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FOURTH AMENDMENT AND CANADIAN FORBEARANCE AGREEMENT

Default Notice Forbearance Agreement

FOURTH AMENDMENT AND CANADIAN FORBEARANCE AGREEMENT | Document Parties: ACCURIDE CANADA INC | ACCURIDE CORPORATION | ACCURIDE CUYAHOGA FALLS, INC | ACCURIDE DISTRIBUTING, LLC | ACCURIDE EMI, LLC | ACCURIDE HENDERSON LIMITED LIABILITY COMPANY | AKW GENERAL PARTNER LLC | AOT INC | BOSTROM HOLDINGS, INC | BOSTROM SEATING, INC | BOSTROM SPECIALTY SEATING, INC | BRILLION IRON WORKS, INC | DEUTSCHE BANK TRUST COMPANY | ERIE LAND HOLDING, INC | FABCO AUTOMOTIVE CORPORATION | GUNITE CORPORATION | IMPERIAL GROUP HOLDING CORP | JAII MANAGEMENT COMPANY | TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC | TRUCK COMPONENTS INC You are currently viewing:
This Default Notice Forbearance Agreement involves

ACCURIDE CANADA INC | ACCURIDE CORPORATION | ACCURIDE CUYAHOGA FALLS, INC | ACCURIDE DISTRIBUTING, LLC | ACCURIDE EMI, LLC | ACCURIDE HENDERSON LIMITED LIABILITY COMPANY | AKW GENERAL PARTNER LLC | AOT INC | BOSTROM HOLDINGS, INC | BOSTROM SEATING, INC | BOSTROM SPECIALTY SEATING, INC | BRILLION IRON WORKS, INC | DEUTSCHE BANK TRUST COMPANY | ERIE LAND HOLDING, INC | FABCO AUTOMOTIVE CORPORATION | GUNITE CORPORATION | IMPERIAL GROUP HOLDING CORP | JAII MANAGEMENT COMPANY | TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC | TRUCK COMPONENTS INC

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Title: FOURTH AMENDMENT AND CANADIAN FORBEARANCE AGREEMENT
Governing Law: New York     Date: 10/8/2009
Industry: Auto and Truck Parts     Law Firm: White Case     Sector: Consumer Cyclical

FOURTH AMENDMENT AND CANADIAN FORBEARANCE AGREEMENT, Parties: accuride canada inc , accuride corporation , accuride cuyahoga falls  inc , accuride distributing  llc , accuride emi  llc , accuride henderson limited liability company , akw general partner llc , aot inc , bostrom holdings  inc , bostrom seating  inc , bostrom specialty seating  inc , brillion iron works  inc , deutsche bank trust company , erie land holding  inc , fabco automotive corporation , gunite corporation , imperial group holding corp , jaii management company , transportation technologies industries  inc , truck components inc
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Exhibit 10.4

 

EXECUTION COPY

 

FOURTH AMENDMENT AND CANADIAN FORBEARANCE AGREEMENT

 

FOURTH AMENDMENT AND CANADIAN FORBEARANCE AGREEMENT, dated as of October 8, 2009 (together with all schedules hereto, this “ Agreement ”), among ACCURIDE CORPORATION, a Delaware corporation (the “ U.S. Borrower ”), ACCURIDE CANADA INC., a corporation organized and existing under the law of the Province of Ontario (the “ Canadian Borrower ”, and, together with the U.S. Borrower, the “ Borrowers ”), the Subsidiary Guarantors (defined below, and together with the Borrowers, the “ Loan Parties ”) and the Specified Senior Lenders (as defined below) relating to the Senior Prepetition Credit Agreement (as defined below).  Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Prepetition Loan Documents (defined below).

 

W I T N E S S E T H :

 

(A)          WHEREAS, the U.S. Borrower, the Canadian Borrower and the Subsidiary Guarantors party thereto (the “ Subsidiary Guarantors ”), the banks, financial institutions and other institutional lenders party from time to time thereto (collectively, the “ Lenders ”) and DEUTSCHE BANK TRUST COMPANY AMERICAS, as administrative agent for the Lenders (in such capacity, the “ Administrative Agent ”) have entered into (i) that certain Fourth Amended and Restated Credit Agreement dated as of January 31, 2005 (as heretofore amended, supplemented or otherwise modified, the “ Senior Prepetition Credit Agreement ”) and (ii) each other “Loan Document” (as defined in the Senior Prepetition Credit Agreement), (collectively with the Senior Prepetition Credit Agreement, the “ Prepetition Loan Documents ”)

 

(B)           WHEREAS, pursuant to the Senior Prepetition Credit Agreement, the Lenders have made certain loans to the Borrowers;

 

(C)           WHEREAS, as a result of the then likely occurrence of certain Events of Default under the Senior Prepetition Credit Agreement, Citicorp USA, Inc., as Administrative Agent at such time, and the Lenders entered into that certain Temporary Waiver Agreement (the “ First Temporary Waiver Agreement ”), dated as of July 1, 2009, whereby the Lenders agreed to temporarily waive the Scheduled Defaults until the Temporary Waiver Termination Date as so defined therein (hereinafter defined as the “ First Temporary Waiver Termination Date ”);

 

(D)          WHEREAS, as a result of the occurrence and/or continuation of certain Events of Default after the First Temporary Waiver Termination Date under the Senior Prepetition Credit Agreement, the Administrative Agent and the Lenders entered into that certain Second Temporary Waiver Agreement  (the “ Second Temporary Wavier Agreement ”), dated as of August 14, 2009, whereby the Lenders agreed to extend the temporary waiver of the Scheduled Defaults and temporarily waive the Additional Default until the Second Temporary Waiver Termination Date as so defined therein (hereinafter defined as the “ Second Temporary Waiver Termination Date ”);

 

(E)           WHEREAS, as a result of the occurrence and/or continuation of certain Events of Default after the Second Temporary Waiver Termination Date under the Senior Prepetition Credit Agreement, the Administrative Agent and the Lenders entered into that certain

 



 

Third Temporary Waiver Agreement  (the “ Third Temporary Wavier Agreement ”), dated as of September 15, 2009, whereby the Lenders agreed to extend the temporary waiver of the Scheduled Defaults and the Additional Default and temporarily waive the Technical Default until the Third Temporary Waiver Termination Date as so defined therein (hereinafter defined as the “ Third Temporary Waiver Termination Date ”);

 

(F)           WHEREAS, as a result of the occurrence and/or continuation of certain Events of Default after the Third Temporary Waiver Termination Date under the Senior Prepetition Credit Agreement, the Administrative Agent and the Lenders entered into that certain Fourth Temporary Waiver Agreement  (the “ Fourth Temporary Wavier Agreement ”), dated as of September 30, 2009, whereby the Lenders agreed to extend the temporary waiver of the Scheduled Defaults, the Additional Default and the Technical Default until October 5, 2009 (the “ Fourth Temporary Waiver Termination Date ”);

 

(G)           WHEREAS, as a result of the occurrence and/or continuation of certain Events of Default after the Fourth Temporary Waiver Termination Date under the Senior Prepetition Credit Agreement, the Administrative Agent and the Lenders entered into that certain Fifth Temporary Waiver Agreement  (the “ Fifth Temporary Wavier Agreement ”), dated as of October 5, 2009, whereby the Lenders agreed to extend the temporary waiver of the Scheduled Defaults, the Additional Default and the Technical Default until 9:00 a.m. (eastern standard time) on October 8, 2009 (the “ Fifth Temporary Waiver Termination Date ”);

 

(H)          WHEREAS, the Administrative Agent and the Lenders will, if the Scheduled Defaults, the Additional Default or the Technical Default occur(s) and remain(s) continuing as a result of the Fifth Temporary Waiver Termination Date occurring, be entitled to exercise all of their rights and remedies under the Senior Prepetition Credit Agreement, the other Prepetition Loan Documents, applicable law and in equity (such rights, remedies and actions, collectively, “ Enforcement Actions ”), including without limitation, to declare to be immediately due and payable the outstanding principal of the Advances, all accrued interest thereon and all fees and other obligations owing to the Administrative Agent and the Lenders under the Senior Prepetition Credit Agreement and the other Prepetition Loan Documents;

 

(I)            WHEREAS, each of the Loan Parties (other than the Canadian Borrower) and certain of their respective subsidiaries and affiliates expect to file as debtors-in-possession (in such capacity, the “ Debtors ”) under Chapter 11 of the United States Bankruptcy Code (collectively the “ Bankruptcy Filings ”) in the United States Bankruptcy Court for the District of Delaware (the “ Bankruptcy Court ”);

 

(J)            WHEREAS, the Loan Parties have notified the Specified Senior Lenders that unless a forbearance is provided (and without prejudice to the rights and remedies of the Administrative Agent and the Lenders under the Senior Prepetition Credit Agreement, the other Prepetition Loan Documents, applicable law and in equity), the Canadian Borrower would be required to commence with the applicable Canadian court, voluntary proceedings (in such capacity, an “ Additional Debtor ”) under the Companies’ Creditor Arrangement Act (Canada) in an applicable court of competent jurisdiction in Canada due to Events of Default under the Prepetition Loan Documents resulting from the Bankruptcy Filings;

 

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(K)          WHEREAS, the Canadian Borrower does not intend to become an Additional Debtor and is not and shall not be a debtor-in-possession in the Bankruptcy Filings;

 

(L)           WHEREAS, that certain Senior Secured Superpriority Debtor-In-Possession Credit Agreement is expected to be entered into in connection with the Bankruptcy Filings (as amended, supplemented or otherwise modified from time to time, including any substitution, replacement, refinancing, renewal or extension thereof, the “ DIP Credit Agreement ”) by the U.S. Borrower as borrower and the Subsidiary Guarantors as guarantors, Deutsche Bank Trust Company Americas, as DIP administrative agent and DIP collateral agent, Deutsche Bank Trust Company Americas, as DIP issuing bank and DIP swingline bank, Deutsche Bank Securities Inc. as lead arranger, General Electric Capital Corporation as syndication agent, and the DIP lenders from time to time party thereto;

 

(M)         WHEREAS, the Loan Parties have notified the Lenders that the Specified Events of Defaults have occurred and are existing on the date hereof;

 

(N)          WHEREAS, notwithstanding the Specified Events of Default, the Loan Parties have requested, and those certain Senior Lenders under the Senior Prepetition Credit Agreement party to this Agreement, including by way of joinder hereto (collectively, together with their respective successors and assigns, the “ Specified Senior Lenders ”) are willing, through the Forbearance Termination Date (as defined below) with respect to each Specified Senior Lender, to forbear in the enforcement of their remedies set forth in the Prepetition Loan Documents available to it at law or in equity, such forbearance to occur to the extent, and strictly on the terms and conditions, set forth herein.

 

NOW, THEREFORE, in consideration of the premises, the mutual covenants contained herein and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Loan Parties and the Specified Senior Lenders hereby agree as follows:

 

ARTICLE I

 

Definitions; Acknowledgments

 

Section 1.1.  Definitions .  As used in this Agreement, the following terms shall have the meanings set forth below:

 

Canadian Borrower Forbearance Condition ” means, on any date, a condition that will be satisfied if the Canadian Borrower has complied with each of the following covenants set forth in the Senior Prepetition Credit Agreement (as modified below), with such provisions to be interpreted as if the Canadian Borrower is the only “Borrower” and the only “Restricted Subsidiary” thereunder:

 

(a)       Liens, Etc .  The covenants set forth in 5.02(a); provided no Liens in excess of $500,000 may be created, incurred, assumed or suffered to exist after the Effective Date under Section 5.2(a)(x).

 

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(b)       Debt – The covenants set forth in Section 5.02(b); provided that (x) no other Subordinated Debt may be incurred after the Effective Date under Section 5.02(b)(i)(A), (y) no Debt other than unsecured Debt may be incurred after the Effective Date under Section 5.02(b)(iii)(I) and (z) the following U.S. Dollar values shall be adjusted with respect to any Debt to be incurred after the Effective Date:

 

i.              in Section 5.02(b)(iii)(B), $25,000,000 shall be reduced to $500,000;

 

ii.         in Section 5.02(b)(iii)(D), $50,000,000 shall be reduced to $0; and

 

iii.        in Section 5.02(b)(iii)(I), $125,000,000 shall be reduced to $500,000.

 

(c)       Asset Sales – The covenants set forth in Section 5.02(d); provided that no asset sales may be made after the Effective Date other than pursuant to Section 5.02(d)(i).

 

(d)       Investments – The covenants set forth in Section 5.02(e); provided that (x) no investment(s) shall be made pursuant to Section 5.02(e)(ii) in the aggregate in excess of $250,000 after the Effective Date, (y) no investment shall be made after the Effective Date pursuant to Section 5.02(e)(viii) and (z) no investment(s) shall be made pursuant to Section 5.02(e)(xiii) in the aggregate in excess of $500,000 after the Effective Date.

 

(e)       Prepayments, Etc., of Debt – The covenants set forth in Section 5.02(g); provided that no payment, redemption, purchase, defeasance or other satisfaction of any Subordinated Debt may be made after the Effective Date pursuant to Section 5.02(g)(i).

 

(f)        Capital Expenditures – The covenants set forth in Section 5.02(j); provided that in Section 5.02(j), the U.S. Dollar value $50,000,000 shall be reduced to $2,500,000 for the period commencing from and after the Effective Date.

 

Default Interest ” means interest accruing pursuant to, and in accordance with, Section 2.07(b) of the Senior Prepetition Credit Agreement.

 

Forbearance Period ” means the period from the Effective Date to, but excluding, the Forbearance Termination Date.

 

Milestone Termination Date ” means (a) at any time while the DIP Credit Agreement is in effect and the definition of “Milestone Termination Date” is set forth therein, the definition of “Milestone Termination Date” set forth in the DIP Credit Agreement and (b) at any time while the DIP Credit Agreement is not in effect or the definition of “Milestone Termination Date” is not set forth therein, Wednesday, October 14, 2009.

 

“Perfected Account ” means collectively: (a) the accounts set forth in that certain letter agreement dated as of  August 14, 2009 (as amended or modified from time to time) among Canadian Borrower, Administrative Agent and Fifth Third Bank; and (b) all other “Account Collateral” (as defined in that certain Security Agreement dated as of July 27, 2001 (as amended, modified and supplemented from time to time) between Canadian Borrower and Administrative Agent (as successor agent to Citicorp USA, Inc.), herein the “ Canadian Security Agreement ”)

 

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pursuant to which Administrative Agent has a perfected lien in accordance with the terms of the Canadian Security Agreement.

 

Petition Filing Date ” means the date upon which the U.S. Borrower’s Bankruptcy Filing is made by the filing of a voluntary petition or the voluntary conversion of an involuntary bankruptcy petition.

 

Senior Subordinated Notes Forbearance ” means that certain Second Forbearance Agreement, dated as of September 30, 2009, among certain holders of the Senior Subordinated Notes, the U.S. Borrower, certain guarantors of the Senior Subordinated Notes and The Bank of New York Mellon Trust Company (f/k/a The Bank of New York Trust Company, N.A.), as trustee.

 

Specified Events of Default ” means, collectively, the Scheduled Defaults, the Additional Default, the Technical Default and the Defaults and Events of Default under the Specified Sections (as defined below) of the Senior Prepetition Credit Agreement, which have occurred or may in the future occur as a result of:

 

(i)            the Bankruptcy Filings (including failure to pay principal, interest and other obligations existing as of the date of the Bankruptcy Filing as a result of the the acceleration of such obligations under Section 7.01 of the Senior Prepetition Credit Agreement),

 

(ii)           the execution, delivery, filing, performance (including utilization of the cash management system and granting liens required thereunder) and compliance with terms of the DIP Credit Agreement and each “Loan Document” (as defined in the DIP Credit Agreement) and the various instruments, documents and agreements entered into or to be entered into in connection therewith (together, the “ DIP Loan Documents ”) and the Orders (as defined in the DIP Credit Agreement, (the “ Orders ”) and together with the DIP Loan Documents, the “ DIP Documents ”) by the Debtors, and

 

(iii)          any cross-default under Section 7.01(e) of the Senior Prepetition Credit Agreement as a result of a default under any Debt.

 

Specified Sections ” means for any Event of Default or Default arising in connection with clauses (i) and (ii) under the definition of “Specified Events of Default”,

 

(A)          With respect to any action or inaction of the Canadian Borrower:

 

(i)            Section 7.01(a),

 

(ii)           7.01(c) (arising under Section 5.03(a) for failure to give notice of any Specified Event of Default or Section 5.04), and

 

(iii)          7.01(f); and

 

(B)           With respect to any action or inaction of any other Loan Party, other than the Canadian Borrower:

 

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(i)            Section 7.01(a),

 

(ii)           7.01(c) (arising under Section 5.02(a), (b) or (k), Section 5.03(a) for failure to give notice of any Specified Event of Default or Section 5.04),

 

(iii)          Section 7.01(d) (arising under Sections 5.01(b), Section 5.01(l), 5.03(c), 5.03(d), 5.03(e), any of the provisions of the Guarantee and Collateral Agreement and any other provisions of the other Loan Documents executed by the Debtors, which are superseded by or otherwise contravene, violate or cannot be complied with as a result of clauses (i) and (ii) in the definition of Specified Events of Default),

 

(iv)          Section 7.01(e),

 

(v)           Section 7.01(f),

 

(vi)          Section 7.01(i) and

 

(vii)         Section 7.01(k).

 

Section 1.2.  Outstanding Indebtedness .  Each Loan Party under the Prepetition Loan Documents, acknowledges and agrees that (a) as of 5:00 pm New York time on the date hereof, the Obligations include, without limitation, the amounts set forth on Schedule 1(1) attached hereto on account of the outstanding unpaid amount of principal of, accrued and unpaid interest on, and fees and commissions related to, the Advances and on account of the aggregate face amount of the Letters of Credit issued by the Issuing Bank and for fees and expenses (including any attorneys’, accountants’, appraisers’ and financial advisors’ fees that are chargeable or reimbursable under the Prepetition Loan Documents), charges and other obligations incurred in connection therewith as provided in the Prepetition Loan Documents (collectively, the “ Outstanding Indebtedness ”) and (b) such Loan Party is truly and justly indebted to the Lenders and the Administrative Agent for, or (except in the case of the Canadian Borrower) has provided a guaranty for the benefit of the Lenders and the Administrative Agent with respect to, such Outstanding Indebtedness without defense, counterclaim or offset of any kind, and such Loan Party ratifies and reaffirms the validity, enforceability and binding nature of the Obligations and such Outstanding Indebtedness.  The foregoing amounts do not include other fees, expenses and other amounts which are chargeable or otherwise reimbursable under the Prepetition Loan Documents.  None of the Loan Parties has any rights of offset, defenses, claims or counterclaims with respect to any of the Obligations and each of the Loan Parties (other than the Canadian Borrower) are jointly and severally obligated with respect thereto, in each case in accordance with the terms of the applicable Prepetition Loan Documents.  Each Loan Party (including the Canadian Borrower) agrees and acknowledges that Default Interest shall accrue at all times while the Specified Events of Default are continuing, including while this Agreement is in effect.

 

Section 1.3.  Collateral .  Each Loan Party ratifies and reaffirms the validity and enforceability (without defense, counterclaim or offset of any kind) of the Liens granted to secure any of the Obligations and Outstanding Indebtedness by such Loan Party to the

 


(1) SCHEDULE TO BE DISTRIBUTED BY DEUTSCHE BANK.

 

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Administrative Agent, for the benefit of the Lenders, pursuant to the Collateral Documents to which such Loan Party is a party.  Each Loan Party acknowledges and agrees that all such Liens granted by such Loan Party shall continue to secure the Obligations and the Outstanding Indebtedness from and after the date of this Agreement.  Each Loan Party hereby represents and warrants to the Administrative Agent and the Lenders that, pursuant to the Collateral Documents to which such Loan Party is a party, the Obligations and the Outstanding Indebtedness are secured by Liens on all of such Loan Party’s assets to the extent required by the Collateral Documents.

 

Section 1.4.  Termination of Commitments .  Each Loan Party acknowledges and agrees that the Specified Events of Default have occurred, certain are continuing and certain may occur in the future.  As a consequence, the Specified Senior Lenders have instructed the Administrative Agent to terminate the Commitments of the Lenders in their entirety, effective as of the Petition Filing Date.

 

Section 1.5.  Payments Assumed To Be Due .  Notwithstanding that the Lenders have not previously exercised their rights to accelerate obligations, for purposes of determining the rights and claims of the Lenders in the cases commenced by the Bankruptcy Filings, the obligations of the Debtors under the Prepetition Loan Documents, whether fixed or contingent, shall be deemed, without the necessity of any further action or notice, due and payable in full.

 

Section 1.6.  Events of Default .  Each Loan Party (a) acknowledges and agrees that the Scheduled Defaults, the Additional Default and the Technical Default have occurred and are continuing and are in full force and effect, (ii) acknowledges and agrees that the Specified Events of Default have occurred (it being understood that the Technical Default has been cured) and may or will occur from and after the Petition Filing Date and (iii) represents and warrants to the Administrative Agent and the Lenders that no Default or Event of Default (other than the Specified Events of Default) has occurred and continues to exist as of the Effective Date (as defined below) and (b) absent the agreement of the Lenders to enter into the forbearances as provided in this Agreement, the Administrative Agent and the Lenders would be entitled, during the continuance of such Specified Events of Default, at any time to take any and all Enforcement Actions.

 

ARTICLE II

 

Forbearance; Reservation of Rights

 

Section 2.1.  Forbearance .  Subject to the terms and conditions set forth herein, including, without limitation, Sections 1.4, 1.5 and 1.6, each of the Specified Senior Lenders hereby agrees on its behalf and on behalf of its successors and assigns that, prior to the Forbearance Termination Date with respect to such Specified Senior Lender, it shall not exercise or instruct the exercise of, and hereby instructs the Administrative Agent not to exercise, any of the following remedies:

 

(a)           Exercise of foreclosure or similar remedies (including, without limitation, any rights of a secured creditor under the PPSA, BIA or UCC) in respect of collateral of

 

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the Canadian Borrower, to the extent securing obligations of the Canadian Borrower under the Prepetition Loan Documents; and/or

 

(b)           Exercise of any other remedy under the Prepetition Loan Documents against the Canadian Borrower occurring solely by reason of the occurrence of a Specified Event of Default,

 

provided , however , that none of the foregoing shall restrict any Specified Senior Lender party to a Bank Hedge Agreement with any Debtor from designating an Early Termination Date (as defined in such Bank Hedge Agreement) as a result of any of the Specified Events of Default.

 

Section 2.2.   Reservation of Rights .  Subject to the terms and conditions set forth herein and except as specifically contemplated by Section 2.1, each of the Specified Senior Lenders hereby reserves all of its rights, remedies, powers and privileges under the Senior Prepetition Credit Agreement, the other Prepetition Loan Documents, any applicable law and equity and does not waive, or agree to forbear from exercising any remedies with respect to,  any Default or Event of Default which may currently or hereafter exist that is not a Specified Event of Default.  This Section 2.2 shall survive the Forbearance Termination Date with respect to each Specified Senior Lender until the termination of the Prepetition Loan Documents and the indefeasible payment in full


 
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