BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
BANCAMERICA SECURITIES, INC.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxx 00, 0000
X. X. TOWER CORPORATION
0000 XXX Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxx
Vice President-Corporate Development
RE: SENIOR BANK FACILITIES
Dear Xxxxx:
Please refer to (i) the letter agreement dated January 24, 1997 from Bank of
America National Trust and Savings Association ("BofA") and BancAmerica
Securities, Inc. ("BASI") to X. X. Tower Corporation ("Tower"), in which BofA
confirmed its commitment to provide to Tower up to $865 million of senior
secured bank facilities (the "Secured Bank Facilities"), to be arranged by BASI
(the "Financing Letter"), and (ii) the letter agreement dated January 24, 1997
from BofA and BASI to Tower, which set forth the fees payable to BofA and BASI
in connection with the Secured Bank Facilities (the "Fee Letter"). Capitalized
terms not defined herein shall have the meanings set forth in the Financing
Letter.
It is hereby agreed that in the event that Tower Automotive, Inc., the direct
corporate parent of Tower, receives at least $250 million in gross proceeds from
the public offering of its Common Stock, par value $.01 per share, pursuant to
its Registration Statement on Form S-3, File No. 333-21943, filed with the
Securities and Exchange Commission, prior to the consummation of the
Transactions, the Financing Letter shall be amended as follows:
1. In lieu of the Bank Facilities, BofA shall provide up to $750 million
in a six-year, senior reducing revolving credit facility (the
"Offering Facility"), certain of the terms and conditions of which are
set forth in the Summary of Terms and Conditions attached hereto as
Annex A (the "Offering Facility Term Sheet");
2. The text under the heading "Sources and Uses of Funds" shall be
disregarded; and
X. X. TOWER CORPORATION
March 24, 1997
3. References to the "Bank Facilities" and the "Bank Facilities Term
Sheet" shall be deemed to refer to the Offering Facility and the
Offering Facility Term Sheet, respectively.
Except as amended above, the Financing Letter shall remain in full force and
effect.
References in the Fee Letter to the "Financing Letter" shall be deemed to refer
to the Financing Letter as amended hereby.
If you are in agreement with the foregoing, please sign and return the enclosed
copy of this letter to us. This letter may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Xxxxx X. XxXxxxx
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Name: Xxxxx X. XxXxxxx
Title: Vice President
BANCAMERICA SECURITIES, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
Agreed to and accepted:
X. X. TOWER CORPORATION
By: /s/ Xxxxx X. Xxxx
--------------------------
Name: Xxxxx X. Xxxx
--------------------------
Title: Vice President
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X.X. TOWER CORPORATION CONFIDENTIAL
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SUMMARY OF TERMS AND CONDITIONS
X.X. TOWER CORPORATION
$750,000,000 SENIOR REDUCING REVOLVING CREDIT FACILITY
MARCH 24, 1997
CO-BORROWERS: X.X. Tower Corporation, a Michigan corporation ("Tower"
or the "Borrower"), and with respect to certain standby
letters of credit, its wholly-owned subsidiaries, X.X.
Tower Corporation, a Kentucky corporation, and X.X.
Tower Corporation, an Indiana corporation.
GUARANTORS: Borrower's parent, Tower Automotive, Inc. ("Tower
Automotive') and all domestic subsidiaries of Borrower,
now existing or hereafter acquired or established.
PURPOSE: To finance the acquisition of the automotive business
of X.X. Xxxxx ("APC"), refinance existing indebtedness,
provide for working capital, capital expenditures and
other general corporate purposes.
ARRANGER: BancAmerica Securities, Inc.
AGENT: Bank of America NT&SA ("Bank of America" or the
"Agent").
LENDERS: Syndicate of banks acceptable to Tower and the
Arranger.
FACILITY
DESCRIPTION AND AMOUNT: Up to $750,000,000 in a senior reducing revolving
credit facility (the "Revolver" or "Facility") maturing
6 years from the execution of definitive loan
documentation ("Closing"). The Facility will include a
to be determined letter of credit subfacility.
BORROWING OPTIONS: Eurodollar Loans and Base Rate Loans.
SWING-LINE: The Borrower shall have the ability to borrow, on a
direct basis through the Agent up to $25,000,000, under
a Swing-Line to be funded by the Agent and risk
participated by all Lenders.
INTEREST PERIODS: 1, 2, 3, and 6 months.
INTEREST PAYMENTS: Accrued interest on each Base Rate Loan shall be
payable quarterly.
Accrued interest on each Eurodollar Loan shall be
payable at maturity of the Interest Period or
quarterly, if earlier.
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INTEREST RATES AND
LETTER OF CREDIT
FEES: Base Rate Loans will bear interest at the Base Rate,
while Eurodollar Loans will bear interest at the
Eurodollar Rate plus 30.0 basis points at Closing,
after which Eurodollar margins will be determined by
the attached pricing grid.
BASE RATE is defined as the higher of (i) the rate
of interest publicly announced from time to time
by the Agent as its Reference Rate and (ii) 0.5%
per annum above the Federal Funds Rate in effect
on such date. Any change in the Reference Rate
shall take effect at the opening of business on
the date specified in the public announcement of
such change, or on a daily basis in the case of
(ii) above. Accrued interest on each Base Rate
Loan shall be calculated on a 360-day year and
actual days elapsed and is to be payable quarterly
in arrears.
EURODOLLAR RATE is defined as the rate of interest
per annum at which dollar deposits in the
approximate amount of the Agent's Offshore Rate
Loan for such Interest Period would be offered by
the Agent's Grand Cayman Branch, Grand Cayman,
B.W.I. (or such other office as may be designated
for such purpose by the Agent), to major banks in
the offshore dollar interbank market upon request
of such banks at approximately 11:00 a.m. (New
York City time) two Business Days prior to the
commencement of such Interest Period. Interest is
to accrue based on a 360-day year and actual days
elapsed and is to be paid in arrears.
Standby Letter of Credit Fees will be 30.0 basis points
at Closing, after which Standby Letter of Credit Fees
will also be determined by the attached pricing grid.
FACILITY FEE: A per annum fee of 15.00 basis points at Closing, after
which the Facility Fee will be based on the attached
pricing grid. The Facility Fee will be calculated on a
360 day basis on each Lender's commitment regardless of
usage, payable quarterly in arrears. See attached
pricing grid.
DRAWDOWNS: Minimum amounts of $1,000,000 with additional
increments of $100,000 for Base Rate Loans and
$2,000,000 with additional increments of $100,000 for
Eurodollar Loans. Drawdowns are at the Borrower's
option with (i) one day notice for Base Rate Loans, and
(ii) three business days advance notice (by 10:00 a.m.
Chicago time) for dollar Eurodollar Loans.
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MANDATORY REDUCTIONS
IN FACILITY: On each anniversary of the Closing set forth, the Total
Commitment Amount shall be automatically and
permanently reduced to the respective maximum as set
forth below:
ANNIVERSARY OF CLOSING MAXIMUM FACILITY AMOUNT
---------------------- -----------------------
Third $675,000,000
Fourth $600,000,000
Fifth $500,000,000
VOLUNTARY PREPAYMENTS: Base Rate Loans may be prepaid at any time with same
day notice. Eurodollar Loans may be prepaid at any time
with at least three business days advance notice,
subject to compensating the Lenders for any funding
losses and related expenses. Each partial prepayment
of Eurodollar Loans shall be in an aggregate principal
dollar amount of at least $1,000,000 and an integral
multiple of $100,000 and a minimum amount of $500,000
for Base Rate Loans.
TERMINATION OR
REDUCTION OF THE
FACILITY: The Borrower may irrevocably reduce the Facility in
amounts of at least $5,000,000 or a larger integral
multiple of $1,000,000, at any time on three business
days' notice.
REPRESENTATIONS
AND WARRANTIES: Usual and customary for a credit agreement of this
type and for a borrower of Tower's size, industry and
credit quality, including but not limited to:
-Corporate existence and power.
-Corporate authorization; no contravention.
-Governmental authorization.
-Binding effect.
-Litigation.
-No default.
-ERISA compliance.
-Use of proceeds; margin regulations.
-Title to properties.
-Taxes.
-Financial condition, including material adverse
change.
-Environmental matters.
-Regulated entities.
-No burdensome restrictions.
-Copyrights, trademarks, patents and licenses,
etc.
-Subsidiaries.
-Insurance.
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-Solvency.
-Full disclosure.
CONDITIONS OF
EFFECTIVENESS: Usual and customary for a credit agreement of thistype
and for a borrower of Tower's size, industry and credit
quality, including but not limited to:
-Receipt of satisfactory closing documentation
including executed guarantees and opinions of
counsel.
-Corporate authorizations.
-All representations and warranties are true and
complete in all material respects.
-Cancellation of Tower's existing bank credit
facility.
-Acquisition of APC for an amount not to exceed
$650 million on terms and conditions acceptable to
the Lenders.
-Receipt by Tower's parent of at least $250
million in gross proceeds from the sale of its
common stock.
CONDITIONS OF
EACH BORROWING: Usual and customary for a credit agreement of this
type and for a borrower of Tower's size, industry and
credit quality, including but not limited to:
-Absence of default or event of default.
-Accuracy of representations and warranties.
AFFIRMATIVE
COVENANTS: Usual and customary for a credit agreement of this
type and for a borrower of Tower's size, industry and
credit quality, including but not limited to:
-Financial statements.
-Certificates; other information.
-Notices.
-Preservation of corporate existence, etc.
-Maintenance of property.
-Insurance.
-Payment of obligations.
-Compliance with laws, including ERISA.
-Inspection of property and books and records.
-Environmental laws.
-Use of proceeds.
-Further assurances.
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NEGATIVE COVENANTS: Usual and customary for a credit agreement of this
type and for a borrower of Tower's size, industry and
credit quality, including but not limited to:
-Limitation on liens.
-Disposition of assets.
-Consolidations and mergers.
-Loans and investments.
-Limitation on indebtedness.
-Transactions with affiliates.
-Use of proceeds.
-Contingent obligations.
-Joint ventures.
-Lease obligations.
-Restricted payments.
-ERISA.
-Change in business.
-Account changes.
-Financial condition.
FINANCIAL COVENANTS: Would include the following:
(i) MAXIMUM CONSOLIDATED TOTAL INDEBTEDNESS /
CAPITALIZATION. Not permit Tower Automotive's
ratio of Consolidated Total Indebtedness to
Capitalization (defined as Consolidated Total
Indebtedness plus Shareholders' Equity) to be
greater than 65%, reducing to 60% on 12/31/98, 55%
on 12/31/99, and 50% on 12/31/00. The definition
of Consolidated Total Indebtedness will include
all funded indebtedness including both short-term
and long-term debt (including capital leases) and
guarantees of indebtedness (so long as such
amounts are not already included).
(ii) MAXIMUM CONSOLIDATED TOTAL INDEBTEDNESS TO EBITDA.
Not permit Tower Automotive's ratio of
Consolidated Total Indebtedness to EBITDA, as
measured quarterly, with EBITDA calculated on a
rolling four quarter basis, to exceed 3.50:1.00,
reducing to 3.25:1.00 on 12/31/99 and 3.00:1.00 on
12/31/00.
(iii) MINIMUM INTEREST COVERAGE. Not permit Tower
Automotive's ratio of consolidated net earnings,
before interest, and taxes to interest ("EBIT/I"),
as calculated on a rolling four quarter basis, to
fall below 2.50:1.00, increasing to 2.75:1.00 on
12/31/99 and 3.00:1.00 on 12/31/00.
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EVENTS OF DEFAULT: Usual and customary for a credit agreement of this
type and for a borrower of Tower's size, industry and
credit quality, including but not limited to:
-Failure to pay interest, principal or fees
payable under the Credit Agreement.
-Failure to meet covenants, subject to applicable
grace periods.
-Materially inaccurate or false representations or
warranties.
-Cross default to other debt of the Borrower, its
parent and its subsidiaries.
-Change of control or ownership.
-Guarantor defaults.
-Other usual defaults with respect to the
Borrower, including but not limited to insolvency,
bankruptcy, judgments and ERISA.
INCREASED COSTS/
CHANGE OF
CIRCUMSTANCES: The Credit Agreement will contain customary
provisions protecting the Lenders in the event of
unavailability of funding, increased costs and
funding losses. Capital adequacy protection will be
provided for regulatory changes adopted after the
date of the Credit Agreement. The Credit Agreement
will also provide for the general indemnification of
the Agent, Arranger, and their affiliates, as well as
the Lenders (and their respective assignees and/or
participants) by the Borrower.
TRANSFERS AND
PARTICIPATIONS: Each Lender will have the right to transfer or sell
participations in its Loans. Assignments to financial
institutions meeting the criteria of an eligible
assignee (to be defined), in minimum amounts of
$10,000,000, will be permitted with the consent of the
Borrower and the Agent and payment by assignor or
assignee of a processing fee.
EXPENSES: Costs and expenses, including reasonable attorney's
fees (including costs and expenses of outside counsel
and allocated cost of in-house legal services),
incurred at any time by the Agent and the Arranger in
the negotiation, syndication, documentation and closing
shall be paid by the Borrower, regardless of whether
the Facility closes. The Borrower shall pay all costs
and expenses, including legal costs, incurred by the
Agent in connection with any amendment, waiver or
modification to the Facility requested by the Borrower.
The Borrower shall pay all reasonable costs and
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expenses, including legal costs, incurred by the Agent
and any Lender in enforcing any loan document.
REQUIRED BANKS: Lenders having more than 50% of the commitments, or
after termination of commitments, more than 50% of
outstanding loans.
DOCUMENTATION: The Facility will be subject to a credit agreement
("the Credit Agreement") and other documentation, which
shall contain suitable conditions and covenants
mutually acceptable to the Borrower, the Agent and the
Lenders, but not limited to those described above.
GOVERNING LAW
AND JURISDICTION: State of New York.
THIS SUMMARY OF TERMS AND CONDITIONS (THE "TERM SHEET") IS NOT MEANT TO BE, NOR
SHALL IT BE CONSTRUED AS, AN ATTEMPT TO DESCRIBE ALL THE TERMS AND CONDITIONS
THAT WOULD PERTAIN TO THE FACILITY, NOR DO ITS TERMS SUGGEST THE SPECIFIC
PHRASING OF DOCUMENTATION CLAUSES. INSTEAD, IT IS INTENDED TO OUTLINE CERTAIN
BASIC POINTS OF BUSINESS UNDERSTANDING AROUND WHICH THE FACILITY COULD BE
STRUCTURED AND IS SUBJECT TO REVIEW OF LEGAL AND TAX ISSUES.
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PRICING GRID
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X.X. TOWER CORPORATION
$750,000,000
SIX-YEAR SENIOR REDUCING REVOLVING CREDIT FACILITY
(IN BASIS POINTS)
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LEVEL I LEVEL II LEVEL III
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Debt / Capitalization Less than 20% Greater than or Greater than or
equal to 20% but equal to 30% but
less than 30% less than 40%
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Eurodollar Rate Margin 17.00 20.00 25.00
and Letter of Credit Fees
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Facility Fee 8.00 10.00 12.50
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All-In Drawn 25.00 30.00 37.50
Eurodollar Margin
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Base Rate Margin 0.00 0.00 0.00
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* As measured quarterly.
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LEVEL IV LEVEL V LEVEL VI
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Debt / Capitalization Greater than or Greater than or Greater than or
equal to 40% but equal to 50% but equal to 60%
less than 50% less than 60%
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Eurodollar Rate Margin 30.00 42.50 50.00
and Letter of Credit Fees
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Facility Fee 15.00 20.00 25.00
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All-In Drawn 45.00 62.50 75.00
Eurodollar Margin
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Base Rate Margin 0.00 0.00 0.00
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* As measured quarterly.
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