EXHIBIT 10.8
AMENDMENT NO. 5 TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
AND WAIVER
This Amendment No. 5 to Revolving Credit and Term Loan Agreement and
Waiver ("Fifth Amendment") dated as of February __, 2004 by and among the
lenders signatory hereto (collectively, the "Banks"), Comerica Bank as agent for
the Banks (in such capacity, "Agent"), Trim Systems Operating Corp., a Delaware
corporation ("Holdings"), Tempress, Inc., a Washington corporation ("Tempress")
and Trim Systems LLC, a Delaware limited liability company ("Trim" and together
with Holdings and Tempress, the "Borrowers").
RECITALS
A. Borrowers, Agent and the Banks, entered into that certain Revolving
Credit and Term Loan Agreement dated as of October 29, 1998, as amended as of
December 31, 1998, November 22, 1999, June 28, 2001 and August __, 2002 (as
amended or otherwise modified from time to time, the "Credit Agreement").
B. The Borrowers have asked Banks to waive the Event of Default
described in Section 7 hereof and amend the Agreement as set forth below.
NOW, THEREFORE, the parties agree as follows:
1. The following definitions in Section 1 of the Credit Agreement are
hereby amended and restated in their entirety as follows:
"'Borrowing Base' shall mean, as of any date of determination, an
amount equal to the sum of (x) eighty percent (80%) of Eligible
Accounts, (y) the lesser of (1) fifty percent (50%) of Eligible
Inventory and (2) sixty percent (60%) of Eligible Accounts and (z)
the Overformula Amount. 'Overformula Amount' shall mean, as of any
date of determination, an amount equal to $4,000,000."
"'Excess Cash Flow' shall mean, as of the end of any fiscal year of
Holdings, Consolidated Net Income for such fiscal year, plus, to the
extent deducted in determining Consolidated Net Income,
depreciation, amortization and non-cash interest expense for such
fiscal year, minus the sum of (i) reductions in the purchase
accounting reserve from cash payments during such fiscal year, (ii)
Capital Expenditures made by Holdings and its Consolidated
Subsidiaries during such fiscal year and any Rollover Amount for
such period to be carried forward to the next period less the
Rollover Amount, if any, for the preceding period carried forward to
the current period that was not spent during such current period,
(iii) the amount of all payments of principal made on Senior Debt
during such fiscal
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year (excluding any payments on Revolving Credit Advances and
payments by Holdings and its Consolidated Subsidiaries under
any other revolving credit facility to the extent the
Revolving Credit Aggregate Commitment or availability under
such other facility, as the case may be, is not permanently
reduced in connection therewith and excluding the principal
payment to be made in accordance with Section 4.B.2(d)
hereof), (iv) any non-cash credits included in determining
Consolidated Net Income for such period, (v) non-cash gains
from sales of assets included in Consolidated Net Income for
such period, (vi) non-cash charges added back in a previous
period to the extent any such charge has become a cash item
in the current period, (vii) any cash disbursement to Sellers
required pursuant to the Stock Purchase Agreement for purchase
price adjustments or tax obligations, (viii) any cash
disbursements made during such period against non-current
liabilities to the extent not deducted in determining
Consolidated Net Income, and (ix) any cash restructuring
expenditures incurred during such period to the extent not
deducted in determining Consolidated Net Income for such
period and to the extent not exceeding $5,000,000."
2. Section 4 of the Credit Agreement is hereby amended as follows:
(a) Section 4B.2(c) of the Agreement is hereby amended and
restated to read as follows:
"(c) Subject to the terms hereof until the Term Loan-B
Maturity Date, when all unpaid principal plus accrued interest
therein shall be paid in full, the outstanding principal under
Term Notes-B shall be repaid in quarterly principal
installments, commencing on June 30, 2004, and on the last day
of each September, December, March and June thereafter, each
in the amount of $750,000."
(b) The following language is hereby added as Section 4B.2(d) of
the Credit Agreement:
"(d) In addition to any principal reductions required under
Section 4B.2(c) hereof, the Borrowers shall make a principal
payment on Term Loan B in the amount of $2,000,000, on April
30, 2004."
3. Section 8 of the credit Agreement is hereby amended as follows:
(a) Section 8.9 of the Agreement is hereby amended and restated to
read as follow:
"8.9 Maintain Senior Debt to EBITDA. Maintain as of the end of
each fiscal quarter, for the four quarters then ending,
commencing with the fiscal quarter ending March 31, 2004, a
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Senior Debt to EBITDA Ratio of not more than the following
amounts as of the dates set forth below:
March 31,2004 5.70 to 1.0
June 30, 2004 5.10 to 1.0
September 30, 2004 4.20 to 1.0
December 31, 2004 3.50 to 1.0
March 31, 2005 and thereafter 3.25 to 1.0"
(b) The following is hereby added as Section 8.20 of the Credit
Agreement:
"8.20 Inventory and Real Estate Appraisals. (a) On or before
May 31, 2004, deliver or cause to be delivered current
appraisals of all Inventory, equipment and machinery of the
Borrowers and their respective Subsidiaries (and take all
reasonable steps to cooperate with and assist the appraiser in
completing such appraisals as soon as practicable), such
appraisals (i) to be obtained at the Borrowers' expense, and
(ii) to indicate the net orderly liquidation value of such
Inventory, equipment and machinery, and otherwise to be
satisfactory in form and substance to the Banks; and
(b) On or before May 31, 2004, deliver or cause to be
delivered current appraisals of the real property owned by the
Borrowers and their respective Subsidiaries (and take all
reasonable steps to cooperate with and assist the appraiser in
completing such appraisals as soon as practicable), such
appraisals (i) to be obtained at the Borrowers' expense, and
(ii) to indicate the fair market value of such real property
and otherwise to be satisfactory in form and substance to the
Banks."
4. The following is hereby added as Section 9.16 of the Credit Agreement:
"9.16 Junior Creditor Notes. Amend or modify the Junior
Creditor Notes or make any payment with respect to the Junior
Creditor Notes except, in each case, to the extent permitted
under the terms of the Intercreditor Agreement."
5. Section 10.1(c) of the Credit Agreement is hereby amended by adding (i)
"or 8.20" immediately after the reference to "or 8.18", and (ii)
"provided that an Event of Default arising solely from a breach of
Section 8.9 (Maintain Senior Debt to EBITDA) shall be deemed to have
been cured if, within five days after the end of each fiscal quarter
(other than the last fiscal quarter of each fiscal year), the Borrowers
make a permitted payment
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on the outstanding amount of the Senior Debt from the proceeds received
from an Account Debtor in the ordinary course of business in an amount
sufficient to bring the ratio into compliance with the applicable
requirement under Section 8.9."
6. Notwithstanding anything to the contrary set forth in the Agreement, on
or after the date hereof, all Advances shall bear interest at the
Prime-based Rate and Borrowers may not elect the Eurodollar-based Rate
for any Advance.
7. The Banks hereby waive the default by Borrowers arising by reason of
the breach of Section 8.9 (Maintain Senior Debt to EBITDA) of the
Credit Agreement for the period ending December 31, 2003, and for no
other date or time period. Noting in this Fifth Amendment shall
constitute the waiver by the Banks of any Event of Default existing as
of the date hereof which is not identified on such Schedule or any
Event of Default which occurs after the date hereof.
8. This Fifth Amendment shall become effective (according to the terms
hereof) on the date confirmed in a written notice to the Company and
the Banks from the Agent (the "Fifth Amendment Effective Date") that
the following conditions have been fully satisfied by the Borrowers
(the "Conditions"):
(a) Agent shall have received counterpart originals of this Fifth
Amendment, in each case duly executed and delivered by the
Borrowers and the requisite Banks and the Agent in form
satisfactory to Agent and the requisite Banks.
(b) Agent shall have received an amendment to the Intercreditor
Agreement executed by the Junior Creditors, the Banks, the
Agent (in its capacity as collateral agent for the Banks and
the Junior Creditors) and the Borrowers, in the form attached
to this Fifth Amendment as Attachment 1.
(c) Agent shall have received certified copies of resolutions of
the Boards of Directors of each of the Borrowers authorizing,
as applicable, the execution and delivery of this Fifth
Amendment and the other Loan Documents required under this
Section 9 and the performance by the Borrowers of each of
their respective obligations under the Credit Agreement as
amended by this Fifth Amendment.
(d) Borrowers shall have paid to Agent, for distribution to the
Banks (based on their respective Percentages), as applicable
all interest, fees and other amounts, if any, owed to the
Agent and the Banks under the Credit Agreement or any other
Loan Document and accrued to the Fifth Amendment Effective
Date.
(e) Borrowers shall have paid to Agent, for distribution to the
Banks (as set forth below), an amendment fee equal to $200,000
(which such fee shall be deemed to be fully earned and
non-refundable), to be distributed by the Agent to each of the
Banks, pro rata, based on their respective Percentages.
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9. Borrowers hereby represent and warrant that, after giving effect to the
amendments and waivers contained herein, (a) execution, delivery and
performance of this Amendment and any other documents and instruments
required under this Amendment or the Agreement are within each of the
Borrowers' powers, have been duly authorized, are not in contravention
of law or the terms of each of the Borrowers' Articles of Incorporation
or Bylaws or Articles of Organization or Operating Agreement, as
applicable, and do not require the consent or approval of any
governmental body, agency, or authority; and this Amendment and any
other documents and instruments required under this Amendment or the
Agreement, will be valid and binding in accordance with their terms;
(b) the representations and warranties of Borrowers set forth in
Sections 7.1 through 7.17 and 7.19 through 7.23 of the Agreement are
true and correct in all material respects on and as of the date hereof
with the same force and effect as if made on and as of the date hereof;
(c) the representations and warranties of Borrowers set forth in
Section 7.18 of the Agreement are true and correct in all material
respects as of the date hereof with respect to the most recent
financial statements furnished to the Banks by Borrowers in accordance
with Section 8.1 of the Agreement; and (d) 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
Agreement, has occurred and is continuing as of the date hereof.
10. This Amendment may be signed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same
instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK, as Agent TRIM SYSTEMS OPERATING CORP.
By: [ILLEGIBLE] By:
---------------------------- ----------------------------
Its: Its: Vice President
---------------------------
TRIM SYSTEMS, LLC
By: [ILLEGIBLE]
----------------------------
Its: Vice President
TEMPRESS, INC.
By: [ILLEGIBLE]
----------------------------
Its: Vice President
REVOLVING/TERM BANKS: COMERICA BANK
By: [ILLEGIBLE]
----------------------------
Its:
---------------------------
U.S. BANK NATIONAL ASSOCIATION
By: /s/ XXXXXX X. XXXXXXX
----------------------------
Its: Vice President
---------------------------
J2R PARTNERS II-B, LLC
By: [ILLEGIBLE]
----------------------------
Its:
---------------------------
ONEX CORPORATION (successor in
interest to 1363880 Ontario, Inc.)
By: [ILLEGIBLE]
----------------------------
Its: [ILLEGIBLE]
---------------------------
SWING LINE BANK: COMERICA BANK
By: [ILLEGIBLE]
----------------------------
Its:
---------------------------
ACKNOWLEDGMENT OF GUARANTOR
The undersigned, being the Guarantor under that certain Guaranty dated
October 29, 1998, executed by the undersigned in favor of Comerica Bank, as
Agent for and on behalf of the Banks, with respect to obligations and
liabilities of Borrower to Banks ("Guaranty") affirms its obligations under the
Guaranty and consents to the amendments and waivers set forth above. Capitalized
terms used by not defined herein shall have the meanings set forth in the
Guaranty.
TRIM SYSTEMS, INC.
By: /s/ XXXX X. XXXXXX
---------------------------
Its:
---------------------------
Dated: February __, 2004
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