Item 1.01 Entry into a Material Agreement
Fourth Amended
and Restated Revolving Credit and Guaranty Agreement
On March 7, 2017,
Tower International, Inc. (the “Company”) entered into a Fourth Amended and Restated Revolving Credit and Guaranty
Agreement, dated as of March 7, 2017 (the “Amended Revolving Credit Facility Agreement”), by and among Tower Automotive
Holdings USA, LLC (the “Borrower”), the Company, Tower Automotive Holdings I, LLC (“Holdco”), Tower Automotive
Holdings II(a), LLC (“Foreign Holdco”), the subsidiary guarantors named therein (the “Revolver Guarantors”),
the financial institutions from time to time party thereto, as Lenders, and JPMorgan Chase Bank, N.A., as an Issuing Lender, as
a Swing Line Lender and as Administrative Agent (in such capacity, the “Revolver Agent”) for the Lenders.
The Amended Revolving
Credit Facility Agreement amends and restates in its entirety the Third Amended and Restated Revolving Credit and Guaranty Agreement,
dated as of September 17, 2014 (the “Existing Revolving Credit Facility Agreement”), by and among the Borrower, Holdco,
Foreign Holdco, the subsidiary guarantors named therein, the lenders party thereto and the Revolver Agent. The Amended Revolving
Credit Facility Agreement provides for a cash flow revolving credit facility (the “Amended Revolving Credit Facility”)
in the aggregate amount of up to $200 million. The expiration date for the Amended Revolving Credit Facility is March 7, 2022.
Advances under the
Amended Revolving Credit Facility will bear interest at an alternate base rate (which is the highest of the Prime Rate, the Federal
Funds Rate plus 0.50% and the Adjusted LIBOR Rate (as each such term is defined in the Amended Revolving Credit Facility Agreement)
for a one month interest period plus 1%) plus a base rate margin or LIBOR plus a Eurodollar margin. As of the date of the Amended
Revolving Credit Facility Agreement, the applicable margin for LIBOR based borrowings was 2.50% per annum and the applicable margin
for base rate borrowings was 1.50% per annum. Subsequent to the delivery of financial statements to the Lenders pursuant to the
Amended Revolving Credit Facility Agreement, the applicable margins will be adjusted for changes in the Total Net Leverage Ratio
(as defined in the Amended Revolving Credit Facility Agreement) as follows:
Total Net Leverage Ratio
|
Alternate Base
Rate Margin
|
|
Eurodollar
Margin
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Less than 1.25 to 1.00
|
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1.00%
|
|
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2.00%
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Greater than or equal to 1.25 to 1.00 but less than 1.75 to 1.00
|
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1.25%
|
|
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2.25%
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Greater than or equal to 1.75 to 1.00 but less than 2.25 to 1.00
|
|
1.50%
|
|
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2.50%
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Greater than or equal to 2.25 to 1.00
|
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1.75%
|
|
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2.75%
|
The Amended Revolving
Credit Facility is guaranteed by the Company, on an unsecured basis, and certain of the Company’s direct and indirect domestic
subsidiaries, on a secured basis. The Amended Revolving Credit Facility is secured by the same assets of the Borrower and the subsidiary
guarantors that secured the obligations under the Existing Revolving Credit Facility Agreement. The Borrower’s and each subsidiary
guarantor’s pledge of such assets as security for the obligations under the Amended Revolving Credit Facility is evidenced
by an Amended and Restated Revolving Credit Security Agreement, dated as of March 7, 2017, among the Borrower, the guarantors party
thereto and the Revolver Agent (the “Revolver Security Agreement”).
The Amended Revolving
Credit Facility Agreement contains customary covenants applicable to certain of the Company’s subsidiaries. The Amended Revolving
Credit Facility Agreement contains financial maintenance covenant ratios requiring the Borrower and the Revolver Guarantors to
maintain a ratio, as of the last day of any fiscal quarter, of (i) consolidated adjusted EBITDA to consolidated interest charges,
each as defined in the Amended Revolving Credit Facility Agreement, of not less than 2.75 to 1.00 on a rolling four quarter basis;
and (ii) total net debt to consolidated adjusted EBITDA not to exceed 3.50 to 1.00 on a rolling four quarter basis.
The Amended Revolving
Credit Facility Agreement includes customary events of default and amounts due thereunder may be accelerated upon the occurrence
of an event of default.
The description of
the Amended Revolving Credit Facility Agreement is qualified in its entirety by reference to the full text of the Amended Revolving
Credit Facility Agreement, which is attached hereto as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference
herein. The description of the Revolver Security Agreement is qualified in its entirety by reference to the full text of the Revolver
Security Agreement, which is attached hereto as Exhibit 10.2 to this Current Report on Form 8-K and incorporated by reference herein.
Third Refinancing
Term Loan Amendment
On April 23, 2013,
the Company entered into a Term Loan and Guaranty Agreement, dated as of April 23, 2013 (as amended pursuant to a First Refinancing
Term Loan Amendment, dated as of July 29, 2013 and a Second Refinancing Term Loan Amendment and Additional Term Loan Amendment
dated as of January 31, 2014, the “Term Loan Agreement”) by and among the Borrower, the Company, Holdco, Foreign Holdco
and certain other domestic subsidiaries of the Company as guarantors, each of the financial institutions from time to time party
thereto as Lenders, and Citibank, N.A., as administrative agent (in such capacity, the “Term Loan Agent”) for the Lenders,
pursuant to which, among other things, the Lenders disbursed term loans to Borrower in the aggregate amount of $420 million. As
of March 7, 2017, term loans in the aggregate principal amount of approximately $361.5 million were outstanding (the “Outstanding
Term Loans”) under the Term Loan Agreement.
On March 7, 2017, the
Term Loan Agreement was further amended pursuant to a Third Refinancing Term Loan Amendment and Amendment and Restatement Agreement,
dated as of March 7, 2017 (the “Third Term Loan Amendment”, and the Term Loan Agreement as amended by the Third Term
Loan Amendment, the “Amended Term Loan Agreement”), by and among the Company, the Borrower, Holdco, Foreign Holdco
and certain other domestic subsidiaries of the Company as guarantors (the “Term Guarantors”), each of the financial
institutions party thereto as Refinancing Term Lenders and the Term Loan Agent, pursuant to which, among other things, the Outstanding
Term Loans were refinanced in full. After giving effect to the refinancing of the Outstanding Term Loans pursuant to the Third
Term Loan Amendment, there are term loans in the aggregate principal amount of $361.5 million outstanding under the Amended Term
Loan Agreement.
Additionally, the interest
rate margins applicable to term loans disbursed under the Amended Term Loan Agreement were lowered by 25 basis points to 1.75%
in the case of term loans bearing interest at the alternate base rate and to 2.75% in the case of term loans bearing interest at
the Adjusted LIBO Rate.
The Amended Term Loan
Agreement is guaranteed by the Company, on an unsecured basis, and certain of the Company’s direct and indirect domestic
subsidiaries, on a secured basis. The Amended Term Loan Agreement is secured by the same assets of Borrower and the subsidiary
guarantors that secured the obligations under the Term Loan Agreement. The Borrower’s and each subsidiary guarantor’s
pledge of such assets as security for the obligations under the Amended Term Loan Agreement is evidenced by an Amended and Restated
Term Loan Security Agreement, dated as of March 7, 2017, among the Borrower, the guarantors party thereto and the Term Loan Agent
(the “Term Loan Security Agreement”).
The Amended Term Loan
Agreement contains customary covenants applicable to certain of the Company’s subsidiaries. The Amended Term Loan Agreement
contains financial maintenance covenant ratios requiring the Borrower and the Term Guarantors to maintain a ratio, as of the last
day of any fiscal quarter, of total net debt to consolidated adjusted EBITDA not to exceed 3.75 to 1.00 on a rolling four quarter
basis.
The Amended Term Loan
Agreement includes customary events of default and amounts due thereunder may be accelerated upon the occurrence of an event of
default.
Except as expressly
modified by the Third Term Loan Amendment, the Term Loan Agreement remains in full force and effect.
The description of
the Third Term Loan Amendment is qualified in its entirety by reference to the full text of the Third Term Loan Amendment, which
is attached hereto as Exhibit 10.3 to this Current Report on Form 8-K and incorporated by reference herein.
The description of
the Term Loan Agreement is qualified in its entirety by reference to the full text of the Term Loan Credit Agreement, which is
attached hereto as Exhibit 10.4 to this Current Report on Form 8-K and incorporated by reference herein.
The description of
the Term Loan Security Agreement is qualified in its entirety by reference to the full text of the Term Loan Security Agreement,
which is attached hereto as Exhibit 10.5 to this Current Report on Form 8-K and incorporated by reference herein.