Credit Agreementdtd.1/21/98.

Exhibit 10.20


EXECUTION COPY


$275,000,000


CREDIT AGREEMENT


Dated as of January 21, 1998


Among


ACCURIDE CORPORATION

and

ACCURIDE CANADA INC.AS BORROWERS


and


THE INITIAL LENDERS, INITIAL ISSUING BANK AND
SWING LINE BANK NAMED HEREIN
AS INITIAL LENDERS, INITIAL ISSUING BANK AND SWING LINE BANK


and


CITICORP USA, INC.
AS ADMINISTRATIVE AGENT


and

CITICORP SECURITIES, INC.
AS ARRANGER


and

BANKERS TRUST COMPANY
AS SYNDICATION AGENT

and

WELLS FARGO BANK N.A.
AS DOCUMENTATION AGENT


T A B L E O F C O N T E N T S


SECTION PAGE


ARTICLE I


DEFINITIONS AND ACCOUNTING TERMS


1.01. Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . 2
1.02. Computation of Time Periods. . . . . . . . . . . . . . . . . . . 32
1.03. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . 32
1.04. Currency Equivalent. . . . . . . . . . . . . . . . . . . . . . . 32


ARTICLE II


AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT


2.01. The Advances . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.02. Making the Advances. . . . . . . . . . . . . . . . . . . . . . . 34
2.03. Issuance of and Drawings and Reimbursement Under Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.04. Repayment of Advances. . . . . . . . . . . . . . . . . . . . . . 38
2.05. Termination or Reduction of the Commitments. . . . . . . . . . . 40
2.06. Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.07. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.08. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.09. Conversion of Advances . . . . . . . . . . . . . . . . . . . . . 45
2.10. Increased Costs, Etc.. . . . . . . . . . . . . . . . . . . . . . 46
2.11. Payments and Computations. . . . . . . . . . . . . . . . . . . . 48
2.12. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
2.13. Sharing of Payments, Etc.. . . . . . . . . . . . . . . . . . . . 53
2.14. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . 54
2.15. Defaulting Lenders . . . . . . . . . . . . . . . . . . . . . . . 54


ARTICLE III


CONDITIONS OF LENDING


3.01. Conditions Precedent to the Initial . . . . . . . . . . . . . . 56
3.02. Conditions Precedent to Each Borrowing and Issuance. . . . . . . 61
3.03. Determinations Under Section 3.01. . . . . . . . . . . . . . . . 61


ARTICLE IV


REPRESENTATIONS AND WARRANTIES


4.01. Representations and Warranties of Each Borrower. . . . . . . . . 62


ARTICLE V


COVENANTS OF THE BORROWERS


5.01. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . 67
5.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 70
5.03. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . 78
5.04. Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . 81


ARTICLE VI


GUARANTY


6.01. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
6.02. Guaranty Absolute. . . . . . . . . . . . . . . . . . . . . . . . 83
6.03. Waivers and Acknowledgments. . . . . . . . . . . . . . . . . . . 85
6.04. Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . . 86
6.05. Continuing Guaranty; Assignments . . . . . . . . . . . . . . . . 86


ARTICLE VII


EVENTS OF DEFAULT


7.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . 87


ARTICLE VIII


THE ADMINISTRATIVE AGENT


8.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . 89
8.02. Administrative Agent's Reliance, Etc.. . . . . . . . . . . . . . 90
8.03. Citicorp and Affiliates. . . . . . . . . . . . . . . . . . . . . 90
8.04. Lender Party Credit Decision . . . . . . . . . . . . . . . . . . 90
8.05. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 91
8.06. Successor Administrative Agents. . . . . . . . . . . . . . . . . 92
8.07. Arranger, Syndication Agent and Documentation Agent. . . . . . . 93


ARTICLE


MISCELLANEOUS


9.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 93
9.02. Notices, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.03. No Waiver; Remedies. . . . . . . . . . . . . . . . . . . . . . . 94
9.04. Costs, Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 95
9.05. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . 96
9.06. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . 96
9.07. Assignments and Participations . . . . . . . . . . . . . . . . . 97
9.08. Replacements of Lenders Under Certain Circumstances. . . . . . . 99
9.09. Execution in Counterparts. . . . . . . . . . . . . . . . . . . . 100
9.10. No Liability of the Issuing Bank . . . . . . . . . . . . . . . . 100


9.11. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . 100
9.12. Jurisdiction, Etc. . . . . . . . . . . . . . . . . . . . . . . . 101
9.13. Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
9.14. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . 102
9.15. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . 102


SCHEDULES


Schedule I Commitments and Applicable Lending Offices Schedule II Subsidiary Guarantors


Schedule 3.01(d) Surviving Debt Schedule 3.01(l) Restructuring Memorandum Schedule 4.01(a) Investor Group Schedule 4.01(b) Subsidiaries Schedule 4.01(d) Government and Third Party Approvals Schedule 4.01(p) Existing Debt Schedule 5.02(a) Existing Liens Schedule 5.02(e) Existing Investments


EXHIBITS


Exhibit A-1 - Form of Term A Note Exhibit A-2 - Form of Term B Note Exhibit A-3 - Form of Revolving Credit Note Exhibit B - Form of Notice of Borrowing Exhibit C - Form of Assignment and Acceptance Exhibit D - Form of Pledge Agreement Exhibit E - Form of Subsidiaries Guaranty Exhibit F - Form of Opinion of Borrowers' Counsel Exhibit G - Form of Opinion of Borrowers' Canadian Counsel Exhibit H - Form of Solvency Opinion Exhibit I - Form of Solvency Certificate


CREDIT AGREEMENT


CREDIT AGREEMENT dated as of January 21, 1998 among ACCURIDE CORPORATION, a Delaware corporation (the "U.S. BORROWER"), and 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 banks, financial institutions and other institutional lenders listed on the signature pages hereof as the Initial Lenders (the "INITIAL LENDERS"), CITIBANK, N.A., a national banking association ("CITIBANK"), as the initial issuing bank (the "INITIAL ISSUING BANK"), CITICORP USA, INC., a Delaware corporation ("CITICORP"), as the swing line bank (the "SWING LINE BANK") and as administrative agent (together with any successor appointed pursuant to Article VIII, the "ADMINISTRATIVE AGENT") for the Lender Parties (as hereinafter defined), Citicorp Securities, Inc. ("CSI"), as arranger (the "ARRANGER") for the Facilities (as hereinafter defined), BANKERS TRUST COMPANY ("BANKERS TRUST "), as syndication agent ("SYNDICATION AGENT") for the Lender Parties and WELLS FARGO BANK N.A. ("WELLS FARGO"), as documentation agent ("DOCUMENTATION AGENT") for the Lender Parties.


PRELIMINARY STATEMENTS:


(1) Pursuant to the Stock Subscription and Redemption Agreement dated November 17, 1997 (as amended, supplemented or otherwise modified in accordance with its terms, to the extent permitted in accordance with the Loan Documents (as hereinafter defined) the "STOCK PURCHASE AGREEMENT"), Hubcap Acquisition, L.L.C. ("HUBCAP"), an affiliate of Kohlberg Kravis Roberts & Co., L.P. ("KKR" and, together with Hubcap, the "INVESTOR GROUP") will acquire approximately 90% of the U.S. Borrower (the "ACQUISITION") from Phelps Dodge Corporation ("PHELPS DODGE"), for cash consideration of approximately $108,000,000. Following the Acquisition, Phelps Dodge will continue to own approximately 10% of the U.S. Borrower.


(2) The Borrowers have requested that, immediately upon the consummation of the Acquisition, the Lender Parties lend up to $215,000,000 to the U.S. Borrower and up to $60,000,000 to the Canadian Borrower to enable Hubcap to consummate the Acquisition and to pay transaction fees and expenses in connection therewith, and that from time to time, the Lender Parties lend to the U.S. Borrower and issue Letters of Credit for the benefit of the U.S. Borrower to finance the foregoing, to provide working capital for the U.S. Borrower and its Subsidiaries and for other general corporate purposes.


(3) The Lender Parties have indicated their willingness to agree to lend such amounts on the terms and conditions of this Agreement.


NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the parties hereto hereby agree as follows:


2


ARTICLE I


DEFINITIONS AND ACCOUNTING TERMS


SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):


"ACQUISITION" has the meaning specified in the Preliminary Statements
to this Agreement.


"ADMINISTRATIVE AGENT" has the meaning specified in the recital of
parties to this Agreement.


"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent with Citibank
at its office at 399 Park Avenue, New York, New York 10043, Account No.
3685-2248, Reference: Accuride.


"ADVANCE" means a Term A Advance, a Term B Advance, a Revolving Credit
Advance, a Swing Line Advance or a Letter of Credit Advance.


"AFFILIATE" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person (or, in the case of any Lender which is an investment fund, (i)
the investment advisor thereof, and (ii) any other investment fund having
the same investment advisor), or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power to vote 10% or more
of the Voting Stock of such Person or to direct or cause the direction of
the management and policies of such Person, whether through the ownership
of Voting Stock, by contract or otherwise.


"APPLICABLE LENDING OFFICE" means, with respect to (a) each Term A
Lender, such Lender Party's Canadian Lending Office in the case of a Base
Rate Advance and such Lender Party's Eurodollar Lending Office in the case
of a Eurodollar Rate Advance and (b) for each other Lender Party, such
Lender Party's Domestic Lending Office in the case of a Base Rate Advance
and such Lender Party's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.


"APPLICABLE MARGIN" means, for Advances outstanding under each of the
Term A Facility, the Term B Facility and the Revolving Credit Facility, a
percentage per annum determined by reference to the Performance Level as
set forth for each such Facility below:


(a) for Advances outstanding under the Term A Facility:


3


============================================================================
PERFORMANCE LEVEL BASE RATE ADVANCES EURODOLLAR RATE ADVANCES
============================================================================
I 0.250% 1.250%
============================================================================
II 0.250% 1.250%
============================================================================
III 0.500% 1.500%
============================================================================
IV 0.750% 1.750%
============================================================================
V 1.125% 2.125%
============================================================================
VI 1.375% 2.375%
============================================================================


(b) for Advances outstanding under the Term B Facility:


============================================================================
PERFORMANCE LEVEL BASE RATE ADVANCES EURODOLLAR RATE ADVANCES
============================================================================
I 0.500% 1.500%
============================================================================
II 0.500% 1.500%
============================================================================
III 0.750% 1.750%
============================================================================
IV 1.000% 2.000%
============================================================================
V 1.250% 2.250%
============================================================================
VI 1.500% 2.500%
============================================================================


(c) for Advances outstanding under the Revolving Credit Facility:


============================================================================
PERFORMANCE LEVEL BASE RATE ADVANCES EURODOLLAR RATE ADVANCES
============================================================================
I 0.000% 0.875%
============================================================================
II 0.125% 1.125%
============================================================================
III 0.375% 1.375%
============================================================================
IV 0.625% 1.625%
============================================================================
V 1.000% 2.000%
============================================================================
VI 1.250% 2.250%
============================================================================


4


For outstanding Advances under each of the Facilities, the Applicable
Margin for each Base Rate Advance and each Eurodollar Rate Advance shall,
(i) for the first six months following the Closing Date, be determined by
reference to Performance Level V, and (ii) thereafter, the Applicable
Margin for each Base Rate Advance shall be determined by reference to the
Performance Level in effect from time to time and the Applicable Margin for
each Eurodollar Rate Advance shall be determined by reference to the
Performance Level in effect on the first day of each Interest Period for
such Advance. Changes in the Applicable Margin resulting from changes in
the Performance Level shall become effective (for purposes of this
definition only, the date of such effectiveness being the "EFFECTIVE DATE")
as of the first day following the last day of the most recent Fiscal
Quarter or Fiscal Year for which (A) financial statements are delivered to
the Administrative Agent pursuant to Section 5.03(b) or (c) and (B) a
certificate of the chief financial officer of the U.S. Borrower is
delivered by the U.S. Borrower to the Administrative Agent setting forth,
with respect to such financial statements, the then-applicable Performance
Level and the basis of the calculations therefor, and shall remain in
effect until the next change to be effected pursuant to this definition;
PROVIDED that, (i) if either Borrower shall have made any payments in
respect of interest during the period (for purposes of this definition
only, the "INTERIM PERIOD") from and including the Effective Date to the
day on which any change in Performance Level is determined as provided
above, then the amount of the next such payment of interest due by such
Borrower on or after such day shall be increased or decreased by an amount
equal to any underpayment or overpayment so made by such Borrower during
such Interim Period and (ii) each determination of the Performance Level
pursuant to this definition shall be made with respect to the Measurement
Period ending at the end of the fiscal period covered by the relevant
financial statements.


"APPLICABLE PERCENTAGE" means (a) for the six month period immediately
following the Closing Date, a rate per annum equal to 0.425% and (b)
thereafter, a rate per annum determined by reference to the applicable
Performance Level as set forth below:


============================================================
PERFORMANCE LEVEL COMMITMENT FEE
============================================================
I 0.250%
============================================================
II 0.300%
============================================================
III 0.350%
============================================================
IV 0.375%
============================================================
V 0.375%
============================================================
VI 0.425%
============================================================


The Applicable Percentage determined pursuant to clause (b) above shall be
determined by reference to the Performance Level in effect from time to
time. Changes in the Applicable Percentage resulting from changes in the
Performance Level shall become effective (for purposes of this definition
only, the date of such effectiveness being the "EFFECTIVE DATE") as of


5


the first day following the last day of the most recent Fiscal Quarter or
Fiscal Year for which (A) financial statements are delivered to the
Administrative Agent pursuant to Section 5.03(b) or (c) and (B) a
certificate of the chief financial officer of the U.S. Borrower is
delivered by the U.S. Borrower to the Administrative Agent setting forth,
with respect to such financial statements, the then-applicable Performance
Level and the basis of the calculations therefor, and shall remain in
effect until the next change to be effected pursuant to this definition;
PROVIDED that, (i) if the U.S. Borrower shall have made any payments in
respect of commitment fees during the period (for purposes of this
definition only, the "INTERIM PERIOD") from the Effective Date to the day
on which any change in Performance Level is determined as provided above,
then the amount of the next such payment in respect of commitment fees due
by such Borrower on or after such day shall be increased or decreased by an
amount equal to any underpayment or overpayment so made by such Borrower
during such Interim Period and (ii) each determination of the Performance
Level pursuant to this definition shall be made with respect to the
Measurement Period ending at the end of the fiscal period covered by the
relevant financial statements.


"APPLICABLE RATE" has the meaning specified in Section 2.11(d).


"APPROPRIATE BORROWER" means, (a) with respect to the Term A Facility,
the Canadian Borrower and (b) with respect to the Term B Facility, the
Revolving Credit Facility, the Swing Line Facility or the Letter of Credit
Facility, the U.S. Borrower.


"APPROPRIATE LENDER" means, at any time, with respect to (a) any of
Term A Facility, the Term B Facility or the Revolving Credit Facility, a
Lender that has a Commitment with respect to such Facility at such time,
(b) the Letter of Credit Facility, (i) the Issuing Bank and (ii) the other
Revolving Credit Lenders and (c) the Swing Line Facility, (i) the Swing
Line Bank and (ii) if the other Revolving Credit Lenders have made Swing
Line Advances pursuant to Section 2.02(b) that are outstanding at such
time, each such other Revolving Credit Lender.


"ARRANGER" has the meaning specified in the recital of parties to this
Agreement.


"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent and the Appropriate Borrower, in accordance with
Section 9.07 and in substantially the form of Exhibit C hereto.


"AVAILABLE AMOUNT" means, as of any date of determination, an amount
equal to (a) the sum of (i) the amount of any capital contributions (other
than the capital contributions referred to in Section 3.01(b)) made in cash
to the U.S. Borrower during the period from the Business Day immediately
following the Closing Date to such date, (ii) the aggregate amount of Net
Cash Proceeds which are required to be used to prepay Advances pursuant to
Section 2.06(b)(ii) but are not so used, and are retained by the U.S.
Borrower, pursuant to Section 2.06(c) on or prior to such date, (iii) an
amount equal to (x) the cumulative amount of Excess Cash Flow for all
Fiscal Years completed prior to such date MINUS (y) the portion of such
Excess Cash Flow that has been on or prior to such date (or will be)
applied to the prepayment


6


of Advances in accordance with Section 2.06(b)(i), (iv) the aggregate
amount of all cash dividends and other cash distributions received by the
U.S. Borrower or any Subsidiary Guarantor on or prior to such date from any
Persons which are not Restricted Subsidiaries (other than the portion of
any such dividends and other distributions that is used by the U.S.
Borrower or any Subsidiary Guarantor to pay taxes), (v) the aggregate
amount of all cash repayments of principal received by the U.S. Borrower or
any Subsidiary Guarantor on or prior to such date from any Persons which
are not Restricted Subsidiaries in respect of loans made by the U.S.
Borrower or such Subsidiary Guarantor to such Persons and (vi) the
aggregate amount of all net cash proceeds received by the U.S. Borrower or
any Subsidiary Guarantor on or prior to such date in connection with the
sale, transfer or other disposition of its ownership interest in any Person
which is not a Restricted Subsidiary LESS (b) any amounts in subclauses (i)
through (vi) of clause (a) above used (i) for Investments pursuant to
Section 5.02(e)(ix) or (xii), (ii) for prepayments of Debt pursuant to
5.02(g) or (iii) for Capital Expenditures pursuant to Section 5.02(j)(i).


"AVAILABLE LC AMOUNT" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).


"BANK HEDGE AGREEMENT" means any interest rate Hedge Agreement
permitted under Article V that is entered into by and between the U.S.
Borrower and any Hedge Bank.


"BANKERS TRUST" has the meaning specified in the recital of parties to
this Agreement.


"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
highest of:


(a) (i) with respect to Term B Advances and Revolving
Credit Advances, the rate of interest announced publicly by Citibank
in New York, New York, from time to time, as Citibank's base rate and
(ii) with respect to Term A Advances, the variable rate of interest
per annum ...