CONSENT AND AMENDMENT NO. 2 TO
LOAN AND SECURITY AGREEMENT
This
Consent and Amendment No. 2 to Loan and Security Agreement
(this “ Amendment ”) is made as of
August 4, 2009, by and among COMMERCIAL VEHICLE GROUP, INC., a
Delaware corporation (the “ Company ”), each
other Borrower, as defined in the Loan Agreement referred to below
(together with the Company, collectively, “ Borrowers
”), the financial institutions party to the Loan Agreement as
lenders (collectively, “ Lenders ”), and BANK OF
AMERICA, N.A., as agent for Lenders (“ Agent
”).
A.
Borrowers, Agent and Lenders are parties to that certain Loan and
Security Agreement, dated as of January 7, 2009 (as amended
and as the same may be further amended, restated, supplemented or
otherwise modified from time to time, the “ Loan
Agreement ”).
B.
Borrowers have requested, among other things, that the Agent and
the Lenders consent to the incurrence of the Second Lien Term Loans
by the Company and the issuance by the Company of the Third Lien
Notes (each as defined herein).
C.
Borrowers, Agent and Lenders desire to amend the Loan Agreement as
more fully set forth herein.
D.
Each capitalized term used herein and not otherwise defined herein
shall have the same meaning set forth in the Loan
Agreement.
In
consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrowers, Agent and Lenders
agree as follows:
1.
Amendment to Schedule 1.1 . Schedule 1.1 to
the Loan Agreement is hereby amended and restated in its entirety
as set forth at Exhibit A hereto.
2. New
Definitions . The following definitions shall be added to
Section 1.1 of the Loan Agreement in the appropriate
alphabetical order:
“
Amendment No. 2 : means Amendment No. 2 to Loan
Agreement, dated as of August 4, 2009, by and among the Borrower,
the Lenders and the Agent.”
“
Amendment No. 2 Effective Date : has the meaning given
to such term in Amendment No. 2.”
“
Availability Block : means $10,000,000 provided ,
however, that if Borrowers deliver a Compliance Certificate
pursuant to Section 10.1.2(c) for any Fiscal Quarter ending
March 31, 2010 or thereafter demonstrating that
Borrowers’ Fixed Charge Coverage Ratio is at least 1.1 to 1.0
as of the last day of the period consisting of the most recent four
Fiscal Quarters (notwithstanding anything contained in the
definition of “Fixed Charge Coverage Ratio” to
the
contrary), the
Availability Block shall be $7,500,000 at all times when the Fixed
Charge Coverage Ratio is at least 1.1 to 1.”
“
Excluded Receivables Subsidiary : any Subsidiary created and
operated for the sole purpose of collecting and selling accounts
receivable and assets related thereto pursuant to any Qualified
Receivables Purchase Agreement; provided that such
Subsidiary may engage in necessary corporate governance, accounting
and other similar incidental transactions required in connection
with maintaining its existence.”
“
Existing Senior Notes Indenture Formula Amount : the amount
of Revolver Loans that may be incurred by the Company and its
Subsidiaries pursuant to Section 4.03(b)(1) of the Indenture
as in effect on the date hereof; provided , however ,
that if the aggregate amount of Obligations that may be secured by
Liens permitted under clause (7) of the definition of
“Permitted Liens” contained in the Indenture as in
effect on the date hereof is less than such amount, the Indenture
Formula Amount shall be limited to the aggregate amount of
Obligations that can be secured by such Permitted
Liens.”
“
Financial Covenant Trigger Date : the earliest date upon
which Domestic Availability has been (a) less than $5,000,000
for three consecutive Business Days or (b) less than $2,500,000 for
any day on or after the Amendment No. 2 Effective
Date.”
“
Financial Covenant Trigger Period : the period from and
including the Financial Covenant Trigger Date until the Business
Day after Domestic Availability has been $5,000,000 or greater for
sixty (60) consecutive days.”
“
Qualified Receivables Transaction : any transaction or
series of transactions designated in writing by the Agent to be a
“Qualified Receivables Transaction” and which is
entered into by the Borrowers or their Subsidiaries, as applicable,
pursuant to which the Borrowers or their Subsidiaries, as
applicable, may sell, convey or otherwise transfer to (i) any
Excluded Receivables Subsidiary or (ii) any other Person (in
the case of a transfer by an Excluded Receivables Subsidiary), or
may grant a security interest in, any accounts receivable (whether
now existing or arising in the future) of the Company, and any
assets related thereto, including all collateral securing such
accounts receivable, all contracts and all guarantees or other
obligations in respect of such accounts receivable, and proceeds of
such accounts receivable and other assets that are customarily
transferred, or in respect of which security interests are
customarily granted, in connection with asset securitization
transactions involving accounts receivable; provided that
such transaction shall not involve any recourse to any Borrower or
any Subsidiary (other than recourse only to the Excluded
Receivables Subsidiary or, solely with respect to Standard
Securitization Undertakings, any other Subsidiary) for any reason
other than repurchases of non-eligible accounts
receivable.”
“ Second
Lien Lenders : the financial institutions party identified as
“Lenders” under and as defined in the Second Lien Term
Loan Agreement.
“ Second
Lien Term Loan Agreement : the Loan and Security Agreement,
dated as of August 4, 2009, by and among the Company, the
other parties thereto, and Credit Suisse, as agent.
“ Second
Lien Term Loan Collateral Agent : Credit Suisse, in its
capacity as the collateral agent for the Second Lien Lenders and
any other agent in such similar capacity pursuant to any
Refinancing Debt..
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“ Second
Lien Term Loan Documents : the Second Lien Term Loan Agreement
and each other document defined as a “Loan Document” in
the Second Lien Term Loan Agreement.
“ Second
Lien Term Loans : any “Term Loan” as defined in the
Second Lien Term Loan Agreement.
“
Standard Securitization Undertakings : those
representations, warranties, covenants and indemnities entered into
by the Company or any Excluded Receivables Subsidiary which are
determined in good faith by the Company to be customary in
securitization transactions involving accounts
receivables.”
“ Third
Lien Indenture : the Indenture, dated as of August 4,
2009, by and among the Company, the other parties thereto and U.S.
Bank National Association.
“ Third
Lien Indenture Formula Amount : the amount of Revolver Loans
that may be incurred by the Company and its Subsidiaries pursuant
to Section 4.03(b)(1) of the Third Lien Indenture as in effect
on the date hereof.
“ Third
Lien Note Collateral Agent : U.S. Bank, National Association,
in its capacity as trustee and collateral agent for the Third Lien
Noteholders, and any other agent in such similar capacity pursuant
to any Refinancing Debt.
“ Third
Lien Note Documents : the Third Lien Indenture and each other
document defined as a “Note Document” in the Third Lien
Indenture.
“ Third
Lien Noteholders : any Person that is a “Holder” or
“Securityholder”, pursuant to and as defined in the
Third Lien Indenture.
“ Third
Lien Notes : the 11%/13% Third Lien Senior Secured Notes due
2013, issued by the Company under the Third Lien Indenture, in the
aggregate amount of $44,190,000 (plus all interest paid in
kind).
3.
Amended and Restated Definitions . Section 1.1 of the
Loan Agreement is hereby amended to amend and restate the
definitions of “Change of Control”,
“Distribution”, “Domestic Availability
Reserve”, “EBITDA”, “Eligible Domestic
Account”, “Fixed Charge Coverage Ratio”,
“Indenture Formula Amount”, “Permitted Asset
Disposition”, “Permitted Foreign Investment”,
“Refinancing Conditions”, “Refinancing
Debt”, “Restricted Investment” and
“Subordinated Debt” in their entirety as
follows:
“ Change
of Control : the occurrence of any of the following events:
(a) any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the
“beneficial owner” (as defined in the Rules 13d-3
and 13d-5 under the Exchange Act, except for purposes of this
clause (a) such person shall be deemed to have
“beneficial ownership” of all shares that any such
person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total voting power of the
Voting Stock of the Company; (b) individuals who on the
Closing Date constituted the Board of Directors (together with any
new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was
approved by a vote of a majority of the directors of the Company
then still in office who were either directors on the Closing Date
or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Board of Directors then in office; (c) the merger or
consolidation of
3
the Company
with or into another Person or the merger of another Person with or
into the Company, or the sale of all or substantially all the
assets of the Company (determined on a consolidated basis) to
another Person other than a transaction following which (i) in
the case of a merger or consolidation transaction, holders of
securities that represented 100% of the Voting Stock of the Company
immediately prior to such transaction (or other securities into
which such securities are converted as part of such merger or
consolidation transaction) own directly or indirectly at least a
majority of the voting power of the Voting Stock of the surviving
Person in such merger or consolidation transaction immediately
after such transaction and substantially the same proportion as
before the transaction and (ii) in the case of a sale of
assets transaction, each transferee becomes an obligor in respect
of the Obligations and a Subsidiary of the transferor of such
assets; or (d) a “change of control” under the
Existing Senior Notes, Second Lien Term Loan Agreement, Third Lien
Indenture or any similar definition or concept in any Refinancing
Debt of any of the foregoing.”
“
Distribution : any declaration or payment of a distribution,
interest or dividend on any Equity Interest (other than
payment-in-kind); or any purchase, redemption, or other acquisition
or retirement for value of any Equity Interest; provided, that in
no event shall the (i) cashless exercise of warrants or
options, (ii) retirement of fractional shares,
(iii) repurchases of Equity Interests deemed to occur in
connection with the surrender of shares of Equity Interests to
satisfy tax withholding obligations; provided however, that
(a) the aggregate amount of such repurchases shall not exceed
$500,000 for the Fiscal Year ending December 31, 2009, $500,00
for the Fiscal Year ending December 31, 2010 or $1,000,000 in
any Fiscal Year thereafter, and (b) no Event of Default shall
have occurred or shall occur as a result therefrom, or
(iv) the cashless exercise of warrants, constitute a
“Distribution”.”
“
Domestic Availability Reserve : the sum (without
duplication) of (a) the Inventory Reserve; (b) the Rent
and Charges Reserve; (c) the Domestic LC Reserve; (d) the
Bank Product Reserve; (e) the aggregate amount of liabilities
secured by Liens upon Collateral that are senior to Agent’s
Liens (but imposition of any such reserve shall not waive an Event
of Default arising therefrom); (f) the Availability Block, and
(g) such additional reserves, in such amounts and with respect
to such matters, as Agent in its Permitted Discretion may elect to
impose from time to time.”
“
EBITDA : determined on a consolidated basis for Borrowers
and Subsidiaries, the sum of (i) net income, calculated before
(a) interest expense, (b) provision for income taxes,
(c) depreciation and amortization expense, (d) gains or
losses arising from the sale of capital assets, (e) gains
arising from the write-up of assets, (f) any extraordinary
gains, (g) non-cash charges and expenses (other than those
which represent a reserve for or actual cash item in such period or
any future period), (h) one-time non-recurring costs and
expenses associated with the issuance of Equity Interests, to the
extent such costs and expenses are financed with the proceeds of
such issuance, (i) costs and expenses in connection with the
termination of the Obligors’ existing credit facility and the
execution of the Loan Documents, (j) severance costs and
expenses to the extent paid in cash in an amount not to exceed (1)
$500,000 in the aggregate for the six Fiscal Months, taken as a
whole, prior to and including December 31, 2009 and (2)
$1,000,000 in the aggregate in any Fiscal Year thereafter,
(k) any non-cash losses resulting from mark to market
accounting of Hedging Agreements, and (l) one-time
non-recurring costs and expenses in connection with the refinancing
of certain of the Existing Senior Notes (whether or not
consummated) in an amount not to exceed $2,500,000 minus
(ii) non-cash gains (including those resulting from mark to
market accounting of Hedging Agreements) minus
(iii) cash payments made in such period to the extent such
payments relate to a non-cash loss, charge or expense in any prior
period which was added back in determining
EBITDA.”
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“
Eligible Domestic Account : an Account owing to a Domestic
Borrower that arises in the Ordinary Course of Business from the
sale of goods , is payable in Dollars and is deemed
by Agent, in its Permitted Discretion, to be an Eligible Domestic
Account. Without limiting the foregoing, no Account shall be an
Eligible Domestic Account if (a) it is unpaid for more than
60 days after the original due date, or more than 90 days
after the original invoice date, (or, in the case of Accounts owing
to a Domestic Borrower by Volvo or Mack Truck not otherwise
excluded, unpaid for more than 90 days after the original due
date or more than 120 days after the original invoice date, up
to an aggregate amount of $5,000,000 at any time, for the portion
of such Accounts which are unpaid for more than 90 days after
the original invoice date, to the extent the portion of such
Accounts does not remain unpaid for more than 120 days after
the original invoice date); (b) 25% or more of the Accounts
owing by the Account Debtor are not Eligible Domestic Accounts
under the foregoing clause; (c) when aggregated with other
Accounts owing by the Account Debtor, it exceeds 20% of the
aggregate Eligible Domestic Accounts (or such higher percentage as
Agent may establish for the Account Debtor from time to time);
(d) it does not conform with a covenant or representation
herein; (e) it is owing by a creditor or supplier, or is
otherwise subject to offset, counterclaim, dispute, deduction,
discount, recoupment, reserve, defense, chargeback, credit or
allowance (but ineligibility shall be limited to the amount
thereof); (f) an Insolvency Proceeding has been commenced by
or against the Account Debtor ( provided, that so long as an
order exists permitting payment of trade creditors specifically
with respect to such Account Debtor and such Account Debtor has
obtained adequate post-petition financing to pay such Accounts, the
Accounts of such Account Debtor shall not be deemed ineligible
under the provisions of this clause to the extent the order
permitting such financing allows the payment of the applicable
Account; or the Account Debtor has suspended or ceased doing
business, is liquidating, dissolving or winding up its affairs, or
is not Solvent; or Domestic Borrower is not able to bring suit or
enforce remedies against the Account Debtor through judicial
process; (g) the Account Debtor is organized or has its
principal offices or assets outside the United States or Canada (
provided that, notwithstanding anything in this clause
(g) to the contrary, Eligible Domestic Accounts may include
Accounts not otherwise excluded in an aggregate not to exceed at
any time $2,000,000 owing to a Domestic Borrower by
Kenworth/Paccar, Volvo, Caterpillar or such other Account Debtor as
approved by Agent in writing); (h) it is owing by a Government
Authority, unless the Account Debtor is the United States or any
department, agency or instrumentality thereof and the Account has
been assigned to Agent in compliance with the Assignment of Claims
Act; (i) it is not subject to a duly perfected, first priority
Lien in favor of Agent, or is subject to any other Lien other than
the Liens described in clauses (c), (d), (f), (g), and (l) of
Section 10.2.2 ; (j) the goods giving rise to it
have not been delivered to and accepted by the Account Debtor, the
services giving rise to it have not been accepted by the Account
Debtor, or it otherwise does not represent a final sale;
(k) it is evidenced by Chattel Paper or an Instrument,
promissory note or bill of exchange of any kind, or has been
reduced to judgment; (l) its payment has been extended, the
Account Debtor has made a partial payment, or it arises from a sale
on a cash-on-delivery basis; (m) it arises from a sale to an
Affiliate, from a sale on a bill-and-hold, guaranteed sale,
sale-or-return, sale-on-approval, consignment, or other repurchase
or return basis, or from a sale to a Person for personal, family or
household purposes; (n) it represents a progress billing or
retainage; (o) it includes a billing for interest, fees or
late charges, but ineligibility shall be limited to the extent
thereof; or (p) is an account receivable owned by an Excluded
Receivables Subsidiary or which the Company or its Subsidiaries has
agreed to transfer to an Excluded Receivables Subsidiary. In
calculating delinquent portions of Accounts under clauses
(a) and (b), credit balances more than 90 days old will
be excluded.”
“ Fixed
Charge Coverage Ratio : the ratio, determined on a consolidated
basis for Borrowers and their Subsidiaries as of the last day of
the period consisting of the most recent four
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Fiscal Quarters
(or, in the case of (i) the Fiscal Quarter ending
March 31, 2010, as of the last day of the period consisting of
such Fiscal Quarter, (ii) the Fiscal Quarter ending
June 30, 2010, as of the last day of the period consisting of
the most recent two Fiscal Quarters, and (iii) the Fiscal
Quarter ending September 30, 2010, as of the last day of the
period consisting of the most recent three Fiscal Quarters), of
(a) EBITDA minus Capital Expenditures and net cash
taxes paid (not less than $0) for such period, to (b) Fixed Charges
for such period; provided that for the purposes of
calculating the Fixed Charge Coverage Ratio for the Fiscal Quarter
ending on March 31, 2010, in the event that six months of cash
interest payments in respect of the Existing Senior Notes would
otherwise be calculated in the interest expense component of Fixed
Charges for such period, only three month interest expense shall be
included in the calculation of Fixed Charges for such period, and
that for the purposes of calculating the Fixed Charge Coverage
Ratio for the Fiscal Quarter ending September 30, 2010, in the
event that 12 months of cash interest payments in respect of
the Existing Senior Notes would otherwise be calculated in the
interest expense component of Fixed Charges for such period, only
nine months interest expense shall be included in the calculation
of Fixed Charges for such period.”
“
Indenture Formula Amount : the collective reference to both
the Existing Notes Indenture Formula Amount and the Third Lien
Indenture Formula Amount.”
“
Permitted Asset Disposition : (a) a sale of Inventory
in the Ordinary Course of Business; (b) a disposition of
Property that, in the aggregate during any 12 consecutive Fiscal
Month period, has a fair market or book value (whichever is more)
of $5,000,000 or less; (c) a disposition of Inventory that is
obsolete, unmerchantable or otherwise unsaleable in the Ordinary
Course of Business and sales, discounts and write-offs of Accounts
in the Ordinary Course of Business; (d) termination of a
lease, sublease, license, sublicense, use agreement or similar
agreement of real or personal Property which could not reasonably
be expected to have a Material Adverse Effect; (e) the leasing
(including subleasing) or licensing (including sublicensing) of
Intellectual Property, personal Property or real Property in the
Ordinary Course of Business or the abandonment of Intellectual
Property in the Ordinary Course of Business; (f) dispositions
of obsolete, uneconomical, negligible, worn-out or surplus
property; (g) sales of Cash Equivalents and marketable
securities; (h) sales, transfers, leases, exchanges and
dispositions (1) among the Domestic Obligors, (2) among
the UK Borrowers, (3) from the UK Obligors or non-Obligors to
the Domestic Obligors or UK Obligors, (4) among non-Obligors,
or (5) to the extent constituting a Permitted Foreign
Investment, from Domestic Obligors or Domestic Subsidiaries to UK
Obligors or non-Obligor Subsidiaries; (i) granting of
Permitted Liens; (j) mergers, consolidations, amalgamations,
liquidations and dissolutions to the extent permitted by
Section 10.2.10 ; (k) termination of any Hedging
Agreement; (l) any disposition of Real Estate to a
Governmental Authority as a result of casualty or a condemnation of
such Real Estate; (m) issuances of Equity Interests to
qualifying directors of Foreign Subsidiaries; (n) the
capitalization or forgiveness of Debt owed to it by other Obligors
or Subsidiaries if such capitalization or forgiveness is required
in order to comply with so-called “thin capitalization”
rules; (o) the canc
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