8-K
Commercial Vehicle Group, Inc. (CVGI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 12, 2022
Commercial Vehicle Group, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-34365 | 41-1990662 | |||
|---|---|---|---|---|---|
| (State or other jurisdiction | (Commission | (I.R.S. Employer | |||
| of incorporation) | File Number) | Identification No.) | 7800 Walton Parkway, New Albany, Ohio | 43054 | |
| --- | --- | ||||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 614-289-5360
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.1 per share | CVGI | The NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | ☐ |
|---|---|
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
Item 1.01. Entry into a Material Definitive Agreement.
Amendment to Credit Agreement
On May 12, 2022, Commercial Vehicle Group, Inc. (the “Company”) and certain of its subsidiaries entered into a second amendment (the “Amendment”) to its credit agreement (as so amended, the “Amended Credit Agreement”) between, among others, Bank of America, N.A. as administrative agent (the “Administrative Agent”) and other lenders party thereto (the “Lenders”) pursuant to which the Lenders upsized the existing term loan facility to $175 million in aggregate principal amount (the “Term Loan Facility”) and increased the revolving credit facility commitments by $25 million to an aggregate of $150 million in revolving credit facility commitments (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”). Subject to the terms of the Amended Credit Agreement, the Revolving Credit Facility includes a $10 million swing line sublimit and a $10 million letter of credit sublimit. The Amended Credit Agreement provides for an incremental term facility agreement and/or an increase of the Revolving Credit Facility (together, the “Incremental Facilities”), in a maximum aggregate amount of (a) up to the date of receipt of financial statements for the fiscal quarter ending June 30, 2022, $75 million, and (b) thereafter, (i) $75 million less the aggregate principal amount of Incremental Facilities incurred before such date, plus (ii) an unlimited amount if the pro forma consolidated total leverage ratio (assuming the Incremental Facilities are fully drawn) is less than 2.50:1.0. The Credit Facilities mature on May 12, 2027 (the “Maturity Date”).
The proceeds of the Credit Facilities will be used, together with cash on hand of the Company, to (a) pay transaction costs, fees and expenses incurred in connection therewith and in connection with the Amended Credit Agreement and (b) for working capital and other lawful corporate purposes of the Company and its subsidiaries.
Interest Rates and Fees
Amounts outstanding under the Credit Facilities and the commitment fee payable in connection with the Credit Facilities accrue interest at a per annum rate equal to (at the Company’s option) the base rate or the Term SOFR (including a credit spread adjustment) plus a rate which will vary according to the Consolidated Total Leverage Ratio as set forth in the most recent compliance certificate received by the Administrative Agent, as set out in the following table:
| Pricing Tier | Consolidated Total<br>Leverage Ratio | Commitment Fee | Letter of Credit Fee | Term SOFR Loans | Base Rate Loans |
|---|---|---|---|---|---|
| I | > 3.50 to 1.0 | 0.35% | 2.75% | 2.75% | 1.75% |
| II | < 3.50 to 1.0 but<br><br>> 2.75 to 1.0 | 0.30% | 2.50% | 2.50% | 1.50% |
| III | < 2.75 to 1.0 but<br>> 2.00 to 1.0 | 0.25% | 2.25% | 2.25% | 1.25% |
| IV | < 2.00 to 1.0 but<br>> 1.50 to 1.0 | 0.20% | 2.00% | 2.00% | 1.00% |
| V | < 1.50 to 1.0 | 0.15% | 1.75% | 1.75% | 0.75% |
Guarantee and Security
All obligations under the Amended Credit Agreement and related documents are unconditionally guaranteed by each of the Company’s existing and future direct and indirect wholly owned material domestic subsidiaries, subject to certain exceptions (the “Guarantors”). All obligations of the Company under the Amended Credit Agreement and the guarantees of those obligations are secured by a first priority pledge of substantially all of the assets of the Company and of the Guarantors, subject to certain exceptions. The property pledged by the Company and the Guarantors includes a first priority pledge of all of the equity interests owned by the Company and the Guarantors in their respective domestic subsidiaries and a first priority pledge of the equity interests owned by the Company and the Guarantors in certain foreign subsidiaries, in each case, subject to certain exceptions.
Covenants and Other Terms
The Amended Credit Agreement contains customary restrictive covenants, including, without limitation, limitations on the ability of the Company and its subsidiaries to incur additional debt and guarantees; grant certain liens on assets; pay dividends or make certain other distributions; make certain investments or acquisitions; dispose of certain assets; make payments on certain indebtedness; merge, combine with any other person or liquidate; amend organizational documents; make material changes in accounting treatment or reporting practices; enter into certain restrictive agreements; enter into certain hedging agreements; engage in transactions with
affiliates; enter into certain employee benefit plans; make acquisitions; and other matters customarily included in senior secured loan agreements.
The Amended Credit Agreement also contains customary reporting and other affirmative covenants, as well as customary events of default, including, without limitation, nonpayment of obligations under the Credit Facilities when due; material inaccuracy of representations and warranties; violation of covenants in the Amended Credit Agreement and certain other documents executed in connection therewith; breach or default of agreements related to material debt; revocation or attempted revocation of guarantees; denial of the validity or enforceability of the loan documents or failure of the loan documents to be in full force and effect; certain material judgments; certain events of bankruptcy or insolvency; certain Employee Retirement Income Securities Act events; and a change in control of the Company. Certain of the defaults are subject to exceptions, materiality qualifiers, grace periods and baskets customary for credit facilities of this type.
The Amended Credit Agreement includes (a) a minimum consolidated fixed charge coverage ratio of 1.20:1.0, and (b) a maximum consolidated total leverage ratio of 3.75:1.0 (which will be subject to step-downs to 3.50:1.0 at the end of the fiscal quarter ending March 31, 2023; to 3.25:1.0 at the end of the fiscal quarter ending June 30, 2023; and to 3.00:1.0 for each fiscal quarter on and after the fiscal quarter ending September 30, 2023).
Repayment and prepayment
The Amended Credit Agreement requires the Company to make quarterly amortization payments to the Term Loan Facility at an annualized rate of the loans under the Term Loan Facility for every year as follows: 5.0%, 7.5%, 10.0%, 12.5% and 15%. The Amended Credit Agreement also requires all outstanding amounts under the Credit Facilities to be repaid in full on the Maturity Date.
The Amended Credit Agreement requires mandatory prepayments from the receipt of proceeds of dispositions or debt issuance, subject to certain exceptions and ability to re-invest and use proceeds towards acquisitions permitted by the Amended Credit Agreement.
Voluntary prepayments of amounts outstanding under the Credit Facilities are permitted at any time, without premium or penalty.
The foregoing does not constitute a complete summary of the terms of the Amended Credit Agreement. A copy of the Amendment is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
The Amended Credit Agreement contains customary representations and warranties by the Company, The representations and warranties contained in the Amended Credit Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.
Item 7.01. Regulation FD Disclosure.
On May 18, 2022, the Company issued a press release announcing the aforementioned transactions described above. A copy of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibit
| Exhibit No. | Description |
|---|---|
| 10.1 | Second Amendment dated May 12, 2022 to the Credit Agreement, dated as of April 30, 2021 between, among others, the Company, Bank of America, N.A. as administrative agent and other lenders party thereto. |
| 99.1 | Press release of the Company May 18, 2022. |
Cautionary Note Regarding Forward-Looking Information
This Current Report on Form 8-K contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions. In particular, this Current Report (including the press release furnished herein) may contain forward-looking statements about the Company’s expectations for future periods with respect to its plans to improve financial results, the future of the Company’s end markets, including the short-term and long-term impact of the COVID-19 pandemic on our business, changes in the Class 8 and Class 5-7 North America truck build rates, performance of the global construction equipment business, the Company’s prospects in the wire harness, warehouse automation and electric vehicle markets, the Company’s initiatives to address customer needs, organic growth, the Company’s strategic plans and plans to focus on certain segments, completion faced the Company, volatility in and disruption to the global economic environment and the Company’s financial position or other financial information. These statements are based on certain assumptions that the Company has made in light of its experience as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including those included in the Company’s filings with the SEC. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by such cautionary statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COMMERCIAL VEHICLE GROUP, INC. | ||
|---|---|---|
| May 18, 2022 | By: | /s/ Christopher H. Bohnert |
| Name: | Christopher H. Bohnert | |
| Title: | Chief Financial Officer |
Document
Exhibit 10.1
Execution Version
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of May 12, 2022 (the “Second Amendment Effective Date”), is entered into among COMMERCIAL VEHICLE GROUP, INC., a Delaware corporation (the “Borrower”), the Guarantors party hereto, the Lenders party hereto (including each Exiting Lender (as defined below)), and BANK OF AMERICA, N.A., as the Administrative Agent, the L/C Issuer, and the Swingline Lender. All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Existing Credit Agreement (as defined below) or the Amended Credit Agreement (as defined below), as applicable.
RECITALS
WHEREAS, the Borrower, the Guarantors party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as the Administrative Agent, the L/C Issuer, and the Swingline Lender, entered into that certain Credit Agreement, dated as of April 30, 2021 (as amended, restated, amended and restated, supplemented, extended, replaced or otherwise modified from time to time prior to the Second Amendment Effective Date, the “Existing Credit Agreement”);
WHEREAS, the Borrower has requested that the Existing Credit Agreement be amended as set forth below, subject to the terms and conditions specified in this Amendment; and
WHEREAS, the parties hereto are willing to amend the Existing Credit Agreement, subject to the terms and conditions specified in this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Amendments to Existing Credit Agreement; Effect of this Amendment; No Impairment; Treatment of Existing Eurodollar Rate Loans; Reallocation.
(a) Effective as of the Second Amendment Effective Date, the parties hereto agree that: (i) the Existing Credit Agreement is hereby amended to (A) delete the stricken text (indicated textually in the same manner as the following example: stricken text or stricken text), and (B) add the bold underlined text (indicated textually in the same manner as the following example: double-underlined text or double-underlined text), in each case, as set forth in the credit agreement attached hereto as Annex A (the Existing Credit Agreement, as amended as set forth on Annex A attached hereto, the “Amended Credit Agreement”); (ii) Schedules 1.01(b), 7.01, 7.02, and 7.04 are amended to read as set forth on Schedules 1.01(b), 7.01, 7.02, and 7.04 attached hereto; and (iii) each reference to “Eurodollar Rate Loans” in Exhibits D and E to the Existing Credit Agreement is amended to read “Term SOFR Loans”. The Amended Credit Agreement is not a novation of the Existing Credit Agreement.
(b) Except as expressly modified and amended in this Amendment, all of the terms, provisions and conditions of the Loan Documents shall remain unchanged and in full force and effect. The Loan Documents and any and all other documents heretofore, now or hereafter executed and delivered pursuant to the terms of the Existing Credit Agreement are hereby amended so that any reference to the Existing Credit Agreement shall mean a reference to the Amended Credit Agreement.
(c) Except as expressly set forth herein this Amendment shall not (i) by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any Secured Party under the Existing Credit Agreement or any other Loan Document and (ii) alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Existing Credit Agreement or any other Loan Document, all of which, as amended, supplemented or otherwise modified hereby, are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle any
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Loan Party to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Existing Credit Agreement or any other Loan Document in similar or different circumstances.
(d) It is understood and agreed that, with respect to any Revolving Loan or any Term A Loan bearing interest at the Eurodollar Rate and outstanding on the Second Amendment Effective Date, such Revolving Loan or such Term A Loan, as applicable, shall continue as a Revolving Loan or a Term A Loan, as applicable, outstanding under the Amended Credit Agreement, bearing interest at Term SOFR and having Interest Periods specified in the Loan Notice delivered to the Administrative Agent pursuant Section 2(n). Each Lender party to this Amendment that is a lender under the Existing Credit Agreement (including each Exiting Lender) hereby waives any right to request compensation for losses under Section 3.05 of the Existing Credit Agreement in connection with the (i) continuation of Revolving Loans and Term A Loans into the Amended Credit Agreement as contemplated by this Section 1(d), and (ii) reallocation and restatement of loans and commitments contemplated by Section 1(e).
(e) On the Second Amendment Effective Date, the loans and commitments made by the lenders under the Existing Credit Agreement shall be re-allocated and restated among the Lenders so that, and loans and commitments shall be made by the Lenders so that, as of the Second Amendment Effective Date, the respective Commitments and Applicable Percentages of the Lenders shall be as set forth on Schedule 1.01(b) attached hereto.
2. Conditions Precedent. This Amendment shall be effective upon satisfaction of the following conditions precedent:
(a) the Administrative Agent shall have received counterparts of this Amendment executed by a Responsible Officer of each Loan Party, each Lender (including each Exiting Lender), the L/C Issuer, the Swingline Lender, and the Administrative Agent;
(b) the Administrative Agent shall have received the following: (i) copies of the Organic Documents of each Loan Party certified to be true and complete as of a recent date by the appropriate Governmental Authority of the jurisdiction of its organization and certified by a Responsible Officer of such Loan Party to be true and correct as of the Second Amendment Effective Date (or, as to any such Organic Documents that have not been amended, modified or terminated since the Closing Date, certifying that such Organic Documents have not been amended, modified or terminated since the Closing Date and remain in full force and effect, and true and complete, in the form delivered to the Administrative Agent on the Closing Date); (ii) such certificates of resolutions or other action, incumbency certificates, and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment, the Amended Credit Agreement and the other Loan Documents to which such Loan Party is a party; and (iii) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and is validly existing, in good standing and qualified to engage in business in its jurisdiction of organization;
(c) the Administrative Agent shall have received an opinion or opinions of counsel for the Loan Parties, dated the Second Amendment Effective Date and addressed to the Administrative Agent and the Lenders, in form and substance acceptable to the Administrative Agent;
(d) the Administrative Agent shall have received projections and a budget for the Borrower and its Subsidiaries for the five (5) years following the Second Amendment Effective Date, in form and substance satisfactory to the Administrative Agent;
(e) since December 31, 2021, there shall not have occurred any event or condition that has had or could be reasonably expected, either individually or in the aggregate, to have a Material Adverse Effect;
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(f) the Administrative Agent shall have received: (i)(A) searches of UCC filings in the jurisdiction of organization of each Loan Party and each jurisdiction where any Collateral is located or where a filing would need to be made in order to perfect the Administrative Agent’s security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens, and (B) tax lien and judgment searches; (ii) searches of ownership of registered and pending Intellectual Property in the United States Copyright Office and the United States Patent and Trademark Office and duly executed notices of grant of security interest in the form required by the Collateral Documents as are necessary to perfect the Administrative Agent’s security interest in such Intellectual Property; (iii) completed UCC financing statements for each appropriate jurisdiction as is necessary to perfect the Administrative Agent’s security interest in the Collateral; and (iv) copies of insurance certificates and endorsements of insurance evidencing insurance meeting the requirements set forth in the Amended Credit Agreement and in the Collateral Documents;
(g) the Administrative Agent shall have received a Solvency Certificate signed by a Responsible Officer of the Borrower certifying as to the financial condition, solvency and related matters of the Borrower and its Subsidiaries on a Consolidated basis after giving effect to the transactions contemplated herein and by the Amended Credit Agreement to occur on the Second Amendment Effective Date;
(h) the Administrative Agent shall have received a certificate signed by a Responsible Officer of the Borrower certifying that the conditions specified in Sections 2(e), (i), (j) and (k) have been satisfied;
(i) all board of director (or equivalent), governmental, shareholder and material third party consents and approvals necessary in connection with this Amendment, the Amended Credit Agreement and the other Loan Documents shall have been obtained and shall be in full force and effect;
(j) there shall not exist any action, suit, investigation or proceeding pending or, to the knowledge of the Borrower, threatened in writing in any court or before any arbitrator or Governmental Authority that could reasonably be expected to be adversely determined which, if so adversely determined, could reasonably be expected to have a Material Adverse Effect;
(k) after giving effect to the transactions contemplated herein and by the Amended Credit Agreement to occur on the Second Amendment Effective Date, (i) no Default shall have occurred and be continuing, and (ii) the representations and warranties of the Borrower and each other Loan Party contained in this Amendment, the Amended Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall (A) with respect to representations and warranties that contain a materiality qualification, be true and correct on and as of the Second Amendment Effective Date by reference to the facts and circumstances existing as of the Second Amendment Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and (B) with respect to representations and warranties that do not contain a materiality qualification, be true and correct in all material respects on and as of the Second Amendment Effective Date by reference to the facts and circumstances existing as of the Second Amendment Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and except that for purposes of this Section 2(k)(ii), the representations and warranties contained in Section 5.06 of the Amended Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b) of the Existing Credit Agreement;
(l) the Borrower shall have (or concurrently with the Credit Extensions to be made on the Second Amendment Effective Date) (i) paid all accrued and unpaid interest on the loans outstanding under the Existing Credit Agreement to the Second Amendment Effective Date, and (ii) paid all accrued fees owing to the lenders under the Existing Credit Agreement to the Second Amendment Effective Date;
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(m) all of the existing Debt of the Borrower and its Subsidiaries (other than Debt permitted to exist pursuant to Section 7.01 of the Amended Credit Agreement) shall be repaid in full, all commitments in connection therewith shall be terminated, and all guarantees, liens and security interests related thereto shall be terminated;
(n) the Administrative Agent shall have received a Loan Notice with respect to any Revolving Loans or Term A Loans, as applicable, to be advanced on, or to remain outstanding on, the Second Amendment Effective Date;
(o) (i) the Administrative Agent and each Lender shall have completed a due diligence investigation of the Borrower and its Subsidiaries in scope, and with results, satisfactory to the Administrative Agent or such Lender, including U.S. Department of Treasury, Office of Foreign Assets Control, Foreign Corrupt Practices Act and “know your customer” due diligence; (ii) the Loan Parties shall have provided to the Administrative Agent and each Lender the documentation and other information requested by the Administrative Agent or such Lender in order to comply with applicable law, including the PATRIOT Act; and (iii) if any Loan Party qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, such Loan Party shall deliver, to each Lender that so requests, a Beneficial Ownership Certification in relation to such Loan Party;
(p) the Administrative Agent shall have received all fees required to be paid on or prior to the Second Amendment Effective Date to the Administrative Agent, the Lenders, or BofA Securities; and
(q) the Loan Parties shall have paid all expenses of the Administrative Agent required to be reimbursed by the Loan Parties, including the reasonable fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Second Amendment Effective Date, plus such additional amounts of such reasonable fees, charges and disbursements of such counsel as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided, that, such estimate shall not thereafter preclude a final settling of accounts among the Loan Parties and the Administrative Agent).
Without limiting the generality of the provisions of Section 9.03(c)(vi) of the Amended Credit Agreement or the last sentence of Section 9.04 of the Amended Credit Agreement, for purposes of determining compliance with the conditions specified in this Section 2, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Second Amendment Effective Date specifying its objection thereto.
3 Miscellaneous.
(a) The Loan Documents and the obligations of the Loan Parties thereunder are hereby ratified and confirmed and shall remain in full force and effect according to their terms. This Amendment is a Loan Document.
(b) Each Guarantor (i) acknowledges and consents to all of the terms and conditions of this Amendment, (ii) affirms all of its obligations under the Loan Documents, and (iii) agrees that this Amendment does not operate to reduce or discharge its obligations under the Loan Documents.
(c) Each Loan Party represents and warrants that: (i) such Loan Party is duly authorized to execute, deliver and perform its obligations under this Amendment; (ii) the execution, delivery and performance of this Amendment by such Loan Party have been duly authorized by all necessary action, and do not (A) require any consent or approval of any holders of Equity Interests of such Loan Party, other than those already obtained, (B) contravene the
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Organic Documents of such Loan Party, (C) violate or cause a default under any applicable Law, Material Contract or Restrictive Agreement, except to the extent such violation or default could not reasonably be expected to result in a Material Adverse Effect, or (D) result in or require the imposition of any Lien (other than Permitted Liens) on any Property of the Borrower or any Subsidiary; (iii) this Amendment is a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally; and (iv) the Persons signing this Amendment as Guarantors include all of the Subsidiaries existing as of the Second Amendment Effective Date that are required to become Guarantors pursuant to the Existing Credit Agreement on or prior to the Second Amendment Effective Date.
(d) Subject to Section 11.18 of the Amended Credit Agreement, this Amendment may be in the form of an Electronic Record and may be executed using Electronic Signatures (including facsimile and .pdf) and shall be considered an original, and shall have the same legal effect, validity and enforceability as a paper record. This Amendment may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Amendment. For the avoidance of doubt, and subject to Section 11.18 of the Amended Credit Agreement, the authorization under this Section 3(d) may include use or acceptance by the Administrative Agent or any Lender Party of a manually signed paper Amendment which has been converted into electronic form (such as scanned into .pdf), or an electronically signed Amendment converted into another format, for transmission, delivery and/or retention.
(e) If any provision of this Amendment is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Amendment shall not be affected or impaired thereby, and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
(f) THIS AMENDMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AMENDMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(g) The terms of Sections 11.14 and 11.15 of the Amended Credit Agreement with respect to submission to jurisdiction, waiver of venue and waiver of jury trial are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.
4. Exiting Lenders.
(a) Each Person executing this Amendment under the heading “Exiting Lenders” on the signature pages hereto, in its capacity as a lender under the Existing Credit Agreement (each, an “Exiting Lender”), is signing this Amendment for the purposes of amending the Existing Credit Agreement as contemplated by Section 1 and assigning its revolving commitment and/or the outstanding portion of the term A loan it holds under the Existing Credit Agreement on the Second Amendment Effective Date to one or more Lenders under the Amended Credit Agreement as described in the following sentence. Upon giving effect to this Amendment, (i) each Exiting Lender’s portion of the term A loan outstanding under the Existing Credit Agreement shall be fully assigned at par to one or more Lenders under the Amended Credit Agreement, and each Exiting Lender’s revolving commitment under the Existing Credit Agreement shall be fully assigned to one or more Lenders under the Amended Credit Agreement, in each case so that, after giving effect to such assignments, the Lenders under the Amended Credit Agreement shall have Commitments and Applicable Percentages as set forth on Schedule 1.01(b) attached hereto, (ii) no Exiting Lender shall be a Lender under the Amended Credit Agreement, (iii) no Exiting Lender shall have any rights, obligations or duties as a lender under
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the Amended Credit Agreement or any other Loan Document, except for any right, obligation or duty which by the express terms of the Existing Credit Agreement or any other Loan Document would survive termination of the Existing Credit Agreement or such other Loan Document, and (iv) the Loan Parties shall have no obligations or liabilities to any Exiting Lender, except for obligations or liabilities which by the express terms of the Existing Credit Agreement or any other Loan Document would survive termination of the Existing Credit Agreement or such other Loan Document.
(b) With respect to any obligating owing to any Exiting Lender in connection with the Existing Credit Agreement and the other Loan Documents that are not otherwise satisfied by the assignments and reallocations described in this Amendment, the Borrower hereby agrees to pay to each such Exiting Lender all such remaining outstanding obligations (other than contingent obligations not then due and owing or for which no claim has been made) owing to such Exiting Lender, if any, in connection with the Existing Credit Agreement and the other Loan Documents substantially contemporaneously with the Second Amendment Effective Date. Each Exiting Lender acknowledges that, unless and until the Second Amendment Effective Date occurs, it shall remain a Lender under the Existing Credit Agreement with the rights and obligations of a Lender thereunder in accordance with the terms thereof. At the expense of the Borrower, each Exiting Lender shall take such further action and execute such other documents as may be necessary to effectuate the purposes of this Section 4.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
BORROWER: COMMERCIAL VEHICLE GROUP, INC.,
a Delaware corporation
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President and Chief Executive Officer
GUARANTORS: CVG NATIONAL SEATING COMPANY, LLC,
a Delaware limited liability company
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President
CVG MONONA WIRE, LLC,
an Iowa limited liability company
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President
TRIM SYSTEMS, INC.,
a Delaware corporation
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President
TRIM SYSTEMS OPERATING CORP.,
a Delaware corporation
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President
CABARRUS PLASTICS, INC.,
a North Carolina corporation
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President
COMMERCIAL VEHICLE GROUP, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
CVG SPRAGUE DEVICES, LLC,
a Delaware limited liability company
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President
MAYFLOWER VEHICLE SYSTEMS, LLC,
a Delaware limited liability company
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President
CVG MANAGEMENT CORPORATION,
a Delaware corporation
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President
CVG ALABAMA, LLC,
a Delaware limited liability company
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President
CVG FSE, LLC,
a Delaware limited liability company
By: /s/ Harold Bevis
Name: Harold C. Bevis
Title: President
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ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
as the Administrative Agent
By: /s/ Angela Berry
Name: Angela Berry
Title: Assistant Vice President
COMMERCIAL VEHICLE GROUP, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
LENDERS: BANK OF AMERICA, N.A.,
as a Lender, the L/C Issuer, and the Swingline Lender
By: /s/ Christopher J. Heitker
Name: Christopher J. Heitker
Title: Vice President
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PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Anthony E Irwin
Name: Anthony E Irwin
Title: Vice President
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BANK OF THE WEST,
as a Lender
By: /s/ Jamie Bretschneider
Name: Jamie Bretschneider
Title: VP
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HSBC BANK USA, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Shaun R. Kleinman
Name: Shaun R. Kleinman
Title: Senior Vice President
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CITIZENS BANK, N.A.,
as a Lender
By: /s/ Stephen A. Maenhout
Name: Stephen A. Maenhout
Title: Senior Vice President
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U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Matthew Fisher
Name: Matthew Fisher
Title: Vice President
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KEYBANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Brian Emmerling
Name: Brian Emmerling
Title: Sr. Vice President
8
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ASSOCIATED BANK N.A.,
as a Lender
By: /s/ J. E. Bergren
Name: J. E. Bergren
Title: Senior Vice President
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CIBC BANK USA,
as a Lender
By: /s/ Robert Cheffins
Name: Robert Cheffins
Title: Managing Director
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COMERICA BANK,
as a Lender
By: /s/ Michael D. Malaga
Name: Michael D. Malaga
Title: Vice President
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EXITING LENDER: FIFTH THIRD BANK, NATIONAL ASSOCIATION,
as an Exiting Lender
By: /s/ Will Batchelor
Name: Will Batchelor
Title: Vice President
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Annex A
Amended Credit Agreement
See attached.
Schedule 1.01(b)
Commitments and Applicable Percentages; L/C Commitment; Swingline Commitment
| Lender | Revolving Commitment | Applicable Percentage of Revolving Facility | Term A Commitment | Applicable Percentage of Term A Facility |
|---|---|---|---|---|
| Bank of America, N.A. | $24,230,769.24 | 16.153846160% | $28,269,230.76 | 16.153846149% |
| PNC Bank, National Association | $24,230,769.23 | 16.153846153% | $28,269,230.77 | 16.153846155% |
| Bank of the West | $16,153,846.15 | 10.769230767% | $18,846,153.85 | 10.769230771% |
| HSBC Bank USA, National Association | $16,153,846.15 | 10.769230767% | $18,846,153.85 | 10.769230771% |
| U.S. Bank National Association | $16,153,846.15 | 10.769230767% | $18,846,153.85 | 10.769230771% |
| KeyBank National Association | $16,153,846.15 | 10.769230767% | $18,846,153.85 | 10.769230771% |
| Citizens Bank, N.A. | $13,846,153.85 | 9.230769233% | $16,153,846.15 | 9.230769229% |
| Associated Bank N.A. | $8,076,923.08 | 5.384615387% | $9,423,076.92 | 5.384615383% |
| CIBC Bank USA | $8,076,923.08 | 5.384615387% | $9,423,076.92 | 5.384615383% |
| Comerica Bank | $6,923,076.92 | 4.615384613% | $8,076,923.08 | 4.615384617% |
| Total | $150,000,000.00 | 100.000000000% | $175,000,000.00 | 100.000000000% |
| L/C Issuer | L/C Commitment | |||
| --- | --- | |||
| Bank of America, N.A. | $10,000,000.00 | |||
| Swingline Lender | Swingline Commitment | |||
| --- | --- | |||
| Bank of America, N.A. | $10,000,000.00 |
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Schedule 7.01
Existing Debt
Intercompany Loans (the “Intercompany Loans”):
| Lender: | Borrower: | Loan<br>Currency | Principal<br>Outstanding<br>Balance as of<br>March 31, 2022 |
|---|---|---|---|
| PEKM Kabeltechnik s.r.o. | CVG Ukraine LLC | EUR | 700,000.00 |
| CVG Global s.a r.l. | PEKM Kabeltechnik s.r.o. | EUR | 2,610,969.56 |
| CVG Global S.a.r.l. | KAB Seating Limited | GBP | 1,627,020.00 |
| CVG Global S.a.r.l. | Commercial Vehicle Group (Thailand) Company Limited | THB | 15,000,000.00 |
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Schedule 7.02
Existing Liens
None.
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Schedule 7.04
Permitted Investments
1)The intercompany ownership stakes set forth on Schedule 5.04 are incorporated herein by reference.
2)The Intercompany Loans are incorporated herein by reference.
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Document
Exhibit 99.1
CVG ANNOUNCES AMENDMENT TO CREDIT FACILITY
NEW ALBANY, OHIO (May 18, 2022) - CVG (NASDAQ: CVGI) ("CVG" or the "Company") today announced that on May 12, 2022 it had entered into an amendment to increase its existing senior secured credit facilities to $325 million from $275 million consisting of a $175 million Term Loan A (the “Term Loan A”) and a $150 million Revolving Credit Facility (the “Revolver” and together with the Term Loan A the “Senior Secured Credit Facilities”). The amendment provides the Company with additional capital flexibility to execute upon its transformation and growth initiatives.
Chris Bohnert, Chief Financial Officer, commented, “The successful completion of our amended credit facilities provides an additional $50 million of liquidity offering the Company further flexibility to execute our business transformation and strategic growth initiatives. In addition to the increase in capital, we negotiated a more accommodative interest rate to include a reduction of 50 bps leading to annual interest expense savings of approximately $1 million, depending on total borrowings. We appreciate the confidence that our banking group has in our management team’s ability to execute upon our strategy.”
As part of the amended terms of the agreement, the maturity date of the Senior Secured Credit Facilities has been extended by twelve months to May 12, 2027, the interest rate will decrease by 50 bps at various leverage ratios based on SOFR, and pro-forma leverage will increase from the current 3.25x to 3.75x until December 31, 2022 with a quarterly step down of 25 bps to 3.00x leverage by September 30, 2023 and remain at this level thereafter. Further, separate from the Company’s annual $35 million cap, a one-time $45 million capital project basket was included in the amendment. All other key provisions, including the $75 million accordion, acquisition holiday, and other baskets remain unchanged.
Additional information regarding the Senior Secured Credit Facilities can be found in Form 8-K filed with the Securities and Exchange Commission.
For further information, please contact IR@CVGRP.com.
Company Contact
Christopher Bohnert, Chief Financial Officer
CVG
IR@CVGRP.com
About CVG
At CVG, we deliver real solutions to complex design, engineering and manufacturing problems across a range of global industries by innovating, constantly adding value, and treating our customer's bottom line as if it were our own. Information about the Company and its products is available on the internet at www.cvgrp.com.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions. In particular, this press release may contain forward-looking statements about the Company’s expectations for future periods with respect to its plans to improve financial results, the future of the Company’s end markets, including the short-term and long-term impact of the COVID-19 pandemic on our business, changes in the Class 8 and Class 5-7 North America truck build rates, performance of the global construction equipment business, the Company’s prospects in the wire harness, warehouse automation and electric vehicle markets, the Company’s initiatives to address customer needs, organic growth, the Company’s strategic plans and plans to focus on certain segments, competition faced by the Company, volatility in and disruption to the global economic environment and the Company’s financial position or other financial information. These statements are based on certain assumptions that the Company has made in light of its experience as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including those included in the Company’s filings with the SEC. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by such cautionary statements.