Exhibit
10.1


 


EXECUTION
VERSION


 


FORBEARANCE
AGREEMENT


 


THIS
FORBEARANCE AGREEMENT (this “ Forbearance Agreement”), dated as of August 31,
2009, is entered into by and among certain holders of the 8-1/2% Senior
Subordinated Notes due 2015 (“Notes”) issued pursuant to an indenture
dated as of January 31, 2005 (the “Indenture”) among the Issuer (as
defined below), certain guarantors (the “Guarantors”) and The Bank of
New York Mellon Trust Company, N.A.(f.k.a. The Bank of New York Trust Company,
N.A.), as Trustee (the “Trustee”), which holders are signatories hereto
(each individually a “Holder” and collectively, “Holders”), and
Accuride Corporation, a Delaware corporation (“Issuer”).


 


W  I
T  N  E  S  S  E  T  H:


 


WHEREAS, the Issuer has not
paid the $11,687,500 of interest on the Notes due on August 3, 2009;


 


WHEREAS, pursuant to Section 501(ii) of
the Indenture, such failure is not an Event of Default for a period of 30 days
after the due date (such 30-day period, a “grace period”);


 


WHEREAS, the Issuer is engaged
in discussions with lenders under its Senior Credit Facilities and with the
Holders regarding a restructuring of its capital structure (a “Restructuring”);


 


WHEREAS, the Issuer has
requested, among other things, that Holders provisionally forbear from exercising
their rights and remedies under the Indenture and the Notes as a result of the
foregoing default;


 


WHEREAS, the parties hereto
desire to enter into this Forbearance Agreement to evidence and effectuate such
provisional forbearance, subject to the terms and conditions and to the extent
set forth herein; and


 


WHEREAS, Holders are willing to
agree to provisionally forbear from exercising their rights and remedies under
the Notes and the Indenture and applicable law, subject to the terms and
conditions and to the extent set forth herein.


 


NOW, THEREFORE, in
consideration of the foregoing, and the respective agreements, warranties and
covenants contained herein, the parties hereto agree, covenant and warrant as
follows:


 


1.             Definitions


 


1.1           Definitions.  As used herein, the following terms shall
have the respective meanings given to them below:


 


(a)           “Forbearance
Agreement” shall mean this Forbearance Agreement by and among Issuer and
Holders, as the same now exists or may hereafter be amended, modified, extended,
renewed, restated or replaced.


 


(b)           “Forbearance
Termination Date” shall mean the earliest to occur of September 30,
2009, or the date of the occurrence of any Termination Event.


 

















 


(c)           “Second
Temporary Waiver” shall mean that certain Second Temporary Waiver
Agreement, dated as of August 14, 2009, by and among Accuride Corporation,
Accuride Canada Inc., the lenders party thereto and Citicorp USA, Inc.


 


(d)           “Second Temporary Waiver Termination Date” shall have the meaning ascribed to it in
the Second Temporary Waiver.


 


(e)           “Senior Credit Facilities” shall mean the credit agreement dated as of January 31, 2005, as
amended from time to time, among the Issuer, Accuride Canada Inc., a
corporation organized and existing under the law of the Province of Ontario,
the lenders named therein, Deutsche Bank Trust Company Americas (as
successor to Citicorp USA, Inc.),
as the administrative agent, and other agent parties thereto.


 


(f)            “Termination
Event” shall mean the occurrence of any of the following events:


 


(i)            any
Event of Default, other than the Specified Default;


 


(ii)           any breach of any of the conditions or
agreements provided in this Forbearance Agreement, including, without
limitation, the covenant set forth in Section 4.2 (it being agreed that
prior to declaring a Termination Event for failure to satisfy the covenant in Section 4.2,
the Holders or their representative must first provide the Company with notice
of the breach and at least five (5) full business days to cure such
breach);


 


(iii)          the
Trustee pursues any other remedies or rights permitted under Section 502
or 503 of the Indenture (notwithstanding its having received the notice
required by the last sentence of Section 2.1(a));


 


(iv)          the
lenders under the Senior Credit Facilities accelerate the obligations under the
Senior Credit Facilities or pursue any remedies or rights in respect of the
Senior Credit Facilities permitted by Section 7.01 of the Senior Credit
Facilities; or


 


(v)           the
lenders under the Senior Credit Facilities do not extend the Second Temporary
Waiver Termination Date through and including at least September 30, 2009
or otherwise grant an additional waiver of any Default or Event of Default
(each as defined in the Senior Credit Facilities) under the Senior Credit
Facilities or agree to forbear from taking any Enforcement Action (as defined
in the Second Temporary Waiver) through and including at least September 30,
2009, on or before September 15, 2009.


 


1.2           Interpretation.  All capitalized terms used herein shall have
the meanings assigned thereto in the Indenture unless otherwise defined herein.


 


2.             Provisional
Forbearance as to Specified Default


 


2.1           Acknowledgment of Default.


 


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(a)           The Issuer hereby acknowledges
and agrees that (i) $11,687,500 of interest on the Notes due August 3,
2009 was not paid, and that 30 days thereafter, if such interest remains
unpaid, it would constitute an Event of Default, (the “Specified Default”)
and (ii) immediately upon the occurrence of the Specified Default, the
Trustee or Holders of at least 30% of the principal amount of outstanding Notes
would be entitled to exercise certain rights and remedies under the Indenture,
the Notes and applicable law.  The Issuer
hereby represents and warrants that except for the Specified Default, no other
defaults or Events of Default under the Indenture have occurred and are
continuing as of the date hereof.  Except
as expressly set forth in this Forbearance Agreement, the agreements of the
Trustee and Holders hereunder to forbear provisionally in the exercise of their
respective rights and remedies under the Indenture in respect of the Specified
Default until the Forbearance Termination Date does not in any manner
whatsoever limit any right of any of the Trustee and Holders to insist upon
strict compliance by the Issuer with this Forbearance Agreement, the Indenture
or the Notes.  The Holders, however,
agree to have their representatives inform the Trustee of this Forbearance Agreement
and of their desire to have the Trustee act consistently with the  forbearance arrangements provided for herein.


 


(b)           Holders have not waived
presently, do not intend to waive and may never waive the Specified Default,
and nothing contained herein or the transactions contemplated hereby shall be
construed or interpreted to constitute any such waiver.  The Trustee’s and the Holders’ actions in
entering into this Forbearance Agreement are without prejudice to the rights of
any of the Trustee and the Holders to pursue any and all remedies under the
Indenture pursuant to applicable law or in equity available to it in its sole
discretion upon the termination (whether upon expiration thereof, upon
acceleration or otherwise) of this Forbearance Agreement.


 


2.2           Forbearance.


 


(a)           Subject
to satisfaction of the conditions precedent specified in Section 5 below,
each Holder hereby agrees to forbear, and directs the Trustee to forbear, from
exercising their respective rights and remedies under the Indenture, the Notes
and applicable law, should the Specified Default occur, until the Forbearance
Termination Date.


 


(b)           Upon
the Forbearance Termination Date, the agreement of each Holder to forbear, and
direct the Trustee to forbear, with respect to the Specified Default shall
automatically and without further action immediately terminate and be of no
force and effect, it being understood and agreed that the effect of such
termination will be to permit Trustee and/or Holders to immediately exercise
their respective rights and remedies under the Notes and Indenture, applicable
law or otherwise with respect to the Specified Default, or any other Events of
Default, which shall exist or shall have occurred and be continuing at such
time.


 


2.3           No Waivers; Reservation of
Rights.  Holders have not waived, are
not by this Forbearance Agreement waiving and have no intention of waiving, any
Defaults or Events of Default that have occurred or which may be continuing on
the date hereof or any Defaults or Events of Default which may occur after the
date hereof (whether the same or similar to the Specified Default or
otherwise), and except as expressly set forth herein solely with respect to the
Specified Default, Holders have not agreed to forbear with respect to any of
its rights or


 


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remedies concerning any Defaults or Events of Default, which may have
occurred or are continuing as of the date hereof or which may occur after the
date hereof.


 


3.             Representations
and Warranties


 


The Issuer
hereby represents, warrants and covenants with and to Holders as follows, which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof:


 


3.1           This
Forbearance Agreement has been duly authorized, executed and delivered by
Issuer and is in full force and effect as of the date hereof.  The agreements and obligations of the Issuer
contained herein constitute the legal, valid and binding obligations of the
Issuer enforceable by Holders against it in accordance with their respective
terms, except as such enforceability may be limited by an applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors’ rights generally and by general principles of equity regardless of
whether considered a proceeding in equity or at law.


 


3.2           The
execution, delivery and performance of this Forbearance Agreement are all
within the Issuer’s corporate powers. 
Neither the execution, delivery or performance of this Forbearance
Agreement by the Issuer, nor the consummation of the transactions contemplated
herein, nor compliance with the provisions hereof (a) has violated or will
violate any law or regulation or any order or decree of any court or
governmental authority in any respect, or (b) does or shall conflict with
or result in the breach of, or constitute a default in any respect under, any
indenture, mortgage, deed of trust, security agreement, agreement or instrument
to which Issuer is a party or Issuer or its property may be bound, or (c) has
violated or will violate any provision of the certificate of incorporation,
by-laws or other organizational or governing documents of the Issuer, or (d) has
or will result in, or require, the creation or imposition of any lien, charge,
security interest or other encumbrance on any of the assets or properties of
the Issuer.


 


4.             Restructuring Milestones and Related Covenant


 


4.1           The
Issuer will:


 


(a)           deliver to Holders’ counsel a final
term sheet in form and substance satisfactory to Holders (the “Final Term
Sheet”) on or before September 15, 2009; and


 


(b)           deliver to Holders’ counsel a written
acknowledgement of the Steering Committee of the lenders under the Senior
Credit Facilities affirming that the Final Term Sheet is in form and substance
satisfactory to such lenders on or before September 15, 2009.


 


Any of the dates set forth in this Section 4.1
may be extended with the consent of Holders holding a majority of the principal
amount of the Notes then outstanding.


 


4.2           The
Special Committee of the Board of Directors of Accuride and its advisors will
diligently pursue negotiations with Holders (or a designated subset of Holders)
of the terms of a Restructuring and will conduct such negotiations in good
faith.  If the Special Committee of


 


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the Board of Directors of Accuride and its
advisors fail to pursue good faith negotiations with the Holders (or a
designated subset of Holders) for a Restructuring, the Holders (or a designated subset of Holders) or their
representative may provide the Company with notice of the breach of this Section 4.2,
and if such breach is not cured in five (5) business days, they may
terminate this Forbearance Agreement and shall have no further recourse against
the Company on account of such breach.


 


5.             Conditions
to Effectiveness


 


The effectiveness of the forbearance made
pursuant to this Forbearance Agreement shall be subject to the satisfaction of
each of the following conditions precedent and the effective date of this
Forbearance Agreement (the “Effective Date”) shall be on the date on
which each of the following conditions precedent has been satisfied:


 


5.1           The Issuer or its counsel
shall have received counterparts of this Forbearance Agreement, duly
authorized, executed and delivered, by Holders of a percentage of the principal
amount of the outstanding Notes that is reasonably acceptable to the Issuer as
indicated by a written confirmation provided by the Issuer to the counsel to
the “ad hoc committee” of Holders of the Notes.


 


5.2           The Issuer shall have paid, or concurrently herewith will pay, all
reasonable documented fees and expenses (including attorney fees) of the
Trustee as of the date hereof and all reasonable documented fees and expenses
of the Holders as of the date hereof (including one attorney for all Holders,
which is currently Milbank, Tweed, Hadley & Mccloy LLP and the fees of
a single financial advisor for all Holders) incurred in connection with the
Forbearance Agreement and the discussions regarding a restructuring of its
capital structure.


 


6.             Provisions
of General Application


 


6.1           Effect of this Forbearance
Agreement.  Except as modified
pursuant hereto, no other changes or modifications to the Notes and Indenture
are intended or implied and in all other respects the Notes and Indenture are
hereby specifically ratified, restated and confirmed by all parties hereto as
of the effective date hereof.


 


6.2           Merger.  This Forbearance Agreement and the documents
executed in connection herewith represent the entire expression of the
agreement of the Issuer and Holders regarding the matters set forth herein. No
modification, rescission, waiver, release or amendment of any provision of this
Forbearance Agreement shall be made, except by a written agreement signed by
the Issuer and Holders.


 


6.3           Governing Law; Submission
to Jurisdiction; Waiver of Jury Trial.  
THIS FORBEARANCE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES
ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE ISSUER AND EACH HOLDER
HEREBY


 


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IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS FORBEARANCE
AGREEMENT AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE ISSUER
AND EACH HOLDER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY
DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY HOLDER OF
THE NOTES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUER OR ANY GUARANTOR IN
ANY OTHER JURISDICTION.


 


6.4           Binding Effect; No Third
Party Beneficiaries.  This
Forbearance Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their respective successors and assigns, including, with
respect to each Holder, its successor-in-interest with respect to the
Notes.  This Forbearance Agreement is
solely for the benefit of each of the parties hereto and their respective
successors and assigns, and no other Person shall have any right, benefit,
priority or interest under, or because of the existence of, this Forbearance
Agreement.


 


6.5           Severability.  In case any provision of this Forbearance
Agreement shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.


 


6.6           Counterparts.  This Forbearance Agreement may be executed in
any number of counterparts, but all of such counterparts shall together
constitute but one and the same agreement. 
In making proof of this Forbearance Agreement, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto.  Delivery of an
executed counterpart of this Forbearance Agreement by facsimile or other
electronic method of transmission shall have the same force and effect as
delivery of an original executed counterpart of this Forbearance
Agreement.  Any party delivering an
executed counterpart of this Forbearance Agreement by facsimile or other
electronic method of transmission also shall deliver an original executed
counterpart of this Forbearance Agreement, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Forbearance Agreement as to such party or any other
party.


 


7.             Release
of Claims.


 


The Issuer, on behalf of itself, and any Person claiming by, through,
or under such Issuer (collectively, the “Issuer Group”) acknowledges
that it has no claim, counterclaim, setoff, recoupment, action or cause of
action of any kind or nature whatsoever (“Claims”) against all or


 


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any of the Trustee or any of the Holders or any of their respective
directors, officers, employees, agents, attorneys, financial advisors, legal
representatives, affiliates, shareholders, partners, successors and assigns
(the Trustee or any of the Holders and their respective directors, officers,
employees, agents, attorneys, financial advisors, legal representatives,
affiliates, shareholders, partners, successors and assigns are jointly and
severally referred to as the “Holder Group”), that directly or
indirectly arise out of or are based upon or in any manner connected with any “Prior
Event” (as defined below), and the Issuer on behalf of itself and all the other
members of the Issuer Group hereby releases each member of the Holder Group
from any liability whatsoever should any Claims nonetheless exist.  As used herein the term “Prior Event”
means any transaction, event, circumstances, action, failure to act or
occurrence of any sort or type, whether known or unknown, which occurred,
existed, was taken, permitted or begun prior to the execution of this
Forbearance Agreement and occurred, existed, was taken, permitted or begun in
accordance with, pursuant to or by virtue of any terms of the Indenture, this
Forbearance Agreement, or any of the transactions contemplated herein or
therein or any oral or written agreement relating to any of the foregoing, including
without limitation any approval or acceptance given or denied.  Notwithstanding the foregoing, this Section 7
shall not apply to (i) Claims directly or indirectly arising out of or
based upon any breach of the confidentiality agreement entered into between a
member of the Holder Group and the Issuer, if any, in connection with the
Restructuring, or (ii) any Claims of bad faith or willful misconduct on
the part of the Holder Group, in each case relating to breach or conduct, as
the case may be, which occurred or existed and was unknown to the Issuer prior
to the execution of this Forbearance Agreement. This Section 7 shall
survive the termination of this Forbearance Agreement.


 


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