EXHIBIT 10(ff)
FIRST AMENDMENT
TO
LINE OF CREDIT AND TERM LOAN AGREEMENT
THIS FIRST AMENDMENT TO LINE OF CREDIT AND TERM LOAN AGREEMENT dated as
of the 24th day of November, 2003, by and between RIVIERA TOOL COMPANY, a
Michigan corporation (the "Borrower"), and COMERICA BANK, a Michigan banking
corporation (the "Bank");
WITNESSETH:
WHEREAS, Borrower and Bank are parties to that certain Revolving Credit
Loan Agreement dated as of December 23, 2002 (as amended, herein called the
"Agreement"), under and pursuant to which Bank agreed to make certain loan and
credit facilities available to Borrower, subject to and in accordance with the
terms and conditions of the Agreement; and
WHEREAS, Borrower is in default of Sections 7.11(b) and (c) and 7.12 of
the Agreement as of August 31, 2003 (the "Existing Defaults"); and
WHEREAS, Borrower and Bank desire to amend the Agreement as herein
provided;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Borrower and Bank hereby agree as follows:
1. The definitions of "Eligible Inventory," "Formula Amount,"
"Line of Credit Commitment," "Maturity Date" and "Termination Date" in Section 1
of the Agreement are deleted in their entirety and the following substituted
therefore;
"Eligible Inventory" shall mean all of the inventory of the
Borrower which is in good and merchantable condition, is not obsolete
or discontinue, and which would properly be classified as
"work-in-process" or "unbilled contracts in process" under GAAP,
excluding:
(a) consigned goods and inventory located outside the
United States of America;
(b) inventory covered by or subject to a seller's right
to repurchase, or any consensual or nonconsensual lien or security
interest (including without limitation purchase money security
interests) other than 9I) the liens in favor of Bank and (ii) liens
securing the Subordinated Debt;
(c) inventory delivered to a customer, unless such
inventory is subject to Borrower's perfected first priority security or
title retention interest, and, at Bank's request, Borrower provides
evidence satisfactory to the Bank of the same;
(d) advance xxxxxxxx on inventory in excess of the cost
on such inventory;
(e) inventory that has been or is being outsourced or
subcontracted, which is (i) not in Borrower's possession or (ii) any
portion of the contract price for such inventory has not been paid.
"Formula Amount" shall mean, as of the date of any
determination thereof, the sum of:
(a) eighty percent (80%) of Eligible Accounts Receivable,
excluding Progress Payment Accounts Receivable, less than 120 days past
invoice, plus
(b) eighty percent (80%) of Progress Payment Accounts
Receivable less than 30 days past invoice, plus
(c) eighty percent (80%) of Retention Receivables less
than 180 days past invoice for Oxford Automotive and Drive Automotive
related to the Mercedes 251 Program, plus
(d) the lesser of fifty percent (50%) of Eligible
Inventory or Two Million One Hundred Fifty Thousand Dollars
($2,150,000).
"Line of Credit Commitment" shall mean Ten Million Dollars
($10,000,000). Within the Line of Credit Commitment the Bank has agreed
to issue Letters of Credit in an aggregate stated amount outstanding
not to exceed the Letter of Credit Amount.
"Maturity Date" shall mean, in the case of the Term Loan,
December 1, 2004.
"Termination Date" shall mean the earlier to occur of the date
on which the Line of Credit Commitment is terminated pursuant to
Section 8.2 or December 1, 2004.
2. Sections 7.5 and 7.11 of the Agreement are deleted in their
entirety and the following substituted therefore:
7.5 Extension of Credit. Make loans, advances or
extensions of credit to any Person except sales on open account and
otherwise in the ordinary course of business; provided, however,
Borrower shall not ship any tooling to Oxford Automotive prior to
receiving payment in full for such tooling unless Borrower has
perfected a security interest of first priority satisfactory to the
Bank (and provided evidence to the Bank of such security interest).
7.11 Financial Covenants. Permit:
(a) The Debt Service Coverage Ratio to be less
than 3.50 to 1.00 as of the end of each month, commencing on (and
including) August 31, 2003, and at all times thereafter.
(b) Its Tangible Effective Net Worth, to be less
than the following described amounts as of the following described
dates:
(i) From August 31, 2003, until February 28,
2004: $13,500,000;
(ii) From February 29, 2004, until May 30, 2004:
$13,750,000;
(iii) From May 31, 2004, until August 30, 2004:
$14,000,000;
(iv) From August 31, 2004, and at all times
thereafter: $14,500,000.
(c) The Debt to Worth Ratio to be greater than
the following described amounts as of the following described dates:
(i) From August 31, 2003, until August 30, 2004:
1.50 to 1.0;
(ii) From August 31, 2004, and at all times
thereafter: 1.25 to 1.0.
3. Simultaneously with the execution of this Amendment, Borrower
agrees to execute and deliver to the Bank the Line of Credit Note in the form of
Exhibit A attached hereto.
4. Borrower hereby represents and warrants that, after giving
effect to the amendment 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 Borrower's corporate powers and
authorities, have been duly authorized by all necessary or requisite corporate
action, are not in contravention of law or the terms of Borrower's Articles of
Incorporation, Bylaws, or other charter or other constitutional documents, 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 Borrower as set
forth in Article 5 of the Agreement are true and correct on and as of the date
hereof with the same force and effect as if made on and as of the date hereof;
and (c) no Default or Event of Default has occurred and is continuing or exists
under the Agreement as of the date hereof.
5. Except as modified hereby, all of the terms and conditions of
the Agreement, and any amendments thereto, shall remain in full force and
effect, and Borrower's liabilities and obligations thereunder are hereby
acknowledged, ratified and affirmed.
6. All the terms used herein which are defined in the Agreement
shall have the same meanings as used therein, unless the context clearly
requires otherwise.
7. Borrower is responsible for all costs incurred by Bank,
including, without limit, reasonable attorney fees, with regard to the
preparation and execution of this Amendment. Borrower agrees to pay the Bank a
Loan Fee of Five Thousand Dollars ($5,000).
8. This Amendment will be governed by and construed in accordance
with the internal laws of the State of Michigan. The parties hereto select the
state and federal courts of appropriate jurisdiction in the State of Michigan as
the sole proper forums having jurisdiction over all disputes arising from or in
connection with this Amendment or the Agreement. The parties hereto consent to
be subject to personal jurisdiction of the courts located in the State of
Michigan with respect to any such dispute.
9. The execution of this Amendment shall not be deemed to be a
waiver of any Default or Event of Default, except the Existing Defaults.
10. Borrower hereby waives, discharges, and forever releases Bank,
Bank's employees, officers, directors, attorneys, stockholders and successors
and assigns, from and of any and all claims, causes of action, allegations or
assertions that Borrower has or may have had at any time up through and
including the date of this Amendment, against any or all of the foregoing,
regardless of whether any such claims, causes of action, allegations or
assertions are known to Borrower or whether any such claims, causes of action,
allegations or assertions arose as a result of Bank's actions or omissions in
connection with the Agreement, or any amendments, extensions or modifications
thereto, or Bank's administration of debt evidenced by the Agreement or
otherwise.
WITNESS the due execution hereof on the day and year first above
written.
COMERICA BANK RIVIERA TOOL COMPANY
By /s/ Xxxxxx X. Xxxxxxxxxxx By /s/ Xxxxxxx X. Xxxxx
------------------------- --------------------
Its: Vice President Its: President
EXHIBIT A
LINE OF CREDIT NOTE
$10,000,000 Grand Rapids, Michigan
November 24, 2003
FOR VALUE RECEIVED, on or before the Termination Date, RIVIERA TOOL
COMPANY, a Michigan corporation ("Company"), promises to pay to the order of
COMERICA BANK, a Michigan banking corporation (herein called "Bank") at its Main
Office at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, in lawful money of the United
States of America, the indebtedness or so much of the sum of Ten Million Dollars
($10,000,000) as may from time to time have been advanced and then be
outstanding hereunder pursuant to the Line of Credit and Term Loan Agreement
dated December 23, 2002, made by and between Company and Bank (herein called
"Agreement"), together with interest thereon as hereinafter set forth.
Capitalized terms used herein and not defined to the contrary have
meanings given them in the Agreement.
Interest on the unpaid balance of Loans from time to time outstanding,
shall be payable to the extent then accrued, at the Applicable Interest Rate
determined under, as and when provided in the Agreement. Interest shall be
computed on the basis of a 360 day year and assessed for the actual number of
days elapsed, and in such computation effect shall be given to any change in the
Prime-based Rate or the Applicable Margin on the date of any change in the Prime
Rate or Applicable Margin.
From and after the occurrence of any Event of Default, the indebtedness
outstanding hereunder shall bear interest as provided in Section 2.12 of the
Agreement, which interest shall be payable on demand.
This Note is a note under which advances, repayments and re-advances
may be made from time to time, subject to the terms and conditions of the
Agreement. This Note evidences borrowing under, is subject to, may be prepaid in
accordance with, and may be matured under the terms of the Agreement, to which
reference is hereby made. This Note is secured by the Collateral described in
the Agreement, to which reference is made for, among other things, the
conditions under which this Note may be accelerated.
The undersigned and all accommodation parties, guarantors and indorsers
(i) waive presentment, demand, protest and notice of dishonor, (ii) agree that
no extension or indulgence to the undersigned or release or non-enforcement of
any security, whether with or without notice, shall affect the obligations of
any accommodation party, guarantor or indorser, and (iii) agree to reimburse the
holder of this Note for any and all costs and expenses incurred in collecting or
attempting to collect any and all principal and interest under this Note
(including, but not limited to, court costs and reasonable attorney fees,
whether such costs and expenses are incurred in formal or informal collection
actions, federal bankruptcy proceedings, appellate proceedings, probate
proceedings, or otherwise). Any transferees of, or endorser, guarantor or surety
paying this Note in full shall succeed to all rights of Bank, and Bank shall be
under no further responsibility for the exercise thereof or the loan evidenced
hereby. Nothing herein shall limit any right granted Bank by other instrument or
by law.
COMPANY AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED, AND, AFTER CONSULTING WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL
BENEFIT, WAIVE ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING
THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED HERETO.
All capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Agreement.
This Note amends and restates, but does not extinguish the indebtedness
evidenced by, the Line of Credit Note dated December 23, 2002, in the original
principal amount of $7,500,000.
RIVIERA TOOL COMPANY
By: /s/ Xxxxxxx X. Xxxxx
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Its: President
