Item 1.01. Entry Into a Material Definitive Agreement.
On December 9, 2021, Unique Fabricating NA, Inc. (the “US Borrower”) and Unique-Intasco Canada, Inc. (the “CA Borrower” and together with the US Borrower, the “Borrowers” or the “Company”) and certain of their subsidiaries entered into the Third Amendment to Forbearance Agreement with respect to the Amended and Restated Credit Agreement, as amended, among the Borrowers, certain of their subsidiaries, with the financial institutions signatory thereto (the “Lenders”) and Citizens Bank, National Association, a national banking association, as Administrative Agent for the lenders (the “Agent”). As previously reported, the Company was in violation of the required Minimum Consolidated EBITDA Covenant (as amended by the Second Amendment to the Forbearance Agreement as of September 30, 2021). The Lenders in the Third Amendment to the Forbearance Agreement, among other things, agreed to forbear with respect to the Minimum Consolidated EBITDA covenant violation and to suspend the Minimum Consolidated EBITDA covenant during the remainder of the forbearance period, which ends on February 28, 2022.
The Third Amendment includes a new covenant which will be tested weekly on a rolling basis, beginning December 15, 2021, and requires that the Company’s actual cumulative total cash disbursements for the period being tested to not exceed total cash disbursements projected by the Company for the same period by more than 15% at any time during the forbearance period. The Third Amendment also reduces the maximum amount that may be borrowed under the revolving line of credit to $25 million from $27 million. As of December 7, 2021, the amount of borrowings under the revolving line of credit was $17.7 million and such borrowings have not exceeded $19 million outstanding at any time in 2021 to date.
The Third Amendment further modifies or establishes certain financial reporting requirements to the Lenders, including suspending the requirement for weekly cash flow projections for the remainder of the forbearance period and requiring on a weekly basis a comprehensive statement of actual cash flow for the preceding week and on a cumulative basis and comparing actual and projected cash flow for the period provided by the Company in connection with the Third Amendment. Except as specifically provided in the Third Amendment, the Loan Documents as defined remain in full force and effect.
This summary of the Third Amendment to Forbearance Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Third Amendment to Forbearance Agreement as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01. Exhibits.
(d) Exhibits. The following exhibits are filed herewith: