Exhibit 10(s)
WAIVER AND FIFTH AMENDMENT
TO AMENDED AND RESTATED
SENIOR SUBORDINATED LOAN AGREEMENT
This
WAIVER AND FIFTH AMENDMENT TO AMENDED AND RESTATED SENIOR
SUBORDINATED LOAN AGREEMENT (“ Fifth Amendment
”) is made and entered into as of March 25, 2005 between
CLARION TECHNOLOGIES, INC., a Delaware corporation (the “
Company ”), its subsidiaries party hereto (the Company
and its subsidiaries are referred to individually as a “
Loan Party ” and collectively as the “ Loan
Parties ”), jointly and severally, as borrowers and
WILLIAM BLAIR MEZZANINE CAPITAL FUND III, L.P., a Delaware limited
partnership (“ WBMCF ”), the Emilie D. Wierda
Living Trust dated 3/1/94, William Beckman, Thomas Wallace, the
Craig Wierda Grantor Retained Annuity Trust, dated January 31,
1994, and the Emilie Wierda Grantor Retained Annuity Trust, dated
January 31, 1994, (together with WBMCF, each a “
Lender ” and collectively, as the “
Lenders ”).
R E C I T A L S
A.
Pursuant to that certain Amended and Restated Senior Subordinated
Loan Agreement dated as of December 27, 2002, as amended by Waiver,
Consent and First Amendment to Amended and Restated Senior
Subordinated Loan Agreement dated April 14, 2003, Second Amendment
to Amended and Restated Senior Subordinated Loan Agreement dated as
of April 23, 2004, Consent and Third Amendment to Amended and
Restated Senior Subordinated Loan Agreement dated as of August 2,
2004, and Fourth Amendment to Amended and Restated Senior
Subordinated Loan Agreement dated as of November 8, 2004 (and as
further amended, restated or otherwise modified, the “
Loan Agreement ”) between the Loan Parties and the
Lenders, the Lenders and Loan Parties agreed to amend and restate
the terms of an existing senior subordinated loan
agreement.
B.
Defaults have occurred with respect to certain of the financial
covenants in the Loan Agreement, which defaults the Loan Parties
have requested the Lenders to waive, and the Lenders are willing to
grant such waiver as provided in this Fifth Amendment. The Loan
Parties have further requested, and the Lenders have further
agreed, to amend selected provisions of the Loan Agreement upon the
terms and conditions hereinafter set forth.
C.
The Loan Parties, JPMorgan Chase Bank, N.A. (as successor to Bank
One, NA), as Agent and the Senior Lenders are entering into an
eighth amendment to amended and restated credit agreement dated as
of the date hereof (the “ Senior Eighth Amendment
”), pursuant to which Senior Lenders, among other things, are
agreeing to waive certain covenant defaults under and to amend the
terms of the Senior Loan Agreement.
D.
Based upon the foregoing recitals, and without waiving any rights
or remedies other than those expressly waived herein, Lenders are
willing to amend the terms of the Loan Agreement under the terms
and conditions expressly set forth herein.
A G R E E M E N T S
NOW,
THEREFORE, in consideration of the agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as
follows:
1.
Incorporation of Recitals . The foregoing recitals are
incorporated herein by reference and made a part of this Fifth
Amendment.
2.
Definitions . All capitalized terms used herein without
definition shall have the meanings given to them in the Loan
Agreement, as amended by this Fifth Amendment.
3.
Defaults . The Loan Parties hereby acknowledge, confirm and
agree that certain events have occurred, as specifically described
on Schedule I hereto (said events collectively, the “
Existing Defaults ”), each of which constitutes an
Event of Default or Potential Event of Default and entitles, or
would entitle, the Lenders to exercise certain rights and remedies
under the Loan Agreement.
4.
Waiver . In reliance upon the representations, warranties
and covenants of the Loan Parties contained in this Fifth
Amendment, and subject to the terms and conditions of this Fifth
Amendment and any documents or instruments executed in connection
herewith, the Lenders agree to, and do hereby, waive all of the
Existing Defaults. The Loan Parties understand and agree that the
waiver contained in this Section 4 relates only to the Existing
Defaults, all of which occurred prior to the date of this Fifth
Amendment, and that said waiver shall not be construed as a waiver
of, or agreement to waive, any Events of Default or Potential
Events of Default other than the Existing Defaults. Except as
limited and/or modified by this Fifth Amendment and by the
documents executed and delivered in connection herewith, the Loan
Documents shall continue in full force and effect until such time
as the Obligations have been paid in full.
5.
Amendment of the Loan Agreement . Subject to the Loan
Parties’ performance of their obligations to Lenders
hereunder on the date hereof, the parties hereto agree to amend the
terms of the Loan Agreement as follows:
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(a)
The following definition is hereby added to Section 1.1 of the
Loan Agreement:
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“‘
Fifth Amendment ’ shall mean that certain Fifth
Amendment to Amended and Restated Senior Subordinated Loan
Documents dated as of March 26, 2005, between the Loan Parties and
the Lenders as the same may be amended, supplemented, restated or
otherwise modified from time to time.”
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“‘
Fifth Amendment Closing Date ’ shall mean the date on
which the Fifth Amendment shall have been executed and delivered by
all parties thereto, and the conditions in Section 7 thereof shall
have been satisfied.”
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WAIVER AND FIFTH AMENDMENT
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(b)
Section 6.17 of the Loan Agreement is hereby amended by deleting
clauses (a), (b), (c), (d), (e) and (f) thereof, and replacing them
with the following new clauses (a), (b), (c), (d), (e) and (f),
respectively:
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“(a)
Fixed Charge Coverage Ratio . The Loan Parties shall not
permit the Fixed Charge Coverage Ratio to be less than: (i) 0.45 to
1.00 for the fiscal month ending on or about March 31, 2005; or
(ii) 1.31 to 1.00 as of any fiscal month-end thereafter, as
determined in each case in accordance with GAAP for the twelve
consecutive month period then ending.”
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“(b)
Minimum EBITDA . The Loan Parties shall not permit EBITDA to
be less than: (i) negative $1,375,000 for the
Company’s fiscal quarter ending on or about March 31, 2005;
or (ii) $1,980,000 for any fiscal quarter thereafter, such amount
to be determined in each case in accordance with GAAP for the
period of such fiscal quarter then ending.”
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“(c)
Senior Debt to EBITDA Ratio . The Loan Parties shall not
permit the Senior Debt to EBITDA Ratio to be greater than: (i) 5.61
to 1.00 as of the end of the Company’s fiscal quarter ending
on or about March 31, 2005; or (ii) 2.365 to 1.00 as of the end of
each fiscal quarter thereafter; such ratio to be determined in each
case in accordance with GAAP using the ratio of Senior Debt as of
the end of each such fiscal quarter to EBITDA for the period of
four consecutive fiscal quarters of the Company then
ending.”
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“(d)
Total Debt to EBITDA Ratio . The Loan Parties shall not
permit the Total Debt to EBITDA Ratio to be greater than: (i)
10.175 to 1.00 as of the end of the Company’s fiscal quarter
ending on or about March 31, 2005; or (ii) 4.675 to 1.00 as of the
end of any fiscal quarter thereafter; such ratio to be determined
in each case in accordance with GAAP using the ratio of Total Debt
as of the end of each such fiscal quarter to EBITDA for the period
of four consecutive fiscal quarters of the Company then
ending.”
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“(e)
Total Liabilities to Tangible Capital Funds Ratio . The Loan
Parties shall not permit the Total Liabilities to Tangible Capital
Funds Ratio to be greater than: (i) 13.20 to 1.00 as of the end of
March 2005; or (ii) 5.23 to 1.00 as of the end of any month
thereafter; such ratio to be determined in each case in accordance
with GAAP as of such month-end.”
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“(f)
Adjusted Working Capital . The Loan Parties shall not permit
Adjusted Working Capital to be less than: (i)
negative $12,650,000 as of the end of March 2005; or
(ii) negative $9,900,000 as of the end of each month
thereafter; such amount to be determined in each case in accordance
with GAAP as of such month end. Notwithstanding the foregoing, the
minimum Adjusted Working Capital requirement hereunder shall
increase by $1,000,000 over the prior year’s December 31
number, as of and at the end of each fiscal year commencing with
fiscal year-end 2005; e.g., the minimum Adjusted Working Capital
requirement as of December 31, 2005 shall be negative
$8,900,000.”
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WAIVER AND FIFTH AMENDMENT
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6.
Agreement Regarding Financial Covenants . The Lenders and
the Loan Parties hereby agree and acknowledge that, notwithstanding
the provisions of Section 6.17(a), (b), (c), (d), (e) and (f) of
the Loan Agreement (as each is amended by this Fifth Amendment),
the Lenders and the Loan Parties intend to negotiate a revised set
of mutually-acceptable financial covenants to be applicable during
all periods after March 31, 2005.
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7.
Fifth Amendment Conditions . The Fifth Amendment and the
obligations of Lenders contemplated hereby shall be governed by and
subject to the following terms and conditions:
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(a) receipt
of this Waiver and Fifth Amendment to Amended and Restated Senior
Subordinated Loan Documents, duly executed by the Loan Parties and
Lenders;
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(b) receipt
of copies of all documents evidencing corporate action taken by
each Loan Party with respect to the consummation of the
transactions contemplated by this Fifth Amendment, including but
not limited to, and as requested by the Lenders, resolutions of the
Board of Directors of each Loan Party authorizing the execution,
delivery and performance by such Loan Party of this Fifth
Amendment;
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(c) receipt
of a certificate of each Loan Party, signed by its chief executive
officer or president, to the effect that: (i) all of the
representations and warranties of such party contained in this
Fifth Amendment are true and correct as of the date hereof; (ii)
such par
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