EXHIBIT 10(V)
SECOND AMENDMENT TO LOAN DOCUMENTS
This Second Amendment to Loan Documents (this "Second Amendment") is
entered into on the 24th day of September, 2001, to be effective as of August
31, 2001 (the "Effective Date"), by and between FIFTH THIRD BANK, a Michigan
banking corporation, f/k/a Old Kent Bank (the "Bank"), Xxx Xxxxxxxxxx Xxxxxx,
Xxxxx Xxxxxx, Xxxxxxxx 00000, and RIVIERA TOOL COMPANY, a Michigan corporation
("Borrower"), 0000 Xxxxxxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxxxxx 00000.
RECITALS:
A. The Bank and the Borrower are parties to a First Restated Loan
Agreement dated as of August 31, 1999 (the "First Restated Loan Agreement"),
which was amended on June 9, 2000 by a First Amendment to Loan Documents (the
First Restated Loan Agreement, as amended by the First Amendment to Loan
Documents, is referred to in this Second Amendment as the "Existing Loan
Agreement"). Capitalized terms used but not defined in this Second Amendment
shall have the meanings given such terms in the Existing Loan Agreement.
B. Pursuant and subject to the Existing Loan Agreement and the Loan
Documents, the Bank agreed to extend to the Borrower certain credit facilities,
including, but not limited to, a Revolving L/C Loan in the maximum principal
amount of $10,000,000 and a 2000 Equipment L/C Loan in the maximum principal
amount of $1,000,000.
C. The Revolving L/C Loan expired, and the Revolving L/C Loan Note,
which evidences the Revolving L/C Loan, matured, on September 1, 2001. The 2000
Equipment L/C Loan, and the Borrower's ability to obtain advances thereunder,
expired on February 1, 2001, without the Borrower having ever taken any advance
under the 2000 Equipment L/C Loan.
D. The Bank and the Borrower wish to, among other things, (i) extend,
as of the Effective Date, the expiration of the Revolving L/C Loan, and the
maturity of the Revolving L/C Loan Note, to September 1, 2002; (ii) reduce the
maximum availability under the Revolving L/C Loan to $6,500,000; (iii)
acknowledge and confirm the expiration of the 2000 Equipment L/C Loan; and (iv)
amend certain financial covenants made by the Borrower in favor of the Bank in
the Loan Documents.
NOW, THEREFORE, the Bank and the Borrower agree as follows:
1. Definitions. From and after the date of this Second Amendment, each
reference in the Existing Loan Agreement or this Second Amendment to the term
(a) "Loan Agreement" or "Agreement" means the Existing Loan Agreement, as
modified by this Second Amendment, and (b) "Loan Documents" means that term as
it is defined in the Existing Loan Agreement, including, without limitation,
this Second Amendment.
2. Borrowers Agreements and Acknowledgments. The Borrower restates,
affirms and makes, as of the Effective Date, each of the covenants, agreements,
acknowledgments, representations, warranties, waivers and releases contained in
the Loan Documents. Further, except as specifically modified hereby, the
Borrower ratifies and affirms the continuing validity and binding effect of the
Loan Documents and represents and warrants to the Bank that all representations
and warranties contained in each of the Loan Documents are true as of the date
hereof. The Borrower represents and warrants that each balance sheet, statement
of income, statement of retained earnings and statement of changes in financial
position submitted to the Bank present fairly the financial position of the
Borrower as of the date of such statement. No changes having a material adverse
effect upon any obligor for any existing loans by the Bank to the Borrower have
occurred since the date of the most recent of such financial statements.
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3. Restatement of Revolving L/C Loan Terms. Section 3.1(a) of the First
Restated Loan Agreement is amended and restated, effective as of the Effective
Date, as follows:
(a) Revolving L/C Loan
Loan Maximum: $6,500,000.00
Availability: At no time shall the
outstanding balance of the
Revolving L/C Loan exceed
the lesser of (1) the Loan
Maximum, or (2) the sum of
(a) 85% of Eligible
Accounts Receivable plus
(b) the lesser of (i)
$3,000,000 or (ii) 40% of
the Work in Process
Inventory.
Payments: To be repaid in accordance
with the Revolving L/C Loan
Note. All payments shall be
made by automatically
debiting an account
maintained by the Borrower
at the Bank and specified
by the Borrower in writing
to be used for such
purpose.
Interest Rate: Prime Rate, plus one (1)
percentage point (i.e., 100
basis points).
Unused Fee: The Borrower shall pay the
Bank, in arrears, a
quarterly fee in an amount
equal to one-quarter (3)
of one (1) percentage point
(i.e., 25 basis points),
per annum, of the amount by
which $6,500,000.00 exceeds
the average daily
outstanding principal
balance of the Revolving
L/C Loan during each three
month period beginning
September 1, 2001, and
ending August 31, 2002 (the
"Unused Fee").
Maturity: September 1, 2002.
Purpose: General Working Capital.
Notwithstanding anything to the contrary contained in the Loan
Documents, from and after the Effective Date, the Borrower shall not have any
right to convert any interest rate in effect with respect to a Loan to a
different interest rate for such Loan. Without limiting the generality of the
foregoing, the Borrower acknowledges and agrees that, from and after the
Effective Date, and notwithstanding anything to the contrary contained in any
Loan Document, the principal balance of the Revolving L/C Loan shall bear
interest at the Prime Rate, plus one (1) percentage point (i.e., 100 basis
points), and the Borrower shall have no right to elect an interest rate
determined by reference to LIBOR.
4. Amendment Fee. The Borrower shall pay to the Bank, in immediately
available funds, concurrently with the Borrowers execution of this Second
Amendment, an Amendment Fee equal to $50,000, which fee shall be deemed to be
fully-earned and non-refundable upon the Banks delivery to the Borrower of a
counterpart of this Second Amendment executed on behalf of the Bank.
5. Expiration of 2000 Equipment L/C Loan. The Borrower acknowledges and
agrees that the 2000 Equipment L/C Loan expired as of February 1, 2001, and that
the Bank has no obligation to make any advances thereunder.
6. Restatement of Certain Financial Covenants.
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(a) Paragraph 6.8 of the First Restated Loan Agreement is amended and
restated as follows:
Maintain Tangible Net Worth (the applicable amount for each
date of determination being referred to herein as the "Minimum Net
Worth") of not less than: (a) $14,000,000 for the period beginning
September 1, 2001 and ending November 30, 2001; and (b) $13,300,000 for
the period beginning December 1, 2001 and continuing thereafter until
all of the Borrowers indebtedness to the Bank has been repaid in full,
with interest.
(b) Paragraph 6.10 of the First Restated Loan Agreement is amended and
restated as follows:
Maintain a ratio of total Liabilities to Tangible Net Worth of
not more than (a) .6:1 as measured on August 31, 2001; (b) .65:1 as
measured on November 30, 2001 and February 28, 2002; (c) .8:1 as
measured on May 31, 2002; and (d) .75:1 as measured on August 31, 2002
and the last day of each November, February, May and August thereafter.
(c) Paragraph 6.11 of the First Restated Loan Agreement is amended and
restated as follows:
Achieve EBITDA of not less than (a) ($450,000) for the 3
calendar month period ending November 30, 2001; (b) ($50,000) for the 3
calendar month period ending February 28, 2002; (c) $700,000 for the 3
calendar month period ending May 31, 2002; and (d) $1,000,000 for the 3
calendar month period ending August 31, 2002 and for each 3 calendar
month period ending on the last day of each November, February, May and
August thereafter.
7. Autodebit. The Borrower agrees that all payments, fees and other
amounts payable by the Borrower to the Bank, including, without limitation, the
Unused Fee, shall paid by automatically debiting an account maintained by the
Borrower at the Bank and specified by the Borrower in writing to be used for
such purpose.
8. Effect of this Second Amendment. The Loan Documents are hereby
amended as required (and only as required) to give effect to the amendments
expressly provided for in this Second Amendment. Each of the Loan Documents
shall be deemed to have been amended by this Second Amendment as if such Loan
Document had been specifically amended by separate instrument.
9. No other Amendments, etc. Except as expressly set forth above, the
Existing Loan Agreement, each of the Notes, and all of the other Loan Documents
shall remain in full force and effect as originally executed and delivered by
the parties, and are hereby ratified and affirmed by the undersigned.
10. Counterparts. This Second Amendment may be executed in one or more
counterparts, each of which shall be considered an original and all of which
shall constitute the same instrument.
[SIGNATURES APPEAR ON FOLLOWING PAGE; REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
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[SIGNATURE PAGE TO SECOND AMENDMENT TO LOAN DOCUMENTS]
IN WITNESS WHEREOF, the parties have executed this Second Amendment to
Loan Documents as of the day and year first above written.
WITNESSES:
RIVIERA TOOL COMPANY
-----------------------------
By: /s/ Xxxxxxx X. Xxxxx
----------------------------- ---------------------------------
Xxxxxxx X. Xxxxx, President
FIFTH THIRD BANK
-----------------------------
By: /s/ Xxxx Xxxxxxx
----------------------------- ---------------------------------
Xxxx Xxxxxxx, Sr. Vice President
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