOTES. The Convertible Notes have not been amended,
restated, supplemented or replaced, have not been paid in full or cancelled,
and remain outstanding obligations of Company in accordance with their terms.
8. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, and, as applicable, it will
cause each of its Subsidiaries, until the Revolving Credit Maturity Date and
thereafter until expiration of all Letters of Credit and final payment in
full of the Indebtedness and the performance by Company of all other
obligations under this Agreement and the other Loan Documents:
8.1 REPORTING REQUIREMENTS. Furnish Agent with copies for each Bank:
(a) within one hundred twenty (120) days after and as of the end of each
fiscal year of Parent, a detailed audit report of Parent and its
consolidated Subsidiaries certified by independent certified public
accountants satisfactory to Agent and the Banks;
(b) within fifty-five (55) days after and as of the end of each fiscal
quarter of Parent, excluding the last fiscal quarter of each year, a
copy of Parent's quarterly 10-Q Reports, and as soon as practical
after filing with the Securities and Exchange Commission ("SEC"),
copies of all other documents filed by Parent with the SEC;
(c) [Reserved];
(d) as soon as possible, and in any event within three Business Days after
becoming aware of the occurrence of any Default or Event of Default or
any other event or occurrence which has or would reasonably be
expected to have a materially adverse effect upon the business,
property or financial condition of Company and its Subsidiaries (taken
as a whole), or upon Company's or any Guarantor's ability to comply
with its obligations hereunder or under any of the other Loan
Documents, a written statement of a responsible senior officer of the
Company setting forth details of such Default, Event of Default or
other event or occurrence and the action which the Company has taken
or has caused to be taken or proposes to take or cause to be taken
with respect
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thereto;
(e) promptly, and in any event within ten (10) calendar days after
becoming aware (i) of any material adverse change in the financial
condition of the Company or any of its Subsidiaries, a certificate of
the chief financial officer of Company (or in such officer's absence,
a responsible senior officer) setting forth the details of such change
or (ii) of the taking by the Internal Revenue Service of a tax
position (verbal or written) which could have a materially adverse
effect upon the Company (or any tax position taken by the Company)
setting forth the details of such position and the financial impact
thereof; and
(f) promptly, and in form to be satisfactory to Agent and Banks, such
other information as Agent and Banks may reasonably request from time
to time.
8.2 TAXES. Pay and discharge, and cause each of its Subsidiaries to pay
and discharge, all taxes and other governmental charges, and all contractual
obligations calling for the payment of money, before the same shall become
overdue, unless and to the extent only that such payment is being contested
in good faith.
8.3 INSURANCE. Maintain, and cause each of its Subsidiaries to maintain,
insurance coverage on their physical assets and against other business risks
in such amounts and of such types as are customarily carried by companies
similar in size and nature, and in the event of acquisition of additional
property, real or personal, or of incurrence of additional risks of any
nature, increase such insurance coverage in such manner and to such extent as
prudent business judgment and present practice would dictate; and in the case
of all policies covering property mortgaged or pledged to Agent or the Banks
or property in which Agent or the Banks shall have a security interest of any
kind whatsoever, other than those policies protecting against casualty
liabilities to strangers, all such insurance policies shall provide that the
loss payable thereunder shall be payable to Company (or a Subsidiary, as
applicable) and Agent for the benefit of the Banks (as mortgagee) as their
respective interests may appear, all said policies or copies thereof,
including all endorsements thereon and those required hereunder, to be
deposited with Agent.
8.4 INSPECTIONS. Permit, and cause each of its Subsidiaries to permit,
Agent and each Bank, through their authorized attorneys, accountants and
representatives, to examine Company's and each Subsidiary's books, accounts,
records, ledgers and assets of every kind and description within five (5)
days after oral or written request of Agent or such Bank, which shall include
but shall not be limited to audits of Company and its Subsidiaries conducted
by Agent or any Bank. Each such examination and audit commenced or
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conducted during the continuation of an Event of Default shall be at
Company's own cost and expense.
8.5 NOTICES. Promptly notify Agent of any Default or Event of Default,
and promptly inform Agent of the existence or occurrence of any condition or
event (other than conditions having an effect on the economy in general)
which could have a material adverse effect upon Company's or any Subsidiary's
financial condition.
8.6 GOVERNMENT APPROVALS. Maintain, and cause each of its Subsidiaries
to maintain, in good standing all licenses required by the State of Michigan,
the State of Indiana or the Commonwealth of Kentucky (as applicable) or any
agency thereof, or other governmental authority that may be necessary or
required for Company and its Subsidiaries to carry on their general business
objects and purposes.
8.7 [RESERVED].
8.8 COMPLIANCE WITH ERISA. Comply, and cause each of its Subsidiaries to
comply, with all material requirements imposed by ERISA as presently in
effect or hereafter promulgated, including but not limited to, the minimum
funding requirements of any Pension Plan.
8.9 ERISA NOTICES. Promptly notify Agent after the occurrence thereof in
writing of any of the following events:
(a) the termination of a Pension Plan pursuant to Subtitle C of Title IV
of ERISA or otherwise;
(b) the appointment of a trustee by a United States District Court to
administer a Pension Plan;
(c) the commencement by the Pension Benefit Guaranty Corporation, or any
successor thereto of any proceeding to terminate a Pension Plan;
(d) the failure of a Pension Plan to satisfy the minimum funding
requirements for any plan year as established in Section 412 of the
Internal Revenue Code of 1954, as amended or any similar provision
under the Internal Revenue Code of 1986, as amended;
(e) the withdrawal of Company or any Subsidiary from a Pension Plan; or
(f) a reportable event, within the meaning of Title IV of ERISA.
8.10 COVENANT COMPLIANCE REPORTS. Furnish to Agent, concurrently with the
delivery of each of the 10Q Reports required
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by Section 8.1(b) hereof and within fifty five (55) days after the end of
each of Parent's fiscal years, a Covenant Compliance and Interest Rate
Adjustment Report prepared and certified by the chief financial officer of
Company (or in such officer's absence, the corporate controller of Company)
(a) setting forth all computations necessary to show compliance by Company
with the financial covenants contained in Sections 8.11 through 8.14 hereof,
(b) stating that as of the date thereof, no Default or Event of Default
hereunder has occurred and is continuing, or if any such event or condition
has occurred and is continuing or exists, specifying in detail the nature and
period of existence thereof and any action taken with respect thereto taken
or contemplated to be taken by Company or a Subsidiary, as applicable, and
(c) stating that the signer has personally reviewed this Agreement and that
such certificate is based on an examination sufficient to assure that such
certificate is accurate.
8.11 MAINTAIN CONSOLIDATED NET WORTH. Maintain at all times a
Consolidated Net Worth of not less than the Minimum Consolidated Net Worth.
'Minimum Consolidated Net Worth' initially shall mean Eighty-Five Million
Dollars ($85,000,000). On December 31 of each year, commencing December 31,
1996, the Minimum Consolidated Net Worth shall be increased (but not
decreased) by an amount equal to fifty percent (50%) of Consolidated Net
Income (but not loss) for the fiscal year ending on such date. In addition,
on the date of any Equity Transaction, Minimum Consolidated Net Worth shall
increase by an amount equal to one hundred percent (100%) of Net Proceeds
from Equity Transactions related to such Equity Transaction."
8.12 MAINTAIN MAXIMUM LEVERAGE RATIO. Maintain at all times a Maximum
Leverage Ratio of not more than .55 to 1.0
8.13 MAINTAIN INTEREST COVERAGE RATIO. Maintain as of the end of each
fiscal quarter of Company an Interest Coverage Ratio of not less than 3.0 to
1.0.
8.14 MAINTAIN CASHFLOW LEVERAGE RATIO. Maintain at all times a Cashflow
Leverage Ratio of not more than 3.5 to 1.0.
8.15 ENVIRONMENTAL COMPLIANCE.
(a) Company shall comply, and cause its Subsidiaries to comply,
with all applicable Hazardous Material Laws except for such non-compliance
which would reasonably not be expected to materially adversely affect its
business or the value of its property or assets (taken as a whole).
(b) Company shall provide to Agent, promptly upon receipt, copies
of any correspondence, notice, pleading, citation, indictment, complaint,
order, decree, or other document from any source asserting or alleging a
circumstance or condition which
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requires or may require a financial contribution by Company or any Subsidiary
to a cleanup, removal, remedial action, or other response by or on the part
of Company or any Subsidiary under applicable Hazardous Material Laws or
which seeks damages or civil, criminal or punitive penalties from Company or
any Subsidiary for an alleged violation of Hazardous Material Laws, where
such contribution, response or damages would reasonably be expected to
materially adversely affect its business or the value of its property or
assets (taken as a whole).
(c) Company shall promptly notify Agent in writing as soon as
Company becomes aware of the occurrence or existence of any condition or
circumstance which makes the environmental warranties contained in this
Agreement incomplete or inaccurate in any material respect as of any date.
(d) In the event of any condition or circumstance that makes any
environmental warranty, representation and/or agreement incomplete or
inaccurate in any material respect as of any date, Company shall, at the
reasonable request of Agent, at its sole expense, retain an environmental
consultant, reasonably acceptable to Agent and the Banks, to conduct a
thorough and complete investigation regarding the changed condition and/or
circumstance. A copy of the environmental consultant's report will be
promptly delivered to Agent, and Company upon completion.
(e) At any time Company or any Subsidiary, directly or indirectly
through any environmental consultant or other representative, determines to
undertake an environmental audit, assessment or investigation relating to any
fact, event or condition which would reasonably be expected to materially
adversely affect its business or the value of its property or assets (taken
as a whole), Company shall promptly provide Agent with written notice of the
initiation of the environmental audit, fully describing the purpose and
intended scope of the environmental audit. Upon receipt, Company will
promptly provide to Agent copies of all final findings and conclusions of any
such environmental investigation.
(f) Company hereby indemnifies, saves and holds Agent and each of
the Banks and any of their respective past, present and future officers,
directors, shareholders, employees, representatives and consultants harmless
from any and all loss, damages, suits, penalties, costs, liabilities and
expenses (including but not limited to reasonable investigation,
environmental audit(s), and legal expenses) arising out of any claim, loss or
damage of any property, injuries to or death of persons, contamination of or
adverse affects on the environment, or any violation of any applicable
Hazardous Material Laws, caused by or in any way related to any property
owned or operated by Company or any Subsidiary, or due to any acts of Company
or any Subsidiary or such person's, officers, directors, shareholders,
employees,
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consultants and/or representatives; provided, however, that the foregoing
indemnification shall not be applicable when arising from events or
conditions occurring while Agent is in sole possession (subject to the rights
of any creditors of Company) of such property. In no event shall Company be
liable hereunder for any loss, damages, suits, penalties, costs, liabilities
or expenses arising from any act of gross negligence of Agent or any of the
Banks, or any such Person's agents or employees.
It is expressly understood and agreed that the indemnifications granted
herein are intended to protect Agent and each of the Banks, their respective
past, present and future officers, directors, shareholders, employees,
consultants and representatives from any claims that may arise by reason of
the security interest, liens and/or mortgages granted to Agent and each of
the Banks, or under any other document or agreement given to secure repayment
of any indebtedness from Company, whether or not such claims arise before or
after Agent has foreclosed upon and/or otherwise become the owner of any such
property. All obligations of indemnity as provided hereunder shall be secured
by the collateral documents until payment in full of all indebtedness of
Company to the Banks, unless there is a then known violation of the Hazardous
Material Laws and Agent or any of the Banks has asserted in writing a claim
for indemnification from Company, in which event the same shall continue
until the violation is remediated.
It is expressly agreed and understood that the provisions hereof shall
and are intended to be continuing and shall survive the repayment of the
Indebtedness.
(g) Company and its Subsidiaries shall maintain all permits,
licenses and approvals required under applicable Hazardous Material Laws
except such permits, licenses and approvals the failure of which to have
would reasonably not be expected to materially adversely affect its business
or the value of its property or assets (taken as a whole).
8.16 SUBSIDIARIES; GUARANTIES. With respect to each Person which becomes
a Subsidiary subsequent to the date of this Agreement, within ten days of the
date of a new Subsidiary is created or acquired, as the case may be, cause
each such Subsidiary to execute and deliver to Agent, for and on behalf of
each of the Banks, joinder agreements in the form attached as Exhibit A to
each of the Guaranties whereby each Subsidiary becomes obligated as a
Guarantor under the Guaranties, together with such supporting documentation,
including without limitation corporate authority, items, certificates and
opinions of counsel, as reasonably required by Agent and the Majority Banks.
8.17 AMENDMENT OF SENIOR DEBT DOCUMENTS. Upon any amendments,
modifications or alterations of the Senior Debt Documents, promptly (but no
later than five (5) Business Days
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following the effective date thereof) notify Agent of the occurrence thereof,
furnishing Agent with copies of all such amendments, modifications or
alterations. If the Majority Banks shall determine, in their sole discretion,
that any such amendment, modification or alteration contains any new
covenant, or makes any existing covenant in the Senior Debt Documents more
restrictive than the covenants contained in this Agreement, Company shall
forthwith upon demand by Majority Banks enter into such amendments or
modifications of this Agreement as reasonably determined by the Majority
Banks to be necessary to make this Agreement (and the covenants contained
herein) more restrictive than such documents in proportion to the levels of
restrictions existing immediately prior to such amendment, modification or
alteration to the Senior Debt Documents.
9. NEGATIVE COVENANTS
Company covenants and agrees that, until the Revolving Credit Maturity
Date and thereafter until expiration of all Letters of Credit and final
payment in full of the Indebtedness and the performance by Company of all
other obligations under this Agreement and the other Loan Documents, it will
not, and will not permit its Subsidiaries to, without the prior written
consent of the Majority Banks:
9.1 CAPITAL STRUCTURE AND REDEMPTIONS. Purchase, acquire, issue or
redeem any of its capital stock or make any material change in its capital
structure, except for redemptions of stock of Parent owned by employees of
Company or any Subsidiary.
9.2 MERGERS OR DISPOSITIONS. Except as permitted under Section 9.5
hereof enter into any merger or consolidation or sell, lease, transfer, or
dispose of all, substantially all, or any material part of its assets.
9.3 GUARANTIES. Guarantee, endorse, or otherwise become secondarily
liable for or upon the obligations of others, except (a) by endorsement for
deposit in the ordinary course of business, (b) guaranties in favor of Agent
and the Banks, (c) the Letter of Credit Guaranty, (d) the Letter of Credit
Guaranty (Kentucky), (e) unsecured guaranties by Company or one or more
Subsidiaries of indebtedness of the Company or one or more Subsidiaries, (f)
the Permitted Guaranties and (g) indemnification obligations arising under
the Underwriting Agreement.
9.4 INDEBTEDNESS. Become or remain obligated for any indebtedness for
borrowed money, or for any indebtedness incurred in connection with the
acquisition of any property, real or personal, tangible or intangible, except:
(a) the Indebtedness;
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(b) current unsecured trade payables and accrued liabilities arising in
the ordinary course of Company's or any Subsidiary's business,
deferred income tax and purchase accounting reserves;
(c) indebtedness described in attached SCHEDULE 9.4;
(d) unsecured indebtedness of Company to a Guarantor or a Guarantor to
another Guarantor or a Guarantor to Company;
(e) other unsecured indebtedness (excluding indebtedness evidenced by the
Acquisition Note) not exceeding $5,000,000 in the aggregate at any
time outstanding;
(f) indebtedness incurred under the bond loan agreements executed and
delivered in connection with the issuance of the Kentucky Bonds and
the Indiana Bonds;
(g) indebtedness incurred under the Bond Reimbursement Agreements;
(h) the Senior Debt and any renewals or refinancing of the Senior Debt in
amounts not exceeding the original principal amount thereof (less any
required amortization according to the terms thereof), on
substantially the same terms as the Senior Debt;
(i) unsecured indebtedness of Company to MascoTech, Inc. evidenced by the
Acquisition Note;
(j) the Earnout Amount (as defined in the Acquisition Agreement);
(k) indebtedness incurred in connection with Hedging Transactions; and
(l) the Permitted Guaranties.
9.5 ACQUISITIONS. Purchase or otherwise acquire or become obligated for
the purchase of all or substantially all of the assets or business interests
of any person, firm or corporation or any shares of stock of any corporation,
trusteeship or association or in any other manner effectuate or attempt to
effectuate an expansion of present business by acquisition, PROVIDED,
however, the foregoing restriction shall not apply to the purchase by Company
or a Guarantor of all or substantially all of the assets or all of the stock
of a Person if after giving effect to such acquisition no Default or Event of
Default exists.
9.6 INVESTMENTS. Make or allow to remain outstanding any investment
(whether such investment shall be of the character of investment in shares of
stock, evidences of indebtedness or other
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securities or otherwise) in, or any loans or advances or extensions of credit
to, any person, firm, corporation or other entity or association, except:
(a) Company's investment in the Guarantors;
(b) loans and advances permitted under Section 9.4(d) hereof;
(c) investments (other than loans or advances) by a Guarantor in another
Guarantor or a Guarantor in Company;
(d) investments of surplus cash in cash equivalents described on Schedule
9.6(d);
(e) loans to management employees made to enable them to purchase an
equity interest in Company not to exceed $1,000,000 in aggregate
amount at any time outstanding;
(f) sales on open account or in the ordinary course of business;
(g) loans to tooling vendors evidenced by notes receivable not exceeding
$5,000,000 in the aggregate;
(h) other loans, advances and investments not exceeding $250,000 in the
aggregate at any time outstanding; and
(i) deposits made in the ordinary course of business in order to obtain
goods and services.
9.7 LIENS. Affirmatively pledge or mortgage any of its assets, whether
now owned or hereafter acquired, or create, suffer or permit to exist any
lien, security interest in, or encumbrance thereon, except:
(a) the Permitted Encumbrances;
(b) liens described in attached SCHEDULE 9.7; and
(c) liens and security interests upon fixed assets acquired by Company or
a Subsidiary after the date of this Agreement (including by virtue of
a Capital Lease) provided that (i) any such lien or security interest
is created solely for the purpose of securing indebtedness
representing, or incurred to finance, the cost of the item of property
subject thereto; (ii) the principal amount of the indebtedness secured
by such lien is initially at least 70% and does not exceed 100% of the
fair value of the property at the time it was acquired, (iii) the lien
or security interest does not cover any other property other than such
item of property, and (iv) the incurrence of the indebtedness secured
by such lien
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or security interest is permitted by Section 9.4 hereof.
9.8 ACCOUNTS RECEIVABLE. Sell, assign, transfer or confer a security
interest in any account, contract, note, trade acceptance or other
receivable.
9.9 BUSINESS PURPOSES. Materially alter the character of its businesses
from that conducted as of the date of this Agreement.
9.10 DIVIDENDS. Declare or pay any dividends or make any other
distribution upon its shares of capital stock, except (a) dividends payable
in the capital stock of Company, (b) dividends by Guarantors to Company, (c)
dividends by Company to Parent (i) to allow Parent to pay audit fees and
expenses, franchise taxes and the regularly scheduled payments of interest
due to the holders of the Convertible Notes, in an aggregate amount not
exceeding $750,000 during any single fiscal year of Company, and (ii) to
allow Parent to pay federal, state and local income taxes which are
attributable to Company and its consolidated Subsidiaries, provided that in
each such case both immediately before such dividend is declared or paid and
after giving effect thereto, no Default or Event of Default has occurred and
is continuing.
9.11 NO FURTHER NEGATIVE PLEDGES. Enter into or become subject to any
agreement (other than loan documents evidencing or otherwise related to the
Senior Debt) (i) prohibiting the guaranteeing by the Company or any
Subsidiary of any obligations, (ii) prohibiting the creation or assumption of
any lien or encumbrance upon the properties or assets of the Company or any
Subsidiary, whether now owned or hereafter acquired, or (iii) requiring an
obligation to become secured (or further secured) if another obligation is
secured or further secured.
9.12 TRANSACTIONS WITH AFFILIATES. Enter into any transaction or series
of transactions with any Affiliate other than on terms and conditions as
favorable to Company or the Subsidiary (as applicable) as would be obtainable
in a comparable arm's-length transaction with a Person other than an
Affiliate except transactions between Company and any wholly owned
Subsidiary, provided, however, nothing contained in this Section 9.12 shall
be deemed or construed to prohibit Company from paying reasonable fees and
expenses to Hidden Creek Industries, a New York partnership, for rendering of
financial and consulting services to Company in an amount not to exceed
$2,000,000 in any fiscal year. Nothing contained in this Section 9.12 shall
be deemed to prohibit the Parent Letter Agreement.
10. DEFAULTS
10.1 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an Event of Default hereunder:
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(a) non-payment when due of (i) the principal or interest under any
of the Notes issued hereunder in accordance with the terms thereof, (ii)
any reimbursement obligation under Section 3.6 hereof, or (iii) any Fees;
(b) default in the observance or performance of any of the
conditions, covenants or agreements of Company set forth in Section 8.1(a),
(b) or (c), 8.3, 8.4, 8.5, 8.10 through 8.14, inclusive, 8.16, 9.1 through
9.5, inclusive, and 9.7 through 9.11, inclusive;
(c) default in the observance or performance of any of the other
conditions, covenants or agreements set forth in this Agreement by Company
and continuance thereof for a period of thirty (30) consecutive days;
(d) any representation or warranty made by Company herein or in any
instrument submitted pursuant hereto or by any other party to the Loan
Documents proves untrue or misleading in any material adverse respect when
made;
(e) default in the observance or performance of or failure to comply
with any of the conditions, covenants or agreements of Company or any
Guarantor set forth in any of the other Loan Documents, and the continuance
thereof beyond any period of grace or cure specified in any such document;
(f) default in the payment of any other obligation of Company or any
Guarantor for borrowed money in an aggregate amount in excess of Two
Hundred Fifty Thousand Dollars ($250,000), or in the observance or
performance of any conditions, covenants or agreements related or given
with respect to any obligations for borrowed money in an aggregate amount
in excess of Two Hundred Fifty Thousand Dollars ($250,000) sufficient to
permit the holder thereof to accelerate the maturity of such obligation,
unless such default is being contested in good faith by Company or
Guarantor, as applicable, and Company or such Guarantor has established
adequate reserves;
(g) the rendering of any judgment(s) for the payment of money in
excess of the sum of Two Hundred Fifty Thousand Dollars ($250,000)
individually or in the aggregate against Company or any of its
Subsidiaries, and such judgments shall remain unpaid, unvacated, unbonded
or unstayed by appeal or otherwise for a period of thirty (30) consecutive
days, except as covered by adequate insurance with a reputable carrier and
an action is pending in which an active defense is being made with respect
thereto;
(h) the occurrence of a "reportable event", as defined in ERISA,
which is determined to constitute grounds for
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termination by the Pension Benefit Guaranty Corporation of any Pension Plan
maintained or contributed to by or on behalf of the Company or any of its
Subsidiaries for the benefit of any of its employees or for the appointment
by the appropriate United States District Court of a trustee to administer
such Pension Plan and such reportable event is not corrected and such
determination is not revoked within thirty (30) days after notice thereof
has been given to the plan administrator of such Pension Plan (without
limiting any of Agent's or any Bank's other rights or remedies hereunder),
or the institution of proceedings by the Pension Benefit Guaranty
Corporation to terminate any such Pension Plan or to appoint a trustee by
the appropriate United States District Court to administer any such Pension
Plan;
(i) if (i) Onex Corporation and J2R Partners and their Affiliates
shall cease (x) to own in the aggregate at least ten percent (10%) of the
economic common equity interest of Parent and (y) to control in the
aggregate at least fifteen percent (15%) of the equity interest of Parent
having voting power for the election of a majority of the directors of
Parent, (ii) Parent shall cease to own one hundred percent (100%) of the
economic common equity interest of Company or (iii) Company shall cease to
own one hundred percent (100%) of the economic common equity interest of
Edgewood, Tower (Delaware), Tower (Indiana), Tower (Kentucky), or Trylon,
or Kalamazoo;
(j) if any other Person shall own thirty five percent (35%) or more
of the equity interest of Parent having voting power for the election of a
majority of the directors of Parent;
(k) any revocation of any of the Guaranties;
(l) the occurrence of an Event of Default (as defined in the Bond
Reimbursement Agreements) under any of the Bond Reimbursement Agreements;
(m) If a creditors' committee shall have been appointed for the
business of Company, any Subsidiary or any Guarantor in connection with any
bankruptcy or insolvency; or if Company, any Subsidiary or any Guarantor
shall have made a general assignment for the benefit of creditors or shall
have been adjudicated bankrupt, or shall have filed a voluntary petition in
bankruptcy or for reorganization or to effect a plan or arrangement with
creditors; or shall file an answer to a creditor's petition or other
petition filed against it, admitting the material allegations thereof for
an adjudication in bankruptcy or for reorganization; or shall have applied
for or permitted the appointment of a receiver, or trustee or custodian for
any of its property or assets; or such receiver,
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trustee or custodian shall have been appointed for any material part of
its property or assets (otherwise than upon application or consent of
Company, a Subsidiary or any Guarantor, as applicable) and such
receiver, trustee or custodian so appointed shall not have been
discharged within sixty (60) days after the date of his appointment
or if an order shall be entered and shall not be dismissed or
stayed within sixty (60) days from its entry, approving any
petition for reorganization of Company, any Subsidiary or any Guarantor.
10.2 EXERCISE OF REMEDIES. If an Event of Default has occurred and is
continuing hereunder: (v) the Agent shall, upon being directed to do so by the
Majority Banks, declare the Revolving Credit Aggregate Commitment terminated;
(w) the Agent shall, upon being directed to do so by the Majority Banks, declare
the entire unpaid principal Indebtedness, including the Notes, immediately due
and payable, without presentment, notice or demand, all of which are hereby
expressly waived by Company; (x) upon the occurrence of any Event of Default
specified in subsection 10.1(m), above, and notwithstanding the lack of any
declaration by Agent under preceding clause (w), the entire unpaid principal
Indebtedness, including the Notes, shall become automatically and immediately
due and payable, and the Revolving Credit Aggregate Commitment shall be
automatically and immediately terminated; (y) the Agent shall, upon being
directed to do so by the Majority Banks, demand immediate delivery of cash
collateral, and the Company and each Account Party agrees to deliver such cash
collateral upon demand, in an amount equal to the maximum amount that may be
available to be drawn at any time prior to the stated expiry of all outstanding
Letters of Credit, and (z) the Agent shall, if directed to do so by the Majority
Banks or the Banks, as applicable (subject to the terms hereof), exercise any
remedy permitted by this Agreement, the Loan Documents or law.
10.3 RIGHTS CUMULATIVE. No delay or failure of Agent and/or Banks in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Agent and Banks under this Agreement are cumulative and
not exclusive of any right or remedies which Banks would otherwise have.
10.4 WAIVER BY COMPANY OF CERTAIN LAWS. To the extent permitted by
applicable law, Company hereby agrees to waive, and does hereby absolutely and
irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on the Notes, or any security interest or
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mortgage contemplated by or granted under or in connection with this
Agreement. These waivers have been voluntarily given, with full knowledge of
the consequences thereof.
10.5 WAIVER OF DEFAULTS. No Event of Default shall be waived by the Banks
except in a writing signed by an officer of the Agent in accordance with Section
14.11 hereof. No single or partial exercise of any right, power or privilege
hereunder, nor any delay in the exercise thereof, shall preclude other or
further exercise of their rights by Agent or the Banks. No waiver of any Event
of Default shall extend to any other or further Event of Default. No forbearance
on the part of the Agent or the Banks in enforcing any of their rights shall
constitute a waiver of any of their rights. Company expressly agrees that this
Section may not be waived or modified by the Banks or Agent by course of
performance, estoppel or otherwise.
10.6 DEPOSITS AND ACCOUNTS. Upon the occurrence and during the continuance
of any Event of Default, each Bank may at any time and from time to time,
without notice to the Company (any requirement for such notice being expressly
waived by the Company) set off and apply against any and all of the obligations
of the Company now or hereafter existing under this Agreement, whether owing to
such Bank or any other Bank or the Agent, any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the credit or the account
of the Company and any property of the Company from time to time in possession
of such Bank, irrespective of whether or not such deposits held or indebtedness
owing by such Bank may be contingent and unmatured and regardless of whether any
collateral then held by Agent or any Bank is adequate to cover the Indebtedness.
Promptly following any such setoff, such Bank shall give written notice to Agent
and to Company of the occurrence thereof. The Company hereby grants to the Banks
and the Agent a lien on and security interest in all such deposits, indebtedness
and property as collateral security for the payment and performance of all of
the obligations of the Company under this Agreement. The rights of each Bank
under this Section 10.6 are in addition to the other rights and remedies which
such Bank may have.
11. PAYMENTS, RECOVERIES AND COLLECTIONS.
11.1 PAYMENT PROCEDURE. (a) All payments by Company of principal of, or
interest on, the Notes, or of Fees, shall be made without setoff or counterclaim
on the date specified for payment under this Agreement not later than 11:00 a.m.
(Detroit time) in immediately available funds to Agent, for the ratable account
of the Banks, at Agent's office located at One Detroit Center, Detroit, Michigan
48226-3289, (care of Agent's Eurodollar Lending Office, for Eurodollar-based
Advances). Upon receipt by the Agent of each such payment, the Agent shall make
prompt payment in like funds received to each Bank as appropriate, or, in
respect of
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Eurodollar-based Advances, to such Bank's Eurodollar Lending Office.
(b) Unless the Agent shall have been notified by Company prior to the
date on which any payment to be made by Company is due that Company does
not intend to remit such payment, the Agent may, in its sole discretion and
without obligation to do so, assume that the Company has remitted such
payment when so due and the Agent may, in reliance upon such assumption,
make available to each Bank on such payment date an amount equal to such
Bank's share of such assumed payment. If Company has not in fact remitted
such payment to the Agent each Bank shall forthwith on demand repay to the
Agent the amount of such assumed payment made available or transferred to
such Bank, together with the interest thereon, in respect of each day from
and including the date such amount was made available by the Agent to such
Bank to the date such amount is repaid to the Agent at a rate per annum
equal to (i) for Prime-based Advances, the Federal Funds Effective Rate
(daily average), as the same may vary from time to time, and (ii) with
respect to Eurodollar-based Advances, Agent's aggregate marginal cost
(including the cost of maintaining any required reserves or deposit
insurance and of any fees, penalties, overdraft charges or other costs or
expenses incurred by Agent) of carrying such amount.
(c) Subject to the definition of Interest Period, whenever any
payment to be made hereunder shall otherwise be due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall be included in computing interest, if
any, in connection with such payment.
(d) All payments to be made by the Company under this Agreement or
any of the Notes (including without limitation payments under the Swing
Line Note) shall be made without set-off or counterclaim, as aforesaid, and
without deduction for or on account of any present or future withholding or
other taxes of any nature imposed by any governmental authority or of any
political subdivision thereof or any federation or organization of which
such governmental authority may at the time of payment be a member, unless
Company is compelled by law to make payment subject to such tax. In such
event, Company shall:
(i) pay to the Agent for Agent's own account and/or, as the case
may be, for the account of the Banks (and, in the case of
Advances of the Swing Line, pay to the Swing Line Bank which
funded such Advances) such additional amounts as may be
necessary to ensure that the Agent and/or such Bank or Banks
receive a net amount
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equal to the full amount which would have been receivable had
payment not been made subject to such tax; and
(ii) remit such tax to the relevant taxing authorities according
to applicable law, and send to the Agent or the applicable
Bank (including the Swing Line Bank) or Banks, as the case
may be, such certificates or certified copy receipts as the
Agent or such Bank or Banks shall reasonably require as
proof of the payment by the Company, of any such taxes
payable by the Company.
As used herein, the terms "tax", "taxes" and "taxation" include all
existing taxes, levies, imposts, duties, charges, fees, deductions and
withholdings and any restrictions or conditions resulting in a charge together
with interest thereon and fines and penalties with respect thereto which may be
imposed by reason of any violation or default with respect to the law regarding
such tax, assessed as a result of or in connection with the transactions
hereunder, or the payment and or receipt of funds hereunder, or the payment or
delivery of funds into or out of any jurisdiction other than the United States
(whether assessed against Company, Agent or any of the Banks).
11.2 APPLICATION OF PROCEEDS. Notwithstanding anything to the contrary in
this Agreement, but subject to the Intercreditor Agreement (if then in effect),
after an Event of Default, the proceeds of any offsets or voluntary payments by
Company or any Guarantor or others and any other sums received or collected in
respect of the Indebtedness, shall be applied, first, to the Notes on a pro rata
basis (in such order and manner as determined by the Majority Banks; subject,
however, to the applicable Percentages of the Advances held by each of the
Banks), next, to any other Indebtedness on a PRO RATA basis, and then, if there
is any excess, to Company. The application of such proceeds and other sums to
the Revolving Credit Notes shall be based on each Bank's Percentage of the
aggregate of the Advances.
11.3 PRO-RATA RECOVERY. Subject to the Intercreditor Agreement (if then in
effect), if any Bank shall obtain any payment or other recovery (whether
voluntary, involuntary, by application of offset or otherwise) on account of
principal of, or interest on, any of the Revolving Credit Notes in excess of its
pro rata share of payments then or thereafter obtained by all Banks upon
principal of and interest on all Revolving Credit Notes, such Bank shall
purchase from the other Banks such participations in the Revolving Credit Notes
held by them as shall be necessary to cause such purchasing Bank to share the
excess payment or other recovery ratably in accordance with the Percentage with
each of them; provided, however, that if all or any portion of the excess
payment
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or other recovery is thereafter recovered from such purchasing holder, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
11.4 DEPOSITS AND ACCOUNTS. In addition to and not in limitation of any
rights of any Bank or other holder of any of the Notes under applicable law,
each Bank and each other such holder shall, upon acceleration of the
Indebtedness under the Notes and without notice or demand of any kind, have the
right to appropriate and apply to the payment of the Notes owing to it any and
all balances, credits, deposits, accounts or moneys of Company then or
thereafter with such Bank or other holder; provided, however, that any such
amount so applied by any Bank or other holder on any of the Notes owing to it
shall be subject to the provisions of Section 11.3, hereof.
12. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS; MARGIN ADJUSTMENTS.
12.1 REIMBURSEMENT OF PREPAYMENT COSTS. If Company makes any payment of
principal with respect to any Eurodollar-based Advance, or any Quoted Rate
Advance on any day other than the last day of the Interest Period applicable
thereto (whether voluntarily, by acceleration, or otherwise), or if Company
fails to borrow any Eurodollar-based Advance or Quoted Rate Advance after notice
has been given by Company to Agent in accordance with the terms hereof
requesting such Advance, or if Company fails to make any payment of principal or
interest in respect of a Eurodollar-based Advance, or any Quoted Rate Advance
when due, Company shall reimburse Agent and Banks, as the case may be on demand
for any resulting loss, cost or expense actually incurred by Agent and Banks, as
the case may be, as a result thereof, including, without limitation, any such
loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties, whether or not Agent and Banks, as the
case may be, shall have funded or committed to fund such Advance. Such amount
payable by Company to Agent and Banks, as the case may be may include, without
limitation, an amount equal to the excess, if any, of (a) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, refunded
or converted, for the period from the date of such prepayment or of such failure
to borrow, refund or convert, through the last day of the relevant Interest
Period, at the applicable rate of interest for said Advance(s) provided under
this Agreement, over (b) the amount of interest (as reasonably determined by
Agent and Banks, as the case may be) which would have accrued to Agent and
Banks, as the case may be on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market.
Calculation of any amounts payable to any Bank under this paragraph shall be
made as though such Bank shall have actually funded or committed to fund the
relevant Advance through the purchase of an underlying deposit in an amount
equal to the amount of such Advance and having a maturity comparable to the
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relevant Interest Period; provided, however, that any Bank may fund any
Eurodollar-based Advance, or any Quoted Rate Advance, as the case may be, in any
manner it deems fit and the foregoing assumptions shall be utilized only for the
purpose of the calculation of amounts payable under this paragraph. Upon the
written request of Company, Agent and Banks shall deliver to Company a
certificate setting forth the basis for determining such losses, costs and
expenses, which certificate shall be conclusively presumed correct, absent
manifest error.
12.2 AGENT'S EURODOLLAR LENDING OFFICE. For any Advance, if Agent shall
designate a Eurodollar Lending Office which maintains books separate from those
of the rest of Agent, Agent shall have the option of maintaining and carrying
the relevant Advance on the books of such Eurodollar Lending Office.
12.3 CIRCUMSTANCES AFFECTING EURODOLLAR-BASED RATE AVAILABILITY. If with
respect to any Interest Period, Agent or the Banks (after consultation with
Agent) shall determine that, by reason of circumstances affecting the interbank
markets generally, deposits in eurodollars in the applicable amounts are not
being offered to the Agent for such Interest Period, then Agent shall forthwith
give notice thereof to the Company. Thereafter, until Agent notifies Company
that such circumstances no longer exist, the obligation of Banks to make
Eurodollar-based Advances and the right of Company to convert an Advance to or
refund an Advance as a Eurodollar-based Advance shall be suspended, and the
Company shall repay in full the then outstanding principal amount of each such
Eurodollar-based Advance covered hereby together with accrued interest thereon,
any amounts payable under Section 12.1, hereof, and all other amounts payable
hereunder on the last day of the then current Interest Period applicable to such
Advance. Upon the date for repayment as aforesaid and unless Company notifies
Agent to the contrary within two (2) Business Days after receiving a notice from
Agent pursuant to this Section, such outstanding principal amount shall be
converted to a Prime-based Advance.
12.4 LAWS AFFECTING EURODOLLAR-BASED RATE AVAILABILITY. In the event that
any applicable law, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not currently applicable to any Bank or the
Agent or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by the Agent or any of the Banks (or any of their respective
Eurodollar Lending Offices) with any request or directive (whether or not having
the force of law) of any such authority, shall make it unlawful or impossible
for any of the Banks (or any of their respective Eurodollar Lending Offices) to
honor its obligations hereunder to make or maintain any Advance with interest at
the Eurodollar-based Rate, Agent shall so notify Company and the right of
Company to convert an Advance or refund an Advance as a Eurodollar-based
Advance, shall be suspended and thereafter Company
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may select as Applicable Interest Rates only those which remain available and
which are permitted to be selected hereunder, and if any of the Banks may not
lawfully continue to maintain an Advance to the end of the then current
Interest Period applicable thereto at the Eurodollar-based Rate, Company
shall immediately prepay such Advance, together with interest to the date of
payment, and any amounts payable under Sections 12.1 with respect to such
prepayment and the Applicable Interest Rate shall immediately be converted to
the Prime-based Rate.
12.5 INCREASED COSTS. In the event that any applicable law, rule or
regulation (whether domestic or foreign) now or hereafter in effect and whether
or not currently applicable to any Bank or the Agent or any interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Agent or any of the Banks with any request or directive (whether or not
having the force of law) made by any such authority, central bank or comparable
agency after the date hereof:
(a) shall subject the Agent or any of the Banks to any tax, duty or
other charge with respect to any Advance, or any Note or shall change the
basis of taxation of payments to the Agent or any of the Banks of the
principal of or interest on any Advance, or any Note or any other amounts
due under this Agreement in respect thereof (except for changes in the rate
of tax on the overall net income or revenues of the Agent or of any of the
Banks imposed by the United States of America or the jurisdiction in which
such Bank's principal executive office is located); or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by the Agent or any
of the Banks or shall impose on the Agent or any of the Banks or the
interbank markets any other condition affecting any Advance, or any of the
Notes;
and the result of any of the foregoing is to increase the costs to the Agent or
any of the Banks of making, funding or maintaining any part of the Indebtedness
hereunder with interest at the Eurodollar-based Rate or to reduce the amount of
any sum received or receivable by the Agent or any of the Banks under this
Agreement or under the Notes then Agent or Bank, as the case may be, shall
promptly notify the Company of such fact and demand compensation therefor and,
within fifteen (15) days after such notice, Company agrees to pay to Agent or
such Bank such additional amount or amounts as will compensate Agent or such
Bank or Banks for such increased cost or reduction. A certificate of Agent or
such Bank setting forth the basis for determining such additional amount or
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amounts necessary to compensate Agent or such Bank or Banks shall be
conclusively presumed to be correct save for manifest error.
12.6 [RESERVED].
12.7 OTHER INCREASED COSTS. In the event that after the date hereof the
adoption of or any change in any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Bank or Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank or Agent
with any guideline, request or directive of any such authority (whether or not
having the force of law), including any risk based capital guidelines, affects
or would affect the amount of capital required or expected to be maintained by
such Bank or Agent (or any corporation controlling such Bank or Agent) and such
Bank or Agent, as the case may be, determines that the amount of such capital is
increased by or based upon the existence of such Bank's or Agent's obligations,
or Advances hereunder and such increase has the effect of reducing the rate of
return on such Bank's or Agent's (or such controlling corporation's) capital as
a consequence of such obligations, or Advances hereunder to a level below that
which such Bank or Agent (or such controlling corporation) could have achieved
but for such circumstances (taking into consideration its policies with respect
to capital adequacy) by an amount deemed by such Bank or Agent to be material,
then the Company shall pay to such Bank or Agent, as the case may be, from time
to time, upon request by such Bank or Agent, additional amounts sufficient to
compensate such Bank or Agent (or such controlling corporation) for any increase
in the amount of capital and reduced rate of return which such Bank or Agent
reasonably determines to be allocable to the existence of such Bank's or Agent's
obligations, or Advances hereunder. A statement as to the amount of such
compensation, prepared in good faith and in reasonable detail by such Bank or
Agent, as the case may be, shall be submitted by such Bank or by Agent to the
Company, reasonably promptly after becoming aware of any event described in this
Section 12.7 and shall be conclusive, absent manifest error in computation.
12.8 MARGIN ADJUSTMENTS. Adjustments in the applicable Margin, based on
SCHEDULE 1, shall be implemented as follows:
(a) Such adjustments shall be given prospective effect only, effective (i)
as to the Applicable L/C Fee Percentage and Applicable Commitment Fee
Percentage, upon the required date of delivery of the Covenant Compliance and
Interest Rate Adjustment Reports under Section 8.10 hereof, in each case
establishing applicability of the appropriate adjustment, and (ii) as to each
Eurodollar-based Advance outstanding hereunder, effective upon the expiration of
the applicable Interest Period(s), if any, in effect on the date of the delivery
of such financial statements, in each
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case with no retroactivity or claw-back. In the event Company fails timely to
deliver the Covenant Compliance and Interest Rate Adjustment Reports required
under Section 8.10, then from the date of such Covenant Compliance and
Interest Rate Adjustment Reports (but no later than the date delivery of such
reports was required) until such reports are delivered, the margins and fee
percentages shall be the highest Margin set forth in the pricing matrix.
(b) With respect to Eurodollar-based Advances outstanding hereunder, an
adjustment hereunder, after becoming effective, shall remain in effect only
through the end of the applicable Interest Period(s) for such Eurodollar-based
Advances if any; provided, however, that upon any change in the Margin level
then in effect, as aforesaid, or the occurrence of any other event which under
the terms hereof causes such adjustment no longer to be applicable, then any
such subsequent adjustment or no adjustment, as the case may be, shall be
effective (and said pricing shall thereby be adjusted up or down, as applicable)
with the commencement of each Interest Period following such change or event,
all in accordance with the preceding subparagraph.
(c) Such Margin adjustments under this Section 12.8 shall be made
irrespective of, and in addition to, any other interest rate adjustments
hereunder.
12.9 HLT DETERMINATION. In the event at any time of an HLT Determination,
the Agent, the Banks and Company shall commence negotiations in good faith to
agree upon whether and, if so, the extent to which fees, interest rates and/or
margins hereunder should be increased so as to reflect such HLT Determination
and to compensate the Banks and Agent for additional costs, expenses and/or fees
which result from or are associated with any such HLT Determination, including
without limitation any costs resulting from any requirement that additional
capital be allocated to the Indebtedness, or any portion thereof. If Company and
the Majority Banks agree that fees, interest rates and/or margins should be
increased, and agree on the amount of such increase or increases, this Agreement
may be amended to give effect to such increase or increases as provided in
Section 14.11 hereof. If Company and Majority Banks fail to agree on whether
and, if so, the extent to which fees, interest rates and/or margins hereunder
should be increased within 60 days after notice to Company of an HLT
Determination as herein provided, then (i) the Agent shall, if requested by the
Majority Banks, by written notice to Company terminate the commitments of the
Banks to fund and/or maintain Advances under this Agreement and such commitments
shall thereupon terminate, (ii) Company shall be obligated to repay all
outstanding Indebtedness at the end of the Interest Period applicable thereto
and (iii) the Company may, at its option, on at least ten Business Days' written
notice to the Agent (which shall promptly notify the Banks thereof) prepay all
Indebtedness outstanding hereunder by paying the aggregate principal amount
thereof, together, with all
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accrued interest thereon to the date of prepayment; PROVIDED that, if the
Company prepays any Advances carried at the Eurocurrency-based Rate or the
Quoted Rate pursuant to this Section 12.9, Company shall compensate the Banks
for any resulting funding losses as provided in Section 12.1 hereof. Subject
to compliance by Company with this Section 12.9, the Banks acknowledge that
an HLT Determination shall not constitute a Default or an Event of Default
hereunder.
13. AGENT
13.1 APPOINTMENT OF AGENT. Each Bank and the holder of each Note
irrevocably appoints and authorizes the Agent to act on behalf of such Bank or
holder under this Agreement and the Loan Documents and to exercise such powers
hereunder and thereunder as are specifically delegated to Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental
thereto, including without limitation the power to execute or authorize the
execution of financing or similar statements or notices, and other documents. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or for
Company. Each Bank agrees (which agreement shall survive any termination of this
Agreement) to reimburse Agent for all reasonable out-of-pocket expenses
(including house and outside attorneys' fees and disbursements) incurred by
Agent hereunder or in connection herewith or with an Event of Default or in
enforcing the obligations of Company under this Agreement or the Loan Documents
or any other instrument executed pursuant hereto, and for which Agent is not
reimbursed by Company, pro rata according to such Bank's Percentage. Agent shall
not be required to take any action under the Loan Documents, or to prosecute or
defend any suit in respect of the Loan Documents, unless indemnified to its
satisfaction by the Banks against loss, costs, liability and expense. If any
indemnity furnished to Agent shall become impaired, it may call for additional
indemnity and cease to do the acts indemnified against until such additional
indemnity is given.
13.2 DEPOSIT ACCOUNT WITH AGENT. Company hereby authorizes Agent, in
Agent's sole discretion, to charge its general deposit account(s), if any,
maintained with Agent for the amount of any principal, interest, or other
amounts or costs due under this Agreement when the same become due and payable
under the terms of this Agreement or the Notes.
13.3 SCOPE OF AGENT'S DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Bank (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). Neither Agent nor any of its directors, officers,
employees
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or agents shall be liable to any Bank for any action taken or omitted
to be taken by it under this Agreement or any document executed pursuant hereto,
or in connection herewith or therewith with the consent or at the request of the
Majority Banks or in the absence of their own gross negligence or wilful
misconduct, nor be responsible for or have any duties to ascertain, inquire into
or verify (a) any recitals or warranties herein or therein, (b) the
effectiveness, enforceability, validity or due execution of this Agreement or
any document executed pursuant hereto or any security thereunder, (c) the
performance by Company of its obligations hereunder or thereunder, or (d) the
satisfaction of any condition hereunder or thereunder, including without
limitation the making of any Advance or the issuance of any Letter of Credit.
Agent shall be entitled to rely upon any certificate, notice, document or other
communication (including any cable, telegraph, telex, facsimile transmission or
oral communication) believed by it to be genuine and correct and to have been
sent or given by or on behalf of a proper person. Agent may treat the payee of
any Note as the holder thereof. Agent may employ agents and may consult with
legal counsel (who may be counsel for Company), independent public accountants
and other experts selected by it and shall not be liable to the Banks (except as
to money or property received by them or their authorized agents), for the
negligence or misconduct of any such agent selected by it with reasonable care
or for any action taken or omitted to be taken by it in good faith in accordance
with the advice of such counsel, accountants or experts.
13.4 SUCCESSOR AGENT. Agent may resign as such at any time upon at least 30
days prior notice to Company and all Banks. If Agent at any time shall resign or
if the office of Agent shall become vacant for any other reason, Majority Banks
shall, by written instrument, appoint successor agent(s) satisfactory to such
Majority Banks, and, so long as no Default or Event of Default has occurred and
is continuing, to Company. Such successor agent shall thereupon become the Agent
hereunder, as applicable, and shall be entitled to receive from the prior Agent
such documents of transfer and assignment as such successor Agent may reasonably
request. Any such successor Agent shall be a commercial bank organized under the
laws of the United States or any state thereof and shall have a combined capital
and surplus of at least $500,000,000. If a successor is not so appointed or does
not accept such appointment before the resigning Agent's resignation becomes
effective, the resigning Agent may appoint a temporary successor to act until
such appointment by the Majority Banks is made and accepted or if no such
temporary successor is appointed as provided above by the resigning Agent, the
Majority Banks shall thereafter perform all of the duties of the resigning Agent
hereunder until such appointment by the Majority Banks is made and accepted.
Such successor Agent shall succeed to all of the rights and obligations of the
resigning Agent as if originally named. The resigning Agent shall duly assign,
transfer and deliver to such successor Agent all moneys at the time held by the
resigning Agent hereunder after deducting
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therefrom its expenses for which it is entitled to be reimbursed. Upon such
succession of any such successor Agent, the provisions of this ARTICLE 13
shall continue in effect for the benefit of the resigning Agent in respect of
any actions taken or omitted to be taken by it while it was acting as Agent.
13.5 LOANS BY AGENT. Comerica Bank and its successors and assigns, in its
capacity as a Bank hereunder, shall have the same rights and powers hereunder as
any other Bank and may exercise or refrain from exercising the same as though it
were not the Agent. Comerica Bank and its affiliates may (without having to
account therefor to any Bank) accept deposits from, lend money to, and generally
engage in any kind of banking, trust, financial advisory or other business with
Company (or the shareholders of Company) as if it were not acting as Agent
hereunder, and may accept fees and other consideration therefor without having
to account for the same to the Banks.
13.6 CREDIT DECISIONS. Each Bank acknowledges that it has, independently of
Agent and each other Bank and based on the financial statements of Company and
such other documents, information and investigations as it has deemed
appropriate, made its own credit decision to extend credit hereunder from time
to time. Each Bank also acknowledges that it will, independently of Agent and
each other Bank and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any document
executed pursuant hereto.
13.7 AGENT'S FEES. Company shall pay to Agent the annual agency fee and
such other fees and charges in the amounts and at the times set forth in the
letter agreement between Company and Agent dated September 6, 1996. The Agent's
Fees described in this Section 13.7 shall not be refundable under any
circumstances.
13.8 AUTHORITY OF AGENT TO ENFORCE NOTES, THIS AGREEMENT AND OTHER LOAN
DOCUMENTS. Each Bank, subject to the terms and conditions of this Agreement,
authorizes the Agent with full power and authority as attorney-in-fact to
institute and maintain actions, suits or proceedings for the collection and
enforcement of the Notes and to file such proofs of debt or other documents as
may be necessary to have the claims of the Banks allowed in any proceeding
relative to Company, or any of its Subsidiaries, or their respective creditors
or affecting their respective properties, and to take such other actions which
Agent considers to be necessary or desirable for the protection, collection and
enforcement of the Notes, this Agreement or the other Loan Documents.
13.9 INDEMNIFICATION. The Banks agree to indemnify the Agent
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(to the extent not reimbursed by Company, but without limiting any obligation
of Company to make such reimbursement), ratably according to their respective
Percentages, from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever (including,
without limitation, fees and disbursements of counsel) which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or
arising out of this Agreement, any of the other Loan Documents or the
transactions contemplated hereby or any action taken or omitted by the Agent
under this Agreement or any of the other Loan Documents; provided, however,
that no Bank shall be liable for any portion of such claims, damages, losses,
liabilities, costs or expenses resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including, without limitation, reasonable fees and
expenses of counsel) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement or any of the other Loan Documents, to the extent that the Agent is
not reimbursed for such expenses by Company, but without limiting the
obligation of Company to make such reimbursement. Each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any amounts
owing to the Agent by the Banks pursuant to this Section. If the indemnity
furnished to the Agent under this Section shall, in the judgment of the
Agent, be insufficient or become impaired, the Agent may call for additional
indemnity from the Banks and cease, or not commence, to take any action until
such additional indemnity is furnished.
13.10 KNOWLEDGE OF DEFAULT. It is expressly understood and agreed that
the Agent shall be entitled to assume that no Event of Default has occurred and
is continuing, unless the officers of the Agent immediately responsible for
matters concerning this Agreement shall have been notified in a writing
specifying such Event of Default and stating that such notice is a "notice of
default" by a Bank or by Company. Upon receiving such a notice, the Agent shall
promptly notify each Bank of such Event of Default and provide each Bank with a
copy of such notice. Agent shall also furnish the Banks, promptly upon receipt,
with copies of all other notices, reports or other information required to be
provided by Company hereunder.
13.11 AGENT'S AUTHORIZATION; ACTION BY BANKS. Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Banks to give any approval or consent, or to make any
request, or to take any other action on behalf of the Banks (including without
limitation the exercise of any right or remedy hereunder or under the other Loan
Documents), the Agent shall be required to give such approval or consent, or to
make such request or to take such other action
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only when so requested in writing by the Majority Banks or the Banks, as
applicable hereunder. Action that may be taken by Majority Banks or all of
the Banks, as the case may be (as provided for hereunder) may be taken (i)
pursuant to a vote at a meeting (which may be held by telephone conference
call) as to which all of the Banks have been given reasonable advance notice,
or (ii) pursuant to the written consent of the requisite Percentages of the
Banks as required hereunder, provided that all of the Banks are given
reasonable advance notice of the requests for such consent.
13.12 ENFORCEMENT ACTIONS BY THE AGENT. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agent will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Majority
Banks or all of the Banks, as the case may be (as provided for hereunder), shall
direct; provided, however, that the Agent shall not be required to act or omit
to act if, in the judgment of the Agent, such action or omission may expose the
Agent to personal liability or is contrary to this Agreement, any of the other
Loan Documents or applicable law. Except as expressly provided above or
elsewhere in this Agreement or the other Loan Documents, no Bank (other than the
Agent, acting in its capacity as agent) shall be entitled to take any
enforcement action of any kind under any of the Loan Documents.
14. MISCELLANEOUS
14.1 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, it shall be done, unless otherwise specified herein,
in accordance with GAAP. Furthermore, all financial statements required to be
delivered hereunder shall be prepared in accordance with GAAP.
14.2 CONSENT TO JURISDICTION. Company and Banks hereby irrevocably
submit to the non-exclusive jurisdiction of any United States Federal or
Michigan state court sitting in Detroit in any action or proceeding arising out
of or relating to this Agreement or any of the other Loan Documents and Company
and Banks 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
Michigan state court. Company 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 Michigan by the delivery of copies of such process to Company 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 Company in a notice to the
other parties that complies as to delivery with the terms of Section 14.6.
Nothing in this Section shall affect the right of the Banks and the Agent to
serve process in any other
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manner permitted by law or limit the right of the Banks or the Agent (or any
of them) to bring any such action or proceeding against Company or any
Guarantor or any of its or their property in the courts of any other
jurisdiction. Company hereby irrevocably waives any objection to the laying
of venue of any such suit or proceeding in the above described courts.
14.3 LAW OF MICHIGAN. This Agreement and the Notes have been delivered at
Detroit, Michigan, and shall be governed by and construed and enforced in
accordance with the laws of the State of Michigan. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
14.4 INTEREST. In the event the obligation of Company to pay interest on
the principal balance of the Notes is or becomes in excess of the maximum
interest rate which Company is permitted by law to contract or agree to pay,
giving due consideration to the execution date of this Agreement, then, in that
event, the rate of interest applicable with respect to such Bank's Percentage
shall be deemed to be immediately reduced to such maximum rate and all previous
payments in excess of the maximum rate shall be deemed to have been payments in
reduction of principal and not of interest.
14.5 CLOSING COSTS AND OTHER COSTS. Company agrees to pay, or reimburse the
Agent for payment of, on demand (a) all reasonable closing costs and expenses,
including, by way of description and not limitation, house and outside
reasonable attorney fees and advances, appraisal and accounting fees, and lien
search fees incurred by Agent in connection with the commitment, consummation
and closing of the loans contemplated hereby or in connection with the
administration of this Agreement or any amendment, refinancing or restructuring
of the credit arrangements provided under this Agreement, (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 and the Loan
Documents and the consummation of the transactions contemplated hereby, and any
and all liabilities with respect to or resulting from any delay in paying or
omitting to pay such taxes or fees, (c) all reasonable costs and expenses of the
Agent or any of the Banks (including reasonable fees and expenses of house and
outside counsel and whether incurred through negotiations, legal proceedings or
otherwise) in connection with any Default or Event of Default or the amendment,
waiver or enforcement of this Agreement, or the Loan Documents or in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement and (d) all reasonable costs and expenses of the Agent or any of
the Banks (including reasonable fees and
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expenses of house and outside counsel) in connection with any action or
proceeding relating to a court order, injunction or other process or decree
restraining or seeking to restrain the Agent or any of the Banks from paying
any amount under, or otherwise relating in any way to, any Letter of Credit and
any and all costs and expenses which any of them may incur relative to any
payment under any Letter of Credit. All of said amounts required to be paid by
Company, may, at Agent's option, be charged by Agent as a Prime-based Advance
against the Indebtedness.
14.6 NOTICES. Except as expressly provided otherwise in this Agreement, all
notices and other communications provided to any party hereto under this
Agreement or any other Loan Document shall be 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 parties that complies as to delivery with the
terms of this Section 14.6. 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 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). Agent may, but shall not be required to, take any action on the
basis of any notice given to it by telephone, but the giver of any such notice
shall promptly confirm such notice in writing or by telex or facsimile, and such
notice will not be deemed to have been received until such confirmation is
deemed received in accordance with the provisions of this Section set forth
above. If such telephonic notice conflicts with any such confirmation, the terms
of such telephonic notice shall control.
14.7 FURTHER ACTION. Company, from time to time, upon written request of
Agent will make, execute, acknowledge and deliver or cause to be made, executed,
acknowledged and delivered, all such further and additional instruments, and
take all such further action as may reasonably be required to carry out the
intent and purpose of this Agreement or the Loan Documents, and to provide for
Advances under and payment of the Notes, according to the intent and purpose
herein and therein expressed.
14.8 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS.
(a) This Agreement shall be binding upon and shall inure to the
benefit of Company, the Agent and the Banks, and their respective successors and
assigns.
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(b) The foregoing shall not authorize any assignment by Company of
its rights or duties hereunder, and no such assignment shall be made (or
effective) without the prior written approval of the Banks.
(c) Each of the Banks may at any time and from time to time, subject
to the terms and conditions hereof, grant participations (but not assignments,
except as expressly permitted hereunder) in such Bank's rights and obligations
hereunder and under the other Loan Documents to any commercial bank, savings and
loan association, insurance company, pension fund, mutual fund, commercial
finance company or other similar financial institution, which institution is
approved in advance in writing by Agent and Company, such approval not to be
unreasonably withheld or delayed; provided, however, that (i) the approval of
Company shall not be required upon the occurrence and during the continuance of
a Default or Event of Default and (ii) the approval of Company and Agent shall
not be required for the grant of a participation by a Bank to its Affiliate, to
any other Bank or to any Federal Reserve Bank. The Company authorizes each Bank
to disclose to any prospective participant, once approved by Company and Agent
(if such approval is required), any and all financial information in such Bank's
possession concerning the Company which has been delivered to such Bank pursuant
to this Agreement; provided that each such prospective participant shall execute
a confidentiality agreement consistent with the terms of Section 14.13, hereof.
A Bank shall not be permitted to assign or otherwise transfer (except by
participation according to the terms hereof) its rights and obligations
hereunder, except, (x) to an Affiliate of an assigning Bank or to any Bank or
(y) with the prior written consent of the Company and the Agent which shall not
be unreasonably withheld, to any other financial institution; provided that any
such assignment shall not be in an amount less than $5,000,000;
(d) Each assignment by a Bank of any portion of its rights and
obligations hereunder and under the other Loan Documents shall be made pursuant
to an Assignment Agreement substantially (as determined by Agent) in the form
attached hereto as Exhibit L (with appropriate insertions acceptable to Agent)
and shall be subject to the terms and conditions hereof, and to the following
restrictions:
(i) each assignment shall cover all of the Notes issued by
Company hereunder, and shall be for a fixed and not varying
percentage thereof, with the same percentage applicable to
each such Note;
(ii) each assignment shall be in a minimum amount of Five Million
Dollars ($5,000,000);
(iii) no assignment shall violate any "blue sky" or other
securities law of any jurisdiction or
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shall require the Company or any other Person to file a
registration statement or similar application with the
United States Securities and Exchange Commission (or similar
state regulatory body) or to qualify under the "blue sky"
or other securities laws of any jurisdiction; and
(iv) no assignment shall be effective unless Agent has received
from the assignee (or from the assigning Bank) an assignment
fee of $3,000 for each such assignment.
In connection with any assignment, Company and Agent shall be entitled to
continue to deal solely and directly with the assigning Bank in connection with
the interest so assigned until (x) the Agent shall have received a notice of
assignment duly executed by the assigning Bank and an Assignment Agreement (with
respect thereto) duly executed by the assigning Bank and each assignee; and (y)
the assigning Bank shall have delivered to the Agent the original of each Note
held by the assigning Bank under the Loan Agreements. From and after the date on
which the Agent shall notify Company and the assigning Bank that the foregoing
conditions shall have been satisfied and all consents (if any) required shall
have been given, the assignee thereunder shall be deemed to be a party to this
Agreement. To the extent that rights and obligations hereunder shall have been
assigned to such assignee as provided in such notice of assignment (and
Assignment Agreement), such assignee shall have the rights and obligations of a
Bank under this Agreement (including without limitation the right to receive
fees payable hereunder in respect of the period following such assignment). In
addition, the assigning Bank, to the extent that rights and obligations
hereunder shall have been assigned by it as provided in such notice of
assignment (and Assignment Agreement), but not otherwise, shall relinquish its
rights and be released from its obligations under this Agreement.
Within five (5) Business Days following Company's receipt of notice from the
Agent that Agent has accepted and executed a notice of assignment and the duly
executed Assignment Agreement, Company shall, to the extent applicable, execute
and deliver to the Agent in exchange for any surrendered Note, new Note(s)
payable to the order of the assignee in an amount equal to the amount assigned
to it pursuant to such notice of assignment (and Assignment Agreement), and with
respect to the portion of the Indebtedness retained by the assigning Bank, to
the extent applicable, a new Note payable to the order of the assigning Bank in
an amount equal to the amount retained by such Bank hereunder shall be executed
and delivered by the Company. Agent, the Banks and the Company acknowledge and
agree that any such new Note(s) shall be given in renewal and replacement of the
surrendered Notes and shall not effect or constitute a novation or discharge of
the Indebtedness
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evidenced by any surrendered Note, and each such new Note shall contain a
provision confirming such agreement. In addition, promptly following receipt
of such Notes, Agent shall prepare and distribute to Company and each of the
Banks a revised Exhibit I to this Agreement setting forth the applicable new
Percentages of the Banks (including the assignee Bank), taking into account
such assignment.
(e) Each Bank agrees that any participation agreement permitted
hereunder shall comply with all applicable laws and shall be subject to the
following restrictions (which shall be set forth in the applicable Participation
Agreement):
(i) such Bank shall remain the holder of its Notes hereunder,
notwithstanding any such participation;
(ii) except as expressly set forth in this Section 14.8(e) with
respect to rights of setoff and the benefits of Article 12
hereof, a participant shall have no direct rights or
remedies hereunder;
(iii) a participant shall not reassign or transfer, or grant any
sub-participations in its participation interest hereunder
or any part thereof; and
(iv) such Bank shall retain the sole right and responsibility to
enforce the obligations of the Company relating to the Notes
and Loan Documents, including, without limitation, the right
to proceed against any Guaranties, or cause Agent to do so
(subject to the terms and conditions hereof), and the right
to approve any amendment, modification or waiver of any
provision of this Agreement without the consent of the
participant, except for those matters covered by Section
14.11(a) through (d) and (g) hereof (provided that a
participant may exercise approval rights over such matters
only on an indirect basis, acting through such Bank, and
Company, Agent and the other Banks may continue to deal
directly with such Bank in connection with such Bank's
rights and duties hereunder), and shall otherwise be in form
satisfactory to Agent.
Company agrees that each participant shall be deemed to have the right of setoff
under Section 11.4 hereof, in respect of its participation interest in amounts
owing under this Agreement and the Loan Documents to the same extent as if the
Indebtedness were
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owing directly to it as a Bank under this Agreement, shall be subject to the
pro rata recovery provisions of Section 11.3 hereof, and that each
participant shall be entitled to the benefits of Article 12 hereof. The
amount, terms and conditions of any participation shall be as set forth in
the participation agreement between the issuing Bank and the Person
purchasing such participation, and none of the Company, the Agent and the
other Banks shall have any responsibility or obligation with respect thereto,
or to any Person to whom any such participation may be issued. No such
participation shall relieve any issuing Bank of any of its obligations under
this Agreement or any of the other Loan Documents, and all actions hereunder
shall be conducted as if no such participation had been granted.
(f) Nothing in this Agreement, the Loan Documents or the Notes,
expressed or implied, is intended to or shall confer on any Person other than
the respective parties hereto and thereto and their successors and assignees
permitted hereunder and thereunder any benefit or any legal or equitable right,
remedy or other claim under this Agreement, the Notes or the other Loan
Documents.
14.9 INDULGENCE. No delay or failure of Agent and the Banks in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege nor shall any single or partial exercise thereof preclude
any further exercise thereof, nor the exercise of any other right, power or
privilege. The rights of Agent and the Banks hereunder are cumulative and are
not exclusive of any rights or remedies which Agent and the Banks would
otherwise have.
14.10 COUNTERPARTS. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same instrument.
14.11 AMENDMENT AND WAIVER. No amendment or waiver of any provision of
this Agreement or any Loan Document, nor consent to any departure by Company
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Banks or, if this Agreement expressly so requires
with respect to the subject matter thereof, by all Banks (and, with respect to
any amendments to this Agreement or the other Loan Documents, by Company), and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; PROVIDED, however, that no amendment,
waiver or consent shall, unless in writing and signed by all the Banks, do any
of the following: (a) subject the Banks to any additional obligations, (b)
reduce the principal of, or interest on, the Revolving Credit Notes or any Fees
or other amounts payable hereunder, (c) postpone any date fixed for any payment
of principal of, or interest on, the Revolving Credit Notes or any Fees or other
amounts payable hereunder, (d) waive any Event of Default specified in Sections
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10.1(a) or (b) hereof, (e) release any Guarantor or terminate or modify any
indemnity provided to the Banks hereunder or under the Loan Documents, except as
shall be otherwise expressly provided in this Agreement or any Loan Document,
(f) release all, substantially all or any material part of the collateral
security from the liens and security interests granted to Agent for the benefit
of the Banks pursuant to the Loan Documents; (g) take any action which requires
the signing of all Banks pursuant to the terms of this Agreement or any Loan
Document, (h) change the aggregate unpaid principal amount of the Notes which
shall be required for the Banks or any of them to take any action under this
Agreement or any Loan Document or (i) change the definition of "Majority Banks"
or this Section 14.11; PROVIDED further, that no amendment, waiver or consent
shall, unless in writing signed by the Swing Line Bank do any of the following:
(x) reduce the principal of, or interest on, the Swing Line Note or (y) postpone
any date fixed for any payment of principal of, or interest on, the Swing Line
Note; and PROVIDED further, however, that no amendment, waiver, or consent
shall, unless in writing and signed by the Agent in addition to all the Banks,
affect the rights or duties of the Agent under this Agreement or any Loan
Document. All references in this Agreement to "Banks" or "the Banks" shall refer
to all Banks, unless expressly stated to refer to Majority Banks.
14.12 TAXES AND FEES. Should any documentary, stamp or similar tax
(other than a tax based upon the net income of any Bank or Agent imposed by the
jurisdiction in which such Bank or Agent have their respective principal
executive offices), or recording or filing fee become payable in respect of this
Agreement or any of the Loan Documents (or the execution, filing or recording
thereof) or any amendment, modification or supplement hereof or thereof, Company
agrees to pay the same together with any interest or penalties thereon and
agrees to hold the Agent and the Banks harmless with respect thereto.
14.13 CONFIDENTIALITY. The Agent and each Bank agree that it will not
disclose without the prior consent of Company (other than to its employees, its
Affiliates, to Agent or another Bank or to its auditors or counsel) any
information with respect to Company, which is furnished pursuant to this
Agreement or any of the Loan Documents; provided that Agent and any Bank may
disclose any such information (a) as has become generally available to the
public or has been lawfully obtained by Agent or such Bank from any third party
under no duty of confidentiality to Company, (b) as may be required in any
report, statement or testimony submitted to, or in respect to any inquiry, by,
any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Bank, including the Board of Governors of the Federal
Reserve System of the United States, the Office of the Comptroller of the
Currency or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be
required in respect to any summons or
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subpoena or in connection with any litigation, (d) in order to comply with
any law, order, regulation or ruling applicable to such Bank, and (e) to any
permitted transferee or assignee or to any approved participant of, or with
respect to, the Notes, as aforesaid.
14.14 WITHHOLDING TAXES. If any Bank is not incorporated under the laws
of the United States or a state thereof, such Bank shall promptly deliver to the
Agent two executed copies of (i) Internal Revenue Service Form 1001 specifying
the applicable tax treaty between the United States and the jurisdiction of such
Bank's domicile which provides for the exemption from withholding on interest
payments to such Bank, (ii) Internal Revenue Service Form 4224 evidencing that
the income to be received by such Bank hereunder is effectively connected with
the conduct of a trade or business in the United States or (iii) other evidence
satisfactory to the Agent that such Bank is exempt from United States income tax
withholding with respect to such income. Such Bank shall amend or supplement any
such form or evidence as required to insure that it is accurate, complete and
non-misleading at all times. Promptly upon notice from the Agent of any
determination by the Internal Revenue Service that any payments previously made
to such Bank hereunder were subject to United States income tax withholding when
made, such Bank shall pay to the Agent the excess of the aggregate amount
required to be withheld from such payments over the aggregate amount actually
withheld by the Agent.
14.15 WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND THE COMPANY 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 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 ACTION OF ANY OF THEM. NEITHER THE BANKS, THE AGENT, NOR COMPANY
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 BANKS AND THE AGENT OR
COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
14.16 COMPLETE AGREEMENT; CONFLICTS. This Agreement, the Notes, any
Requests for Revolving Credit Advance and Requests for Swing Line Advance
hereunder, and the Loan Documents contain the entire agreement of the parties
hereto, superseding all prior agreements, discussions and understandings
relating to the subject matter hereof, and none of the parties shall be bound by
anything not expressed in writing. In the event of any conflict between the
terms of this Agreement and the other Loan Documents, this Agreement shall
govern.
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14.17 SEVERABILITY. In case any one or more of the obligations of
Company under this Agreement, the Notes or any of the other Loan Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining obligations of Company shall not in any way
be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of Company under this Agreement, the Notes or
any of the other Loan Documents in any other jurisdiction.
14.18 TABLE OF CONTENTS AND HEADINGS. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions hereof.
14.19 CONSTRUCTION OF CERTAIN PROVISIONS. If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
14.20 INDEPENDENCE OF COVENANTS. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
14.21 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All terms,
covenants, agreements, representations and warranties of Company or any party to
any of the Loan Documents made herein or in any of the Loan Documents or in any
certificate, report, financial statement or other document furnished by or on
behalf of Company or any Guarantor in connection with this Agreement or any of
the Loan Documents shall be deemed to have been relied upon by the Banks,
notwithstanding any investigation heretofore or hereafter made by any Bank or on
such Bank's behalf, and those covenants and agreements of Company set forth in
Sections 8.15, 12.1, 12.3, 12.4, 12.5, 12.7 and 14.5 hereof (together with any
other indemnities of Company contained elsewhere in this Agreement or in any of
the Loan Documents) and of Banks set forth in Section 13.9 hereof shall survive
the repayment in full of the Indebtedness and the termination of the Revolving
Credit Aggregate Commitment.
14.22 EFFECTIVE UPON EXECUTION. This Agreement shall become effective
upon the execution hereof by Banks, Agent and Company and the issuance by
Company of the Revolving Credit Notes and the Swing Line Note hereunder, and
shall remain effective until
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the Indebtedness has been repaid and discharged in full, all Letters of
Credit have expired and no commitment to extend any credit hereunder or under
any of the other Loan Documents, whether optional or obligatory, remains
outstanding.
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WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK, R.J. TOWER CORPORATION, a Michigan
as Agent corporation
By: By:
----------------------------- --------------------------------
David B. Marvin
Its:
--------------------------------
Its: Vice President --------------------------------
One Detroit Center --------------------------------
500 Woodward Avenue Attn:
6th Floor MC 3244 ------------------------------
Detroit, Michigan 48226
Attention: David B. Marvin
BANKS: COMERICA BANK
Operations Office: By:_________________________________
Comerica Bank David B. Marvin
One Detroit Center
500 Woodward Ave. Its: Vice President
6th Floor MC 3244 One Detroit Center
Detroit, Michigan 48226 500 Woodward Avenue
Attention: Eva Hensbergen Detroit, Michigan 48226
Telephone No. (313) 222-9618 Attention: David B. Marvin
Facsimile No. (313) 222-5759 Telephone: (313) 222-5087
Facsimile No. (313) 222-5759
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BANK OF AMERICA ILLINOIS
Operations Office: By:______________________
Bank of America Illinois R.G. Stapleton
231 South Lasalle
Chicago, Illinois 60697 Its: Managing Director
Attention:_________________ 231 South Lasalle
Telephone No. (___) _______ Chicago, Illinois 60697
Facsimile No. (___) _______ Attention R.G. Stapleton
Telephone: (312) 828-6583
Facsimile No. (___) ______
FIRST BANK NATIONAL ASSOCIATION
Operations Office: By:________________________
First Bank National Association Mark R. McDonald
601 2nd Avenue South
Minneapolis, MN 55402-4302 Its: Vice President
Attention: Barbara M. DeVahl 601 2nd Avenue South
Telephone: (612) 973-0506 Minneapolis, MN 55402-4302
Facsimile No. (612) 973-0822 Attention: Mark R. McDonald
Telephone: (612) 973-0617
Facsimile No. (612) 973-0822
SWING LINE BANK: COMERICA BANK
Operations Office: By:_________________________
Comerica Bank David B. Marvin
One Detroit Center
500 Woodward Ave. Its: Vice President
6th Floor MC 3244 One Detroit Center
Detroit, Michigan 48226 500 Woodward Avenue
Attention: Eva Hensbergen Detroit, Michigan 48226
Telephone No. (313) 222-9618 Attention: David B. Marvin
Facsimile No. (313) 222-5759 Telephone: (313) 222-5087
Facsimile No. (313) 222-5759
80
<PAGE>
EXHIBIT A
REQUEST FOR REVOLVING CREDIT ADVANCE
No. Dated:
--------------- ---------------
To: Comerica Bank - Agent
Re: R.J. Tower Corporation Fourth Amended and Restated Credit Agreement by and
among Comerica Bank (individually and as Agent), the lenders from time to
time parties thereto (collectively, "Banks"), and R.J. Tower Corporation
("Company") dated as of September 6, 1996 (as amended from time to time,
the "Agreement").
Pursuant to the Agreement, the Company requests an Advance from Banks as
follows:
A. Date of Advance:
---------------
B. Amount of Advance:
$
---------------
// Comerica Bank Account No. ______________
// Other: _________________________________
_________________________________
C. Type of Activity:
1. Advance //
2. Refunding
of a Revolving Credit Advance //
of a Swing Line Advance //
3. Conversion //
D. Interest Rate:
1. Prime-based Rate //
2. Eurodollar-based Rate //
E. Interest Period (for Eurodollar-based Advances only):
1. One (1) Month //
2. Two (2) Months //
3. Three (3) Months //
4. Six (6) Months //
<PAGE>
5. Nine (9) Months //
The Company certifies to the matters specified in Section 2.7(e) of the
Agreement.
R.J. TOWER CORPORATION, a
Michigan corporation
By:
---------------------------
Its:
-------------------------
Agent Approval:
--------------------
2
<PAGE>
EXHIBIT B
REVOLVING CREDIT NOTE
$ September 6, 1996
----------
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, R.J. Tower
Corporation, a Michigan corporation ("Company") promises to pay to the order of
[INSERT BANK] ("Bank") care of Comerica Bank, as Agent, at 500 Woodward Avenue,
Detroit, MI 48226, in lawful money of the United States of America, the sum of
[INSERT AMOUNT DERIVED FROM PERCENTAGES] Dollars ($_______), or so much of said
sum as may from time to time have been advanced and then be outstanding
hereunder pursuant to the R.J. Tower Corporation Fourth Amended and Restated
Credit Agreement dated as of September 6, 1996, made by and among the Company,
certain banks, including the Bank, and Comerica Bank as Agent for such banks, as
the same may be amended from time to time (the "Agreement"), together with
interest thereon as hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the Applicable
Interest Rate from time to time applicable thereto under the Agreement or as
otherwise determined thereunder, and interest shall be computed, assessed and
payable as set forth in the Agreement.
This Note is a note under which advances (including refundings and
conversions), repayments and readvances may be made from time to time, but only
in accordance with the terms and conditions of the Agreement. This Note
evidences borrowings under, is subject to, is secured in accordance with, and
may be accelerated or matured under, the terms of the Agreement, to which
reference is hereby made. Definitions and terms of the Agreement are hereby
incorporated by reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
Nothing herein shall limit any right granted Bank by any other instrument
or by law.
<PAGE>
This Note replaces in part (by renewal) that certain Revolving Credit Note
dated May 30, 1996, made in the principal amount of __________________ Dollars
by Company payable to [INSERT BANK].
R.J. TOWER CORPORATION, a
Michigan corporation
By:
---------------------------
Its:
--------------------------
2
<PAGE>
EXHIBIT C
LETTER OF CREDIT NOTICE
TO: Members of the Bank Group
RE: Issuance of Letter of Credit pursuant to Article 3 of the R.J. Tower
Corporation ("Company") Fourth Amended and Restated Credit Agreement
("Agreement") dated September 6, 1996 between Company, Agent and the Banks.
On _____________________ , 19__,(1) Agent, in accordance with Article 3 of
the Agreement, issued its Letter of Credit number _____________ , in favor of
__________________ (2) for the account of Company [and ________________________
______________________________ ].(3) The face amount of such Letter of Credit is
$ __________ . The amount of each Bank's participation in the Letter of Credit
is as follows:(4)
Comerica Bank $ ________________
First Bank National Association $ ________________
Bank of America Illinois $ ________________
This notification is delivered this ____ day of __________ , 19 __ ,
pursuant to Section 3.3 of the Agreement. Except as otherwise defined,
capitalized terms used herein have the meanings given them in the Agreement.
Signed:
COMERICA BANK
By: _______________________
Its: ______________________
- -------------------
(1) Date of Issuance
(2) Beneficiary
(3) Other Account Party (i.e. Subsidiary of Company), if any
(4)Amounts based on Percentages
<PAGE>
EXHIBIT D
REQUEST FOR SWING LINE ADVANCE
No. Dated:
--------------- ---------------
To: Comerica Bank, Swing Line Bank
Re: R.J. Tower Corporation Fourth Amended and Restated Credit Agreement by and
among Comerica Bank (individually and as Agent), the lenders from time to
time parties thereto (collectively, "Banks"), and R.J. Tower Corporation
("Company") dated as of September 6, 1996 (as amended from time to time,
the "Agreement").
Pursuant to the Agreement, the Company requests a Swing Line Advance from
the Swing Line Bank as follows:
A. Date of Advance:
---------------
B. Amount of Advance:
$
---------------
// Comerica Bank Account No. ______________
// Other: _________________________________
_________________________________
C. Interest Rate:
1. Prime-based Rate //
2. Quoted Rate //
D. Interest Period:
1. ______________ days (1)
- ---------------
(1) Insert up to 30 days.
<PAGE>
The Company certifies to the matters specified in Section 4.6(e) of the
Agreement.
R.J. TOWER CORPORATION,
a Michigan corporation
By:
----------------------------
Its:
---------------------------
Swing Line Bank Approval:
--------------------
2
<PAGE>
EXHIBIT E
SWING LINE NOTE
$1,000,000 September 6, 1996
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, R.J. Tower
Corporation, a Michigan corporation ("Company") promises to pay to the order of
Comerica Bank ("Bank") at 500 Woodward Avenue, Detroit, Michigan in lawful money
of the United States of America, the sum of One Million Dollars ($1,000,000), or
so much of said sum as may from time to time have been advanced and then be
outstanding hereunder pursuant to Article 4 of the R.J. Tower Corporation Fourth
Amended and Restated Credit Agreement dated as of September 6, 1996, executed by
and among the Company, certain banks, including the Bank, and Comerica Bank, as
Agent for such banks, as the same may be amended from time to time (the
"Agreement"), together with interest thereon as hereinafter set forth.
The unpaid principal indebtedness from time to time outstanding under this
Note shall be due and payable on the last day of the Interest Period applicable
thereto or as otherwise set forth in the Agreement, provided that no Swing Line
Advance may mature or be payable on a day later than the Revolving Credit
Maturity Date.
Each of the Swing Line Advances made hereunder shall bear interest at the
Prime-based Rate or the Quoted Rate from time to time applicable thereto under
the Agreement or as otherwise determined thereunder, and interest shall be
computed, assessed and payable as set forth in the Agreement.
This Note is a note under which advances, repayments and readvances may be
made from time to time, but only in accordance with the terms and conditions of
the Agreement. This Note evidences borrowings under, is subject to, is secured
in accordance with, and may be accelerated or matured under, the terms of the
Agreement, to which reference is hereby made. Definitions and terms of the
Agreement are hereby incorporated by reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any
<PAGE>
holder of this Note to any party now or hereafter liable hereon or any present
or subsequent owner of any property, real or personal, which is now or hereafter
security for this Note.
This Note replaces in part (by renewal) that certain Swing Line Note dated
May 30, 1996, made in the principal amount of $1,000,000 by Company payable to
Comerica Bank.
Nothing herein shall limit any right granted Bank by any other instrument
or by law.
R.J. TOWER CORPORATION, a
Michigan corporation
By:
---------------------------
Its:
--------------------------
2
<PAGE>
EXHIBIT F
FORM OF
SWING LINE LOAN PARTICIPATION CERTIFICATE
__________________, 19__
[Name of Bank]
_________________________
_________________________
Ladies and Gentlemen:
Pursuant to subsection 4.9(b) of the R.J. Tower Corporation Fourth Amended
and Restated Credit Agreement ("Credit Agreement") dated as of September 6,
1996, among R.J. Tower Corporation, the Banks named therein and Comerica Bank,
as Agent, the undersigned hereby acknowledges receipt from you of $ ___________
as payment for a participating interest in the following Swing Line Advance:
Date of Swing Line Advance:________________________________
Principal Amount of Swing Line Advance:____________________
The participation evidenced by this certificate shall be subject to the terms
and conditions of the Credit Agreement including without limitation Section
4.9(b) thereof.
Very truly yours,
COMERICA BANK, as Agent
By:____________________________
Its:___________________________
<PAGE>
EXHIBIT I
PERCENTAGES
Bank Percentage
---- ----------
Comerica Bank 52%
First Bank National Association 24%
Bank of America Illinois 24%
<PAGE>
EXHIBIT J
PENSION PLANS
[SEE FILE PRIOR CREDIT AGREEMENT -- UPDATE]
<PAGE>
EXHIBIT K
COVENANT COMPLIANCE AND INTEREST RATE ADJUSTMENT REPORT
To: Comerica Bank, as Agent
Re: R.J. Tower Corporation Fourth Amended and Restated Credit Agreement
dated as of September 6, 1996 (the "Agreement")
This Covenant Compliance and Interest Rate Adjustment Report ("Report") is
furnished pursuant to Section 8.10 of the Agreement and sets forth various
information as of _____________, 19__ (the "Computation Date").
1. CONSOLIDATED NET WORTH. On the Computation Date, the Consolidated Net
Worth, which is required to be not less than $ _________ , was $ _________ as
computed in the supporting documents attached hereto as Schedule 1.
2. MAXIMUM LEVERAGE RATIO. On the Computation Date, the Maximum Leverage
Ratio, which is required to be not more than 0.55 to 1.0, was ___________ to 1.0
as computed in the supporting documents attached hereto as Schedule 2.
3. INTEREST COVERAGE RATIO. On the Computation Date, the Interest
Coverage Ratio, which is required to be not less than 3.0 to 1.0, was _____ to
1.0 as computed in the supporting documents attached hereto as Schedule 3.
4. CASHFLOW LEVERAGE RATIO. On the Computation Date, the Cashflow
Leverage Ratio, which is required to be not more than 3.5 to 1.0, was
________________ to 1.0 as computed in the supporting documents attached hereto
as Schedule 4.
5. EURODOLLAR MARGIN. The aggregate applicable Margin which shall become
effective pursuant to the provisions of Section 12.8 of the Agreement and which
is based on the Leverage Ratio on the Computation Date is
_______________________ percent ( ___ %).
6. APPLICABLE L/C FEE PERCENTAGE. The Applicable L/C Fee Percentage which
shall become effective pursuant to the provisions of Section 12.8 of the
Agreement and which is based on the Leverage Ratio on the Computation Date is
______________ percent ( ____ %).
7. APPLICABLE COMMITMENT FEE PERCENTAGE. The Applicable Commitment Fee
Percentage which shall become effective pursuant to the provisions of Section
12.8 of the Agreement and which is based on the Leverage Ratio on the
Computation Date is _______________ percent ( ____ %).
<PAGE>
The undersigned officer of Company hereby certifies that:
A. To the best of the undersigned officer's knowledge, all of the
information set forth in this Report (and in any Schedule attached hereto) is
true and correct in all material respects.
B. To the best of the undersigned officer's knowledge, as of the
Computation Date, the Company has observed and performed all of its covenants
and other agreements contained in the Agreement and in the Notes and any other
Loan Documents to be observed, performed and satisfied by them.
C. I have reviewed the Agreement and this Report is based on an
examination sufficient to assure that this Report is accurate.
D. To the best of the undersigned officer's knowledge, except as stated
in Schedule 5 hereto (which shall describe any existing Default or Event of
Default and the notice and period of existence thereof and any action taken with
respect thereto or contemplated to be taken by Company), no Default or Event of
Default has occurred and is continuing on the date of this Report.
Capitalized terms used in this Report and in the schedules hereto, unless
specifically defined to the contrary, have the meanings given to them in the
Agreement.
IN WITNESS WHEREOF, Company has caused this Report to be executed and
delivered by its duly authorized officer this ______ day of __________________,
19__.
R.J. TOWER CORPORATION, a
Michigan corporation
By:___________________________
Its:__________________________
2
<PAGE>
EXHIBIT L
FORM OF
ASSIGNMENT AGREEMENT
Date:
--------------------
To: R.J. TOWER CORPORATION
and
COMERICA BANK, as Agent ("Agent")
Re: R.J. Tower Corporation Fourth Amended and Restated Credit Agreement dated
as of September 6, 1996 (the "Agreement"), among R.J. Tower Corporation
("Company"), Agent and certain Banks
Gentlemen and Ladies:
Reference is made to Section 14.8(c), (d) and (e) of the Agreement. Unless
otherwise defined herein or the context otherwise requires, all initially
capitalized terms used herein without definition shall have the meanings
specified in the Agreement.
This Agreement constitutes notice to each of you of the proposed assignment
and delegation by [INSERT ASSIGNOR BANK] (the "Assignor") to [INSERT
PROPOSED ASSIGNEE] (the "Assignee") of a _____% undivided interest ("Assigned
Percentage") in Assignor's Revolving Credit Note under the Agreement (the
"Note"), such that after giving effect to the assignment and assumption
hereafter provided the Assignee's aggregate principal interest in the Note shall
equal $ ___________ (1) and its Percentage shall equal __ % under the Loan
Documents.
Assignor does hereby sell, assign and transfer to Assignee effective on the
"Effective Date" (as hereafter defined) _____ % of Assignor's right, title and
interest in, to and under the Assignor's Note, the Agreement and the other Loan
Documents. It is acknowledged that Assignor, immediately after this Assignment,
shall hold ______ percentage ( __ %) interest in Assignor's Note.
The Assignor hereby instructs the Agent to make all payments from and
including the Effective Date hereof in respect of the interest assigned hereby,
directly to the Assignee. The Assignor and the Assignee agree that all interest
and fees accrued up to, but not including, the Effective Date of the assignment
and delegation being made hereby are the property of the Assignor, and
- ---------------
(1) Such amount shall not be less than a minimum amount of $5,000,000.
<PAGE>
not the Assignee. The Assignee agrees that, upon receipt of any such interest or
fees accrued up to the Effective Date, the Assignee will promptly remit the same
to the Assignor.
The Assignee hereby confirms that it has received a copy of the Agreement
and the exhibits and schedules referred to therein, and all other Loan Documents
which it considers necessary, together with copies of the other documents which
were required to be delivered under the Agreement as a condition to the making
of the loans thereunder. The Assignee acknowledges and agrees that it: (a) has
made and will continue to make such inquiries and has taken and will take such
care on its own behalf as would have been the case had its Percentage been
granted and its loans been made directly by such Assignee to the Company without
the intervention of the Agent, the Assignor or any other bank; and (b) has made
and will continue to make, independently and without reliance upon the Agent,
the Assignor or any other bank, and based on such documents and information as
it has deemed appropriate, its own credit analysis and decisions relating to the
Agreement. The Assignee further acknowledges and agrees that neither the Agent,
nor the Assignor has made any representations or warranties about the
creditworthiness of the Company, or any other party to the Agreement or any
other of the Loan Documents, or with respect to the legality, validity,
sufficiency or enforceability of the Agreement, or any other of the Loan
Documents. This assignment shall be made without recourse to or warranty by the
Assignor, except as set forth herein.
Assignee represents and warrants that it is a Person to which assignments
are permitted pursuant to Section 14.8(c) of the Agreement. Assignor and
Assignee represent and warrant that this assignment shall not violate any "blue
sky" or other securities law of any jurisdiction or require the Company or any
other Person to file a registration statement with the United States Securities
and Exchange Commission or apply to qualify any loans or any interest in any
thereof, under the "blue sky" or other securities laws of any jurisdiction.
Except as otherwise provided in the Agreement, effective as of the
Effective Date:
(a) the Assignee: (i) shall be deemed automatically to have become a party
to the Agreement, to have assumed all of the Assignor's obligations
thereunder to the extent of the Assignee's percentage referred to in
the second paragraph of this Assignment Agreement, and to have all the
rights and obligations of a party to the Agreement, as if it were an
original signatory thereto to the extent specified in the second
paragraph hereof; and (ii) agrees to be bound by the terms and
conditions set forth in the Agreement as if it were an original
signatory thereto; and
2
<PAGE>
(b) the Assignor's obligations under the Agreement shall be reduced by the
Assigned Percentage.
As used herein, the term "Effective Date" means the date on which all of
the following have occurred or have been completed, as reasonably determined by
the Agent:
(1) the delivery to the Agent of an original of this Assignment Agreement
executed by the Assignor and the Assignee;
(2) the payment to the Agent, of all accrued fees, expenses and other
items for which reimbursement is then owing under the Agreement;
(3) the payment to the Agent of the $3,000 processing fee referred to in
Section 14.8(d) (iv) of the Agreement; and
(4) all other restrictions and items noted in Sections 14.8(c), (d) and
(e) of the Agreement have been satisfied.
The Agent shall notify the Assignor and the Assignee of the Effective Date.
The Assignee hereby advises each of you of the following administrative
details with respect to the assigned loans:
(A) Address for Notices:
Institution Name:
Address:
Attention:
Telephone:
Facsimile:
(B) Payment Instructions:
(C) Proposed effective date of assignment: __________ .
The Assignee has delivered to the Agent (or is delivering to the Agent
concurrently herewith) the tax forms referred to in Section 14.14 of the
Agreement, other forms reasonably requested by the Agent, and the original of
each Note held by the Assignor under the Agreement.
3
<PAGE>
Please evidence your consent to and acceptance of the proposed assignment
and delegation set forth herein by signing and returning counterparts hereof to
the Assignor and the Assignee.
[ASSIGNOR]
By:
----------------------------
Its:
---------------------------
[ASSIGNEE]
By:
----------------------------
Its:
---------------------------
ACCEPTED AND CONSENTED TO
this ____ day of _______ , 199__
COMERICA BANK, Agent
By:
-----------------------------
Its:
----------------------------
R.J. TOWER CORPORATION, a
Michigan corporation
By:
-----------------------------
Its:
----------------------------
[This form of Assignment Agreement (including footnotes) is subject in all
respects to the terms and conditions of the Agreement which shall govern in the
event of any inconsistencies or omissions.]
4
<PAGE>
EXHIBIT M-1
COPY OF COMPANY GUARANTY
<PAGE>
EXHIBIT M-2
COPIES OF LETTER OF CREDIT GUARANTY
PLUS TOWER (DELAWARE) JOINDER AGREEMENT
<PAGE>
EXHIBIT M-3
COPIES OF LETTER OF CREDIT GUARANTY (KENTUCKY)
PLUS TOWER (DELAWARE) JOINDER AGREEMENT
<PAGE>
SCHEDULE 1
PRICING MATRIX
<TABLE>
<CAPTION>
Basis for Pricing Level I Level II Level III Level IV Level V
- ----------------------------------------------------------------------------------------------------------------
Leverage Ratio Greater than 3.0 to 1.00 Greater than or Greater than or Greater than Less than
equal to 2.50 equal to 2.0 to or equal to 1.5 1.5 to 1.00
to 1.00 and 1.0 and less to 1.0
less than or than 2.5 to 1.0 and less than
equal to 3.0 2.0 to 1.0
to 1.00
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Eurodollar Margin 1.375% 1.25% 1.00% .75% 0.50%
Applicable Commitment 0.35% 0.30% 0.25% 0.20%
Fee Percentage
Applicable L/C 1.375% 1.25% 1.00% 0.75% 0.50%
Fee Percentage
</TABLE>
<PAGE>
SCHEDULE 2
EXISTING LETTERS OF CREDIT
1. $300,000 Standby Letter of Credit issued on December 14, 1992 by Agent for
the account of Kalamazoo Stamping and Die Company.
<PAGE>
SCHEDULE 7.4
EXCEPTIONS TO LITIGATION COVENANT
<PAGE>
SCHEDULE 7.11
EXCEPTIONS TO COMPLIANCE WITH LAWS COVENANT
<PAGE>
SCHEDULE 9.4
ADDITIONAL PERMITTED INDEBTEDNESS
<PAGE>
SCHEDULE 9.7
ADDITIONAL PERMITTED ENCUMBRANCES
Sincerely,
Terese Latterell
Customer Service Representative
Merrill Corporation
<PAGE>
REVOLVING CREDIT NOTE
$18,000,000 September 6, 1996
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, R.J. Tower
Corporation, a Michigan corporation ("Company") promises to pay to the order of
First Bank National Association ("Bank") care of Comerica Bank, as Agent, at 500
Woodward Avenue, Detroit, MI 48226, in lawful money of the United States of
America, the sum of Eighteen Million Dollars ($18,000,000), or so much of said
sum as may from time to time have been advanced and then be outstanding
hereunder pursuant to the R.J. Tower Corporation Fourth Amended and Restated
Credit Agreement dated as of September 6, 1996, made by and among the Company,
certain banks, including the Bank, and Comerica Bank as Agent for such banks, as
the same may be amended from time to time (the "Agreement"), together with
interest thereon as hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the Applicable
Interest Rate from time to time applicable thereto under the Agreement or as
otherwise determined thereunder, and interest shall be computed, assessed and
payable as set forth in the Agreement.
This Note is a note under which advances (including refundings and
conversions), repayments and readvances may be made from time to time, but only
in accordance with the terms and conditions of the Agreement. This Note
evidences borrowings under, is subject to, is secured in accordance with, and
may be accelerated or matured under, the terms of the Agreement, to which
reference is hereby made. Definitions and terms of the Agreement are hereby
incorporated by reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
Nothing herein shall limit any right granted Bank by any other instrument
or by law.
<PAGE>
This Note replaces (by renewal) that certain Revolving Credit Note dated
May 30, 1996, made in the principal amount of Eighteen Million Dollars
($18,000,000) by Company payable to First Bank National Association.
R.J. TOWER CORPORATION, a
Michigan corporation
By:
---------------------------
Its:
--------------------------
2
<PAGE>
REVOLVING CREDIT NOTE
$18,000,000 September 6, 1996
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, R.J. Tower
Corporation, a Michigan corporation ("Company") promises to pay to the order of
Bank of America Illinois ("Bank") care of Comerica Bank, as Agent, at 500
Woodward Avenue, Detroit, MI 48226, in lawful money of the United States of
America, the sum of Eighteen Million Dollars ($18,000,000), or so much of said
sum as may from time to time have been advanced and then be outstanding
hereunder pursuant to the R.J. Tower Corporation Fourth Amended and Restated
Credit Agreement dated as of September 6, 1996, made by and among the Company,
certain banks, including the Bank, and Comerica Bank as Agent for such banks, as
the same may be amended from time to time (the "Agreement"), together with
interest thereon as hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the Applicable
Interest Rate from time to time applicable thereto under the Agreement or as
otherwise determined thereunder, and interest shall be computed, assessed and
payable as set forth in the Agreement.
This Note is a note under which advances (including refundings and
conversions), repayments and readvances may be made from time to time, but only
in accordance with the terms and conditions of the Agreement. This Note
evidences borrowings under, is subject to, is secured in accordance with, and
may be accelerated or matured under, the terms of the Agreement, to which
reference is hereby made. Definitions and terms of the Agreement are hereby
incorporated by reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
Nothing herein shall limit any right granted Bank by any other instrument
or by law.
<PAGE>
This Note replaces (by renewal) that certain Revolving Credit Note dated
May 30, 1996, made in the principal amount of Eighteen Million Dollars
($18,000,000) by Company payable to Bank of America Illinois.
R.J. TOWER CORPORATION, a
Michigan corporation
By:
---------------------------
Its:
--------------------------
2
<PAGE>
REVOLVING CREDIT NOTE
$39,000,000 September 6, 1996
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, R.J. Tower
Corporation, a Michigan corporation ("Company") promises to pay to the order of
Comerica Bank ("Bank") care of Comerica Bank, as Agent, at 500 Woodward Avenue,
Detroit, MI 48226, in lawful money of the United States of America, the sum of
Thirty Nine Million Dollars ($39,000,000), or so much of said sum as may from
time to time have been advanced and then be outstanding hereunder pursuant to
the R.J. Tower Corporation Fourth Amended and Restated Credit Agreement dated as
of September 6, 1996, made by and among the Company, certain banks, including
the Bank, and Comerica Bank as Agent for such banks, as the same may be amended
from time to time (the "Agreement"), together with interest thereon as
hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the Applicable
Interest Rate from time to time applicable thereto under the Agreement or as
otherwise determined thereunder, and interest shall be computed, assessed and
payable as set forth in the Agreement.
This Note is a note under which advances (including refundings and
conversions), repayments and readvances may be made from time to time, but only
in accordance with the terms and conditions of the Agreement. This Note
evidences borrowings under, is subject to, is secured in accordance with, and
may be accelerated or matured under, the terms of the Agreement, to which
reference is hereby made. Definitions and terms of the Agreement are hereby
incorporated by reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
Nothing herein shall limit any right granted Bank by any other instrument
or by law.
<PAGE>
This Note replaces (by renewal) that certain Revolving Credit Note dated
May 30, 1996, made in the principal amount of Thirty Nine Million Dollars
($39,000,000) by Company payable to Comerica Bank.
R.J. TOWER CORPORATION, a
Michigan corporation
By:
---------------------------
Its:
--------------------------
2
<PAGE>
SWING LINE NOTE
$1,000,000 September 6, 1996
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, R.J. Tower
Corporation, a Michigan corporation ("Company") promises to pay to the order of
Comerica Bank ("Bank") at 500 Woodward Avenue, Detroit, Michigan in lawful money
of the United States of America, the sum of One Million Dollars ($1,000,000), or
so much of said sum as may from time to time have been advanced and then be
outstanding hereunder pursuant to Article 4 of the R.J. Tower Corporation Fourth
Amended and Restated Credit Agreement dated as of September 6, 1996, executed by
and among the Company, certain banks, including the Bank, and Comerica Bank, as
Agent for such banks, as the same may be amended from time to time (the
"Agreement"), together with interest thereon as hereinafter set forth.
The unpaid principal indebtedness from time to time outstanding under this
Note shall be due and payable on the last day of the Interest Period applicable
thereto or as otherwise set forth in the Agreement, provided that no Swing Line
Advance may mature or be payable on a day later than the Revolving Credit
Maturity Date.
Each of the Swing Line Advances made hereunder shall bear interest at the
Prime-based Rate or the Quoted Rate from time to time applicable thereto under
the Agreement or as otherwise determined thereunder, and interest shall be
computed, assessed and payable as set forth in the Agreement.
This Note is a note under which advances, repayments and readvances may be
made from time to time, but only in accordance with the terms and conditions of
the Agreement. This Note evidences borrowings under, is subject to, is secured
in accordance with, and may be accelerated or matured under, the terms of the
Agreement, to which reference is hereby made. Definitions and terms of the
Agreement are hereby incorporated by reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or
<PAGE>
any present or subsequent owner of any property, real or personal, which is now
or hereafter security for this Note.
This Note replaces (by renewal) that certain Swing Line Note dated May 30,
1996, made in the principal amount of $1,000,000 by Company payable to Comerica
Bank.
Nothing herein shall limit any right granted Bank by any other instrument
or by law.
R.J. TOWER CORPORATION, a
Michigan corporation
By:
---------------------------
Its:
--------------------------
2
<PAGE>
EXHIBIT O
FORM OF
REAFFIRMATION OF CERTAIN LOAN DOCUMENTS
This Reaffirmation of Loan Documents dated as of September 6, 1996 (this
"Reaffirmation") executed by, 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 Tower Automotive
Delaware, Inc., formerly known as MascoTech Stamping Technologies, Inc., a
Delaware corporation (collectively, the "Guarantors"), R.J. Tower Corporation, a
Michigan corporation (the "Company"), and Tower Automotive, Inc., a Michigan
corporation (the "Parent") reaffirms the following documents, (collectively, the
"Reaffirmed Loan Documents"):
(a) the Second Amended and Restated Guaranty (Tower-Michigan Debt) dated
as of May 30, 1996 executed by each of the Guarantors in favor of the
Agent for and on behalf of the Banks;
(b) the Amended and Restated Guaranty (Tower-Indiana Debt) dated as of
January 16, 1996 executed by each of the Guarantors, either by
execution thereof or by execution of a Joinder Agreement, in favor of
the Agent for and on behalf of the Banks;
<PAGE>
(c) the Amended and Restated Guaranty (Tower-Kentucky Debt) dated as of
January 16, 1996 executed by the Company and each of the Guarantors,
either by execution thereof or by execution of a Joinder Agreement, in
favor of the Agent for and on behalf of the Banks;
(d) the Second Amended and Restated Security Agreement (Third Party
Pledge), dated as of May 30, 1996 executed by Parent in favor of the
Collateral Agent for and on behalf of the Lenders.
1. Each of the undersigned acknowledges that the Company, the Banks and
the Agent have executed the Fourth Amended and Restated Credit Agreement dated
as of September 6, 1996 (as amended or otherwise modified from time to time, the
"Amended and Restated Credit Agreement"). Capitalized terms not otherwise
defined herein will have the meanings given in the Amended and Restated Credit
Agreement.
2. Each of the undersigned hereby ratifies and confirms its obligations
under the Reaffirmed Loan Documents to which such undersigned is a party and
agrees that such Reaffirmed Loan Documents remain in full force and effect after
giving effect to the effectiveness of the Amended and Restated Credit Agreement
and that, upon such effectiveness, all references in such Reaffirmed Loan
Documents to the "Credit Agreement" or the "Notes" issued thereunder shall be
references to the Amended and Restated Credit Agreement and the Notes issued
thereunder.
3. This Reaffirmation may be signed in counterparts and by the various
parties on separate counterparts. This Reaffirmation shall be governed by and
construed in accordance with the laws of the State of, and be enforceable in,
the State of Michigan. This Reaffirmation shall be binding upon the
undersigned, the Banks, the Lenders, the Agent and the Collateral Agent and
their respective successors and assigns. This Reaffirmation shall be effective
as of the date hereof.
WITNESS, the due execution hereof as of the date and year first above
written.
R.J. TOWER CORPORATION, a Michigan
2
<PAGE>
corporation
By:______________________
Its:_____________________
TOWER AUTOMOTIVE, INC., a Delaware
corporation
By:______________________
Its:_____________________
R.J. TOWER CORPORATION, an Indiana
corporation
By:______________________
Its:_____________________
R.J. TOWER CORPORATION, a Kentucky
corporation
By:______________________
Its:_____________________
3
<PAGE>
KALAMAZOO STAMPING AND DIE
COMPANY
By:_______________________
Its:
TRYLON CORPORATION
By:_______________________
Its:______________________
EDGEWOOD MANUFACTURING CORP.
By:_______________________
Its:______________________
TOWER AUTOMOTIVE DELAWARE, INC., (formerly known as
MascoTech Stamping Technologies, Inc.)
By:_______________________
Its:______________________
Execution Copy
4
<PAGE>
EXHIBIT 11
TOWER AUTOMOTIVE, INC.
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended September 30,
--------------------------------
1996 1995
-------------- ----------------
Net income $ 5,236 $ 2,250
Interest expense on convertible
subordinated notes 25 44
-------------- ----------------
Net income applicable to
common stockholders $ 5,261 $ 2,294
-------------- ----------------
-------------- ----------------
Weighted average number of
common and common
equivalent shares 14,155 10,826
Dilutive effect of outstanding
stock options after application
of the treasury stock method 132 62
Dilutive effect of convertible
subordinated notes assuming
conversion 477 824
--------------- ---------------
Common and common equivalent
shares outstanding 14,764 11,712
--------------- ---------------
--------------- ---------------
Net income per common and
common equivalent share (1) $ 0.36 $ 0.20
--------------- ---------------
--------------- ---------------
(1) The calculation of net income per common and common equivalent share for
the three months ended September 30, 1996 and 1995 are the same on a
primary and fully diluted basis.
<PAGE>
EXHIBIT 11
(CONTINUED)
TOWER AUTOMOTIVE, INC.
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Nine Months Ended September 30,
-----------------------------------
1996 1995
--------------- ---------------
Net income $ 13,726 $ 8,606
Interest expense on convertible
subordinated notes 107 132
---------------- ---------------
Net income applicable to
common stockholders $ 13,833 $ 8,738
---------------- ---------------
---------------- ---------------
Weighted average number of
common and common
equivalent shares 12,156 10,826
Dilutive effect of outstanding
stock options after application
of the treasury stock method 109 39
Dilutive effect of convertible
subordinated notes assuming
conversion 659 824
---------------- --------------
Common and common equivalent
shares outstanding 12,924 11,689
---------------- --------------
---------------- --------------
Net income per common and
common equivalent share (1) $ 1.07 $ 0.75
---------------- --------------
---------------- --------------
(1) The calculation of net income per common and common equivalent share for
the nine months ended September 30, 1996 and 1995 are the same on a
primary and fully diluted basis.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS FOUND ON PAGES 3
AND 4 OF THE COMPANY'S FORM 10-Q FOR THE YEAR TO DATE AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 38,534
<SECURITIES> 0
<RECEIVABLES> 70,071
<ALLOWANCES> 0
<INVENTORY> 24,094
<CURRENT-ASSETS> 144,754
<PP&E> 170,679
<DEPRECIATION> 18,246
<TOTAL-ASSETS> 406,878
<CURRENT-LIABILITIES> 75,192
<BONDS> 0
0
0
<COMMON> 142
<OTHER-SE> 174,406
<TOTAL-LIABILITY-AND-EQUITY> 406,878
<SALES> 280,025
<TOTAL-REVENUES> 280,025
<CGS> 237,118
<TOTAL-COSTS> 237,118
<OTHER-EXPENSES> 15,819
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,302
<INCOME-PRETAX> 22,786
<INCOME-TAX> 9,060
<INCOME-CONTINUING> 13,726
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,726
<EPS-PRIMARY> 1.07
<EPS-DILUTED> 1.07
</TABLE>
