September 16, 1998
JPE, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx and Xx. Xxxxx X. Xxxxx
RE: FORBEARANCE AGREEMENT AMONG COMERICA BANK, NBD BANK, NATIONAL BANK OF
CANADA, XXXXXX TRUST AND SAVINGS BANK, AND BANK ONE, DAYTON, N.A.
(COLLECTIVELY, THE "BANKS"), COMERICA BANK, AS AGENT FOR THE BANKS
("AGENT"), JPE, INC. ("COMPANY") AND ALLPARTS, INCORPORATED ("API"), DAYTON
PARTS, INC. ("DPI"), SAC CORPORATION, STARBOARD INDUSTRIES, INC. ("SBI"),
INDUSTRIAL & AUTOMOTIVE FASTENERS, INC. ("IAF"), PLASTIC TRIM, INC.
("PTI"), BRAKE, AXLE AND TANDEM COMPANY CANADA INC. AND JPE FINISHING, INC.
(COLLECTIVELY, "GUARANTORS") DATED AUGUST 10, 1998, AND AMENDED BY A FIRST
AMENDMENT DATED AUGUST 31, 1998 AND A SECOND AMENDMENT DATED SEPTEMBER 4,
1998 (AS AMENDED, THE "FORBEARANCE AGREEMENT")
Dear Xx. Xxxxxxx and Xx. Xxxxx:
Company and Guarantors have requested that Banks extend the forbearance provided
for in the Forbearance Agreement. Company has informed Banks that API has
entered into a definitive agreement to sell substantially all of its assets.
Company has also informed Banks that PTI and SBI filed voluntary chapter 11
bankruptcy petitions on September 15, 1998.
Subject to written acceptance by Company and Guarantors of the following terms
and conditions, Agent and Banks are willing to grant certain accommodations and
to forbear until September 30, 1998, subject to earlier termination as provided
below, from further action to collect the Indebtedness:
1. All capitalized terms not defined in this third amendment ("Third
Amendment") to the Forbearance Agreement shall have the meanings described
in the Forbearance Agreement and/or the Loan Documents.
2. Except as modified by this Third Amendment, the Indebtedness and the
financing arrangements among Agent, Banks, Company and Guarantors shall
continue to be governed by the covenants, terms and conditions of the
Forbearance Agreement and the Loan Documents, which are ratified and
confirmed. The liens and security interests granted to Agent and Banks
under the Loan Documents and the Forbearance Agreement are also ratified
and confirmed by Company and the undersigned Guarantors. This Third
Amendment shall be binding upon and shall inure to the benefit of Agent,
Banks, Company and the undersigned Guarantors, and their respective
successors and assigns.
3. Company and the undersigned Guarantors acknowledge that Agent and Banks are
under no obligation to advance funds or extend credit to Company and
Guarantors under the Forbearance Agreement, as amended, the Credit
Agreement or other Loan Documents, or otherwise.
4. The advisory Advance Formula is revised to eliminate any availability on
account of any collateral of PTI and/or SBI. The overformula amount (set
forth in clause (iv) of paragraph 6 of the Forbearance Agreement is
increased from $42,100,000 to $44,911,000. The Cap is increased to
$107,387,000. All payments received from, or on account of, PTI and/or SBI
shall be applied to the Indebtedness (to principal or interest as elected
by Banks) and to the extent applied to principal shall permanently reduce
the Cap dollar for dollar.
5. Subject to maintaining the sum of availability under the advisory Advance
Formula (as revised in paragraph 4 above) plus the PTI/SBI Adjustment
(defined below) equal to or greater than the aggregate of (i) Advances
under the Revolving Credit and Swing Line and (ii) the Letter of Credit
Obligations, and provided there are no defaults under the terms of the
Forbearance Agreement, as amended, and no further defaults under the Loan
Documents, Banks may, in their sole discretion, continue to advance to
Company under the Revolving Credit Loan, in accordance with the Loan
Documents, as amended, through September 30, 1998. The "PTI/SBI Adjustment"
is $24,000,000 less all payments received from or, on account of PTI and/or
SBI which reduce the Cap. Company and Guarantors agree that:
(a) from September 14, 1998 forward, the Company shall not borrow for the
benefit of PTI and/or SBI; and
(b) neither Company nor any of the Guarantors shall make intercompany
transfers of any kind to or for the benefit of PTI and/or SBI.
6. Company and the undersigned Guarantors approve the form of the Interim
Order Authorizing Postpetition Financing and Providing Adequate Protection
prepared for each of PTI and SBI and its execution by Agent. It is a
default under the Forbearance Agreement:
(a) If both Financing Orders are not entered in the form approved by the
Agent or if, after entry, one or both are modified (unless Agent
approves the modifications);
(b) If PTI and SBI default under either of the Financing Orders; or
(c) If PTI and/or SBI take action adverse to Banks.
7. Company and the undersigned Guarantors hereby represent and warrant that
(a) execution, delivery and performance of this Third Amendment are not in
contravention of law or the terms of any agreement by which they are bound,
and do not require the consent or approval of any governmental body,
agency, or authority, and this Third Amendment will be valid and binding in
accordance with its terms; (b) the continuing representations and
warranties of Company and the undersigned Guarantors set forth in Loan
Documents are true and correct on and as of the date hereof with the same
force and effect as made on and as of the date hereof other than as
previously specified in writing to Agent and Banks; and (c) no event of
default, or condition or event which, with the giving of notice or the
running of time, or both, would constitute an event of default under the
Forbearance Agreement has occurred and is continuing as of the date hereof
other than as previously specified in writing to Agent and Banks.
8. COMPANY, THE UNDERSIGNED GUARANTORS, AGENT AND BANKS ACKNOWLEDGE AND AGREE
THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE
WAIVED. EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO
CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR
THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF
LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY
RELATED TO, THIS THIRD AMENDMENT, THE FORBEARANCE AGREEMENT, THE LOAN
DOCUMENTS OR THE INDEBTEDNESS.
9. COMPANY AND THE UNDERSIGNED GUARANTORS, IN EVERY CAPACITY, INCLUDING, BUT
NOT LIMITED TO, AS SHAREHOLDERS, PARTNERS, OFFICERS, DIRECTORS, INVESTORS
AND/OR CREDITORS OF COMPANY AND/OR GUARANTORS, OR ANY ONE OR MORE OF THEM,
HEREBY WAIVE, DISCHARGE AND FOREVER RELEASE AGENT, BANKS, AND THEIR
EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS, STOCKHOLDERS AND SUCCESSORS AND
ASSIGNS, FROM AND OF ANY AND ALL CLAIMS, CAUSES OF ACTION, DEFENSES,
COUNTERCLAIMS OR OFFSETS AND/OR ALLEGATIONS COMPANY AND/OR GUARANTORS MAY
HAVE, OR MAY HAVE MADE, OR ARE BASED ON FACTS OR CIRCUMSTANCES ARISING, AT
ANY TIME UP THROUGH AND INCLUDING THE DATE OF THIS THIRD AMENDMENT, WHETHER
KNOWN OR UNKNOWN, AGAINST ANY OR ALL OF AGENT, BANKS, THEIR EMPLOYEES,
OFFICERS, DIRECTORS, ATTORNEYS, STOCKHOLDERS AND SUCCESSORS AND ASSIGNS.
Agent and Banks reserve the right to terminate their forbearance prior to
September 30, 1998 in the event of any new defaults under the Loan Documents or
a default under the Forbearance Agreement as amended by this Third Amendment, in
the event of further deterioration in the financial condition of Company or
Guarantors or further deterioration in Agent's or Banks' collateral position,
and/or in the event Agent or Banks, for any reason, believes that the prospect
of payment or performance is impaired.
Very truly yours,
COMERICA BANK, Agent
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx
Its: Vice President
Special Assets Group
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000
(000) 000-0000 Fax
COMERICA BANK NBD BANK
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxx
------------------------- -------------------------
Its: Vice President Its: First Vice President
NATIONAL BANK OF CANADA XXXXXX TRUST and SAVINGS BANK
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------- -------------------------
Its: Vice President Its: Sr. Vice President
By: /s/
-------------------------
Its: Group Vice President
BANK ONE, DAYTON, N.A.
By: /s/ Xxxxx X. Xxxxx
-------------------------
Its: Assistant Vice President
ACKNOWLEDGED AND AGREED:
JPE, INC. SAC CORPORATION
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
------------------------- -------------------------
Its: President Its: Vice President
Date: 9/16/98 Date: 9/16/98
ALLPARTS, INCORPORATED INDUSTRIAL & AUTOMOTIVE
FASTENERS, INC.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
------------------------- -------------------------
Its: Vice President Its: Vice President
Date: 9/16/98 Date: 9/16/98
DAYTON PARTS, INC. BRAKE, AXLE AND TANDEM
COMPANY CANADA INC.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
------------------------- --------------------------
Its: Vice President Its: Vice President
Date: 9/16/98 Date: 9/16/98
JPE FINISHING, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------
Its: Vice President
Date: 9/16/98
