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EXHIBIT 10(g)
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CREDIT AGREEMENT
dated April 20, 1988
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R.D.T., INC.
AND
NBD GRAND RAPIDS, N.A.
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TABLE OF CONTENTS
ARTICLE PAGE
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I. DEFINITIONS ................................................. 1
II. WORKING CAPITAL REVOLVING CREDIT ............................ 4
2.1 Loan ................................................... 4
2.2 Use of Proceeds ........................................ 5
2.3 Payment of Working Capital Revolving Credit Note ....... 5
2.4 Interest ............................................... 5
2.5 Arrangement Fee and Commitment Fee ..................... 5
2.6 Facility Fee ........................................... 5
III. FIXED ASSET REVOLVING CREDIT ................................ 6
3.1 Loan ................................................... 6
3.2 Use of Proceeds ........................................ 6
3.3 Payment of Fixed Asset Revolving Credit Note ........... 6
3.4 Interest ............................................... 6
3.5 Commitment Fee ......................................... 7
3.6 Conversion to Term Loan ................................ 7
IV. SECURITY .................................................... 7
V. WARRANTIES AND REPRESENTATIONS .............................. 8
5.1 Corporate Existence and Power .......................... 8
5.2 Subsidiaries ........................................... 8
5.3 Corporate Authority .................................... 8
5.4 Binding Effect ......................................... 9
5.5 Litigation ............................................. 9
5.6 Consents, Etc .......................................... 9
5.7 Taxes .................................................. 9
5.8 Title to Properties .................................... 9
5.9 Financial Condition .................................... 9
5.10 Use of Loan Proceeds ................................... 10
5.11 Other Agreements ....................................... 10
5.12 Employee Retirement Income Security Act ................ 10
VI. COVENANTS ................................................... 11
6.1 Affirmative Covenants ................................. 11
(a) Preservation of Corporate Existence ............... 11
(b) Maintenance and Access to Books and Records ....... 11
(c) Compliance with Laws, Etc ......................... 11
(d) Maintenance of Insurance .......................... 11
(e) Reporting Requirements ............................ 11
6.2 Negative Covenants ..................................... 13
(a) Indebtedness ...................................... 13
(b) Liens ............................................. 13
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ARTICLE PAGE
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(c) Sale or Purchase of Assets; Merger, Etc......... 13
(d) Advances........................................ 14
(e) Tangible Net Worth.............................. 14
(f) Leverage Ratio.................................. 14
(g) Working Capital................................. 14
(h) Dividend Distributions, Etc..................... 14
(i) Conduct of Business; Management................. 15
(j) Repayment of Advances from Riviera.............. 15
VII. CONDITIONS PRECEDENT......................................... 15
7.1 Conditions for Disbursements of Initial Loan............ 15
7.2 Conditions for Disbursement of Each Loan................ 17
VIII. DEFAULT...................................................... 18
8.1 Events of Default....................................... 18
8.2 Remedies................................................ 20
IX. MISCELLANEOUS................................................ 21
9.1 Amendments.............................................. 21
9.2 No Waiver; Cumulative Remedies.......................... 21
9.3 Notices................................................. 21
9.4 Expenses................................................ 22
9.5 Reliance on and Survival of Various Provisions.......... 22
9.6 Successors and Assigns.................................. 22
9.7 Governing Law........................................... 22
9.8 Interest Rate Limitation................................ 22
9.9 Integration and Severability............................ 23
9.10 Table of Contents and Headings.......................... 23
EXHIBITS
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Working Capital Revolving Credit Note A
Fixed Asset Revolving Credit Note B
Term Note C
Permitted Liens, Security Interests and Indebtedness D
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CREDIT AGREEMENT
THIS AGREEMENT is made this 20th day of April, 1988 between R.D.T., INC.,
a Michigan corporation (hereinafter referred to as "Borrower"), having its
principal offices at 3859 Xxxxx X. Xxxxxxx Xxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx
00000 and NBD GRAND RAPIDS, N.A., a National Banking Association, having its
principal offices at 000 Xxxxxx Xxxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000
(hereinafter referred to as the "Bank").
WITNESSETH:
WHEREAS the Borrower desires to obtain revolving bank credits in the
aggregate original principal sum not to exceed $7,900,000 in order to repay
existing indebtedness and to provide funds for the Borrower's corporate
purposes; and
WHEREAS the Bank is willing to establish such credit facilities in favor
of the Borrower on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained the parties hereto agree as follows:
ARTICLE I
Definitions
As used herein, the following terms shall have the following meanings:
"Acceptable Accounts Receivable" shall mean those trade accounts
receivable of the Borrower, valued at the face amount thereof, other than those
accounts receivable that are (a) more than 120 days past due, (b) due from any
Affiliate of the Borrower, except that for periods during which an agreement
pursuant to Section 7.1(j) hereof is in effect, accounts receivable from Motor
Wheel Corporation shall not be excluded by reason of this subsection (b), (c)
subject to any known offset, (d) related to goods or services sold which have
been rejected or with respect to which the amount is in dispute, (e) payable by
any person located outside the United States or Canada, or (f) reasonably
deemed by the Bank to be otherwise unacceptable.
"Acceptable Inventory" shall mean inventory of Borrower, valued at the
lower of cost or market, other than inventory that is (a) not readily saleable
or usable in the business of the Borrower, (b) located outside the United
States or Canada, or (c) reasonably deemed by the Bank to be otherwise
unacceptable.
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"Value of Acceptable Contracts in Progress" shall mean the costs incurred
by the Borrower that, in accordance with generally accepted accounting
principles, are allocable to tool and die projects in progress for which there
are binding purchase orders issued to the Borrower by an automotive
manufacturing company, an accepted supplier thereof, or another manufacturing
company acceptable to the Bank, other than projects (a) for or on behalf of an
Affiliate of the Borrower, except that (i) for periods during which an
agreement pursuant to Section 7.1(j) hereof is in effect, purchase orders from
Motor Wheel Corporation shall not be excluded by reason of this subsection (a)
and (ii) purchase orders from Riviera Plastic Products Company shall not be
excluded hereunder where Riviera Plastic Products Company has a binding
purchase order from its customer for said tooling; (b) which have been rejected
or are in dispute; (c) the accounts receivable with respect to which is payable
by any person located outside the United States or Canada; or (d) that are
reasonably deemed by the Bank to be otherwise unacceptable.
"Affiliate" when used with respect to any person, shall mean (a) any
person which, directly or indirectly, controls or is controlled by or is under
common control with such person; (b) any person owning or controlling 10% or
more of the outstanding voting securities of such person; or (c) any officer or
director of such person. For purposes of this definition, "control" (including
the correlative meanings of the terms "controlled by" and "under common control
with"), with respect to any person, shall mean possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
by contract or otherwise. For purposes of this definition, Motor Wheel
Corporation and Riviera Plastics Products Company shall be considered
Affiliates of the Borrower.
"Borrowing Base" shall mean the sum of (a) 85% of Acceptable Accounts
Receivable; (b) 50% of Acceptable Inventory; and (c) 50% of the Value of
Acceptable Contracts in Progress, but in no event shall this component exceed
$2,000,000.
"Cumulative Net Income" shall mean the net income after taxes of the
Borrower for the period commencing on September l, 1987 through the end of the
most recently completed fiscal year of the Borrower, taken as one accounting
period, all as determined in accordance with generally accepted accounting
principles.
"Current Assets" and "Current Liabilities" shall mean all assets or
liabilities, respectively, which in accordance with generally accepted
accounting principles, should be classified as current assets or current
liabilities, respectively, on a balance sheet.
"Event of Default" shall mean any of the events or conditions described in
Section 8.1.
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"Fixed Asset Revolving Credit Commitment" shall mean the commitment of the
Bank to lend pursuant to Section 3.1.
"generally accepted accounting principles" shall mean generally accepted
accounting principles applied on a basis consistent with that reflected in the
financial statements referred to in Section 5.8.
"Indebtedness" of the Borrower shall mean, as of any date, (a) all
obligations of the Borrower for borrowed money, (b) all obligations which are
secured by any lien or encumbrance existing on property owned by the Borrower
whether or not the obligation secured thereby shall have been assumed by the
Borrower, (c) all obligations as lessee under any lease which, in accordance
with generally accepted accounting principles, is or should be capitalized on
the books of the lessee, (d) the deferred purchase price for goods, property or
services acquired by the Borrower, and all obligations of the Borrower to
purchase goods, property or services where payment therefor is required
regardless of whether or not delivery of such goods or property or the
performance of such services is ever made or tendered, (e) all obligations of
the Borrower to advance funds to, or to purchase property or services from, any
other person in order to maintain the financial condition of the Borrower, (f)
liabilities in respect of unfunded vested benefits under any Plan of the
Borrower, and (g) all obligations of others for which the Borrower is liable,
contingently or otherwise, as obligor, guarantor or in any other capacity, or
in respect of which obligations the Borrower assures a creditor against loss or
agrees to take any action to prevent any such loss (other than endorsements of
negotiable instruments for collection in the ordinary course of business).
"Leverage Ratio" shall mean the ratio of Total Liabilities to Tangible Net
Worth.
"Loan" or "Loans" shall mean any borrowing under Section 2.1 or Section
3.1.
"Notes" shall mean the promissory notes of the Borrower evidencing the
Loans, in substantially the form of Exhibits A, B and C attached hereto, as
amended or modified from time to time together with any promissory note or
notes issued in exchange or replacement therefor. "Note" shall mean any one of
the Notes.
"person" shall include an individual, a corporation, an association, a
partnership, a trust or estate, a joint stock company, an unincorporated
organization, a joint venture, a government (foreign or domestic), and any
agency or political subdivision thereof, or any other entity.
"Plan" shall mean any employee benefit or other plan maintained by the
Borrower for its employees and covered by Title IV of the Employee Retirement
Income Security Act of 1974 ("ERISA"), as amended from time to time or to which
Section 412 of the Internal Revenue Code of 1986, as amended, applies.
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"Prime Rate" shall mean that rate of interest per annum announced by the
Bank from time to time as its prime rate, regardless of the rates of interest,
including the lowest rate of interest, actually charged to any of its
customers. The Prime Rate shall change simultaneously with any change in such
"prime rate."
"Riviera" shall mean Riviera Die and Tool, Inc. (formerly known as New 3,
Inc.), a Michigan corporation, the owner of all of the issued and outstanding
capital stock of the Borrower.
"Tangible Net Worth" shall mean, as of any date, (a) the amount of any
capital stock or similar ownership liability plus (or minus in the case of a
deficit) capital surplus and retained earnings, less (b) the net book value of
all items of the following character which are included in the assets: (i)
goodwill, (ii) organization or experimental expenses, (iii) unamortized debt
discount and expense, (iv) stock discount and expense, (v) patent, trademark,
trade names and copyrights, (vi) treasury stock, (vii) franchises, licenses and
permits, and (viii) other assets which are deemed intangible assets under
generally accepted accounting principles.
"Total Liabilities" shall mean, as of any date, all obligations which are
or should be classified as liabilities on a balance sheet in accordance with
generally accepted accounting principles.
"Working Capital" shall mean, as of any date, the amount, if any, by
which the sum of the Current Assets and the unused available credit under the
Fixed Assets Revolving Credit Commitment exceeds the sum of the Current
Liabilities and the then outstanding principal balance of borrowings under the
Working Capital Revolving Credit Commitment.
"Working Capital Revolving Credit Commitment" shall mean the commitment of
the Bank to lend pursuant to Section 2.1.
ARTICLE II
Working Capital Revolving Credit
2.1 Loan. Subject to all of the terms and conditions hereof, the Bank
agrees to lend to the Borrower from time to time through the third anniversary
date of this Agreement or termination of the Bank's obligation to lend under
this Agreement, whichever is the first to occur, such sums in multiples of
Twenty-Five Thousand Dollars ($25,000.00) as may be requested from time to time
by the Borrower in a manner specified by the Bank, provided that the aggregate
principal amount outstanding at any time pursuant to the provisions of this
Section 2.1 shall not exceed the lesser of Four Million Five Hundred Thousand
Dollars ($4,500,000.00) (the "Working Capital Revolving Credit") or the
Borrowing Base. In the event the principal amount outstanding at any time shall
exceed the lesser of said amounts, the Borrower shall forthwith pay to the Bank
an
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amount sufficient to eliminate such excess. Subject to the terms and conditions
of this Agreement, the Borrower may borrow, prepay pursuant to Section 2.3, and
reborrow under this Section 2.1. Upon the execution of this Agreement, Borrower
shall execute and deliver to the Bank a revolving note in the form of Exhibit A
attached hereto (the "Working Capital Revolving Credit Note"), the terms of
which are incorporated herein by reference. All commitments by the Bank on
behalf of the Borrower by way of instrument certification, letter of credit or
similar device shall be considered loans pursuant to this Section 2.1.
2.2 Use of Proceeds. The proceeds of the loans pursuant to this Article
II shall be used to refinance existing revolving credit debt and to assist with
the working capital needs of the Borrower.
2.3 Payment of Working Capital Revolving Credit Note; Prepayment. Except
as payment of part or all of the principal amount of the loans outstanding
pursuant to this Article II is sooner required to be made under Section 2.1 or
Article VIII hereof, the full principal amount of the loans outstanding under
this Article II and all accrued interest thereon shall be paid by Borrower on
or before the third anniversary date of this Agreement. The Borrower may prepay
all or any part of the indebtedness under Section 2.1 at any time without
penalty provided any prepayment shall be in a multiple of One Thousand Dollars
($1,000.00).
2.4 Interest. Except as provided in Article VIII hereof, the Working
Capital Revolving Credit Note shall bear interest at the annual rate of
three-quarters of one percent (3/4%) over the Prime Rate. Interest shall be
computed daily on the basis of a Three Hundred Sixty (360) day year and shall
be billed to the Borrower monthly based upon the principal balance outstanding
and the actual number of days in the preceding month. Interest shall be due and
payable no later than the first day of each month.
2.5 Arrangement Fee and Commitment Fee. The Borrower agrees to pay to the
Bank upon the execution of this Agreement a one-time, non-refundable loan
arrangement fee of Fifty Thousand Dollars ($50,000.00). The Borrower also
agrees to pay to the Bank a Commitment Fee at a rate equal to three-eighths of
one percent (3/8%) per annum on the average daily unused portion of the Working
Capital Revolving Credit for the period from the date of this Agreement to and
including the third anniversary date of this Agreement, and thereafter until
full payment of the Working Capital Revolving Credit Note. Accrued commitment
fees shall be payable quarterly in arrears on the 1st day of each January,
April, July and October commencing on the first such day after the date of this
Agreement.
2.6 Facility Fee. The Borrower agrees to pay to the Bank a facility fee
at a rate equal to one-eighth of one percent (1/8%) per annum on the Working
Capital Revolving Credit, whether used or
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unused, for the period from the date of this Agreement to and including the
third anniversary date of this Agreement, and thereafter until payment of the
Working Capital Revolving Credit Note. The facility fee shall be payable
quarterly in arrears on the 1st day of each January, April, July and October
commencing on the first such day after the date of this Agreement.
ARTICLE III
Fixed Asset Revolving Credit
3.1 Loan. Subject to all of the terms and conditions hereof, the Bank
agrees to lend to the Borrower from time to time through the first anniversary
date of Agreement or termination of the Bank's obligation to lend under this
Agreement, whichever is the first to occur, such sums in multiples of
Twenty-Five Thousand Dollars ($25,000.00) as may be requested from time to time
by the Borrower in a manner specified by the Bank, provided that the aggregate
principal amount outstanding at any time pursuant to the provisions of this
Section 3.1 shall not exceed Three Million Four Hundred Thousand Dollars
($3,400,000.00). In the event the principal amount outstanding at any time
shall exceed the said amount, the Borrower shall forthwith pay to the Bank an
amount sufficient to eliminate such excess. Subject to the terms and conditions
of this Agreement, the Borrower may borrow, prepay and reborrow under this
Section 3.1. Upon the execution of this Agreement, the Borrower shall execute
and deliver to the Bank a revolving credit note of even date herewith in the
form of Exhibit B attached here (the "Fixed Asset Revolving Credit Note"), the
terms of which are incorporated herein by reference.
3.2 Use of Proceeds. The proceeds of the loans pursuant to this Article
III shall be used to repay existing Indebtedness of the Borrower and to
purchase machinery and equipment.
3.3 Payment of Fixed Asset Revolving Credit Note. Except as payment of
part or all of the principal amount of the loans outstanding is sooner required
under Section 3.1 or Article VIII, the full principal amount of the loans
outstanding under this Article III and all accrued interest thereon shall be
paid by the Borrower on the first anniversary date of this Agreement, at which
time the then outstanding principal balance of the loans under Section 3.1
shall automatically be converted to a term loan pursuant to Section 3.6 below,
whereupon the provisions of Section 3.1 concerning the extensions of loans
shall terminate.
3.4 Interest. Except as provided in Article VIII hereof, the Fixed Asset
Revolving Credit Note shall bear interest at the annual rate of one and
one-quarter percent (1 1/4%) over the Prime Rate. Interest shall be computed
daily on the basis of a Three
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hundred Sixty (360) day year and shall be billed to the Borrower monthly based
upon the principal balance outstanding and the actual number of days in the
preceding month. Interest shall be due and payable no later than the first day
of each month.
3.5 Commitment Fee. The Borrower agrees to pay to the Bank a commitment
fee on the average daily unused portion of the Fixed Asset Revolving Credit
Commitment for the period from the date of this Agreement to and including the
first anniversary date of this Agreement, at a rate equal to three-eighths of
one percent (3/8%) per annum. Accrued commitment fees shall be payable
quarterly in arrears on the 1st day of each January, April, July and October
commencing on the first such day after the date of this Agreement.
3.6 Conversion to Term Loan. Subject to the terms and conditions of this
Agreement, on the first anniversary date of this Agreement, the then
outstanding principal balance of the loans under Section 3.1, up to Three
Million Four Hundred Thousand Dollars ($3,400,000.00), shall automatically be
converted to a five-year term loan (the "Term Loan"). The Term Loan shall be
evidenced by a term note in substantially the form of Exhibit C attached (the
"Term Note"), which shall be executed by the Borrower as of the first
anniversary date of this Agreement and, except as provided in Article VIII
hereof, shall bear interest at a rate of one and one-quarter percent (1 1/4%)
per annum over the Prime Rate. Interest on the Term Note shall be computed
daily on the basis of a Three Hundred Sixty (360) day year and shall be billed
and payable quarterly based upon the principal balance outstanding and the
actual number of days in the preceding quarter. The principal of the Term Note
shall be paid in 20 equal quarterly installments in an amount equal to five
percent (5%) of the original principal balance of the Term Note, commencing on
the first (1st) day of the third (3rd) month after the date of Term Note and
continuing on the first (1st) day of each third (3rd) month thereafter. The
Borrower may prepay the principal portion of the Term Note in whole or in part
at any time and from time to time without penalty only after the first
anniversary date of the Term Note.
ARTICLE IV
Security
The Notes shall be secured by:
4.1 A first and fully perfected security interest in all of the Borrower's
tangible and intangible personal property of any kind or nature, now owned or
hereafter acquired, including without limitation, all accounts receivable,
accounts, contract rights, instruments, chattel paper, general intangibles,
inventory, machinery, equipment, fixtures, leasehold improvements, furnishings,
vehicles, tools and dies, and all additions, substitutions and
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replacements thereto and all proceeds thereof, "which security interest shall be
evidenced by separate Security Agreements (the "Security Agreements") of even
date between the Borrower and the Bank covering the several types of collateral
described above, except that the Bank shall have a second and fully perfected
security interest in those assets of the Borrower listed in Exhibit D
subordinate only to the permitted security interests and permitted indebtedness
of the Borrower identified therein.
4.2 A collateral assignment of a life insurance policy or policies in the
face amount of $2,500,000 insuring the life of Xxxxxxx Xxxxx, which assignment
shall be evidenced by a separate assignment of even date herewith between the
Borrower as the owner of the policy or policies and the Bank. The policy or
policies shall contain an appropriate provision prohibiting borrowing against
the policy.
4.3 The unconditional guaranty of payment by Riviera, which guaranty shall
be evidenced by a separate Guaranty of even date herewith between Riviera and
the Bank (the "Guaranty").
ARTICLE V
Warranties and Representations
The Borrower represents and warrants to the Bank that:
5.1 Corporate Existence and Power. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Michigan and is duly qualified to transact business in each additional
jurisdiction where such qualification is necessary under applicable law. The
Borrower has all requisite corporate power to own its properties and to carry
on its business as now being conducted and as proposed to be conducted, and to
execute and deliver this Agreement and the Notes and to engage in the
transactions contemplated by this Agreement.
5.2 Subsidiaries. The Borrower is a wholly-owned subsidiary of Riviera.
The Borrower owns no shares of stock of any corporation and has no ownership or
other interest in any partnership, joint venture or other legal entity.
5.3 Corporate Authority. The execution, delivery and performance of this
Agreement and the Notes by the Borrower are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action and are not
in contravention of any law, rule or regulation, or any judgment, decree, writ,
injunction, order or award of any arbitrator, court or governmental authority,
or of the terms of the Articles of Incorporation or bylaws of the Borrower, or
of any contract or undertaking to which the Borrower is a party or by which the
Borrower or its property may be bound or affected.
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5.4 Binding Effect. This Agreement is, and the Notes when delivered
hereunder will be, legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws relative to or affecting the enforcement of creditors'
rights generally.
5.5 Litigation. There are no actions, suits or proceedings pending or, to
the best of the Borrower's knowledge, threatened against or affecting the
Borrower before any court, governmental authority, or arbitrator which, if
adversely decided, might result, either individually or collectively, in any
material adverse change in the business, properties, operations or conditions,
financial or otherwise, of the Borrower and, to the best of the Borrower's
knowledge, there is no basis for any such action, suit or proceeding.
5.6 Consents, Etc. No consent, approval or authorization of or
declaration, registration or filing with any governmental authority or any
nongovernmental person or entity, including without limitation any creditor or
stockholder of the Borrower is required on the part of the Borrower in
connection with the execution, delivery and performance of this Agreement and
the Notes or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of this Agreement or the Notes.
5.7 Taxes. The Borrower has filed all tax returns (federal, state and
local) required to be filed and has paid all taxes shown thereon to be due,
including interest and penalties, or has established adequate financial
reserves on its books and records for payment thereof.
5.8 Title to Properties. The Borrower has good and marketable title to,
and a valid indefeasible ownership interest in, all of its respective
properties and assets, free and clear of any lien, charge, security interest or
other encumbrance of any kind, except such liens, charges, security interests
or encumbrances as are listed in Exhibit D attached hereto.
5.9 Financial Condition. The balance sheet of the Borrower and the
statements of income, retained earnings and changes in financial position of
the Borrower for the fiscal year ended August 31, 1987, certified by Xxxxxx,
Xxxxx & Co., independent certified public accountants, and the balance sheet of
the Borrower as of February 29, 1988 and the related statements of income,
retained earnings and changes in financial position for the six-month period
ended February 29, 1988, unaudited but certified as correct by a financial
officer of the Borrower, copies of which have been furnished to the Bank,
fairly present the financial condition of the Borrower as at the date thereof,
and the results of operations of the Borrower for the periods indicated, all in
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accordance with generally accepted accounting principles consistently applied.
There has been no material adverse change in the business, properties,
operations, or condition, financial or otherwise of the Borrower since February
29, 1988.
5.10 Use of Loan Proceeds. None of the proceeds of the loans hereunder
shall be used for the purpose of purchasing or carrying any margin stock as
defined in Regulation U of the Board of Governors of the Federal Reserve
System.
5.11 Other Agreements. The Borrower is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any material contract, agreement or instrument to which the
Borrower is a party or by which the Borrower or its property may be bound or
affected.
5.12 Employee Retirement Income Security Act. The Borrower is in
compliance in all material respects with all applicable provisions of the
Employee Retirement Income Security Act of 1974 (ERISA), as amended, and the
regulations and published interpretations thereunder. Neither a Reportable
Event as set forth in Section 4043 of ERISA or the regulations thereunder
("Reportable Event") nor a prohibited transaction as set forth in Section 406
of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended, has
occurred and is continuing with respect to any employee benefit or other plan
established, maintained, or to which contributions have been made by the
Borrower or any trade or business (whether or not incorporated) which together
with the Borrower would be treated as a single employer under Section 4001 of
ERISA ("ERISA Affiliate") for its employees which is covered by Title IV of
ERISA ("Plan"); no notice of intent to terminate a Plan has been filed nor has
any Plan been terminated; no circumstances exist that constitute grounds under
Section 4042 of ERISA entitling the Pension Benefit Guaranty Corporation (PBGC)
to institute proceedings to terminate, or appoint a trustee to administrate, a
Plan, nor has the PBGC instituted any such proceedings; neither the Borrower
nor any ERISA Affiliate has completely or partially withdrawn under Sections
4201 or 4204 of ERISA from any Plan described in Section 4001(a)(3) of ERISA
which covers employees of the Borrower or any ERISA Affiliate ("Multiemployer
Plan"); and the Borrower and each ERISA Affiliate have met their minimum
funding requirements under ERISA with respect to all of their Plans and the
present value of all Plan assets exceeds the present value of all vested
benefits under each Plan as determined on the most recent valuation date of the
Plan and in accordance with the provisions of ERISA and the regulations
thereunder for calculating the potential liability of the Borrower or any ERISA
Affiliate to the PBGC or the Plan under Title IV of ERISA; and neither the
Borrower nor any ERISA Affiliate has incurred any liability to the PBGC under
ERISA.
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ARTICLE VI
Covenants
6.1 Affirmative Covenants. The Borrower covenants and agrees that until
payment in full of the principal of and accrued interest on the Notes and the
performance of all other obligations of the Borrower under this Agreement,
unless the Bank shall otherwise consent in writing, the Borrower shall:
(a) Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, privileges, licenses, franchises and permits and
qualify and remain qualified as a validly existing corporation in good standing
in each jurisdiction in which such qualification is necessary under applicable
law.
(b) Maintenance of and Access to Books and Records. Maintain and keep
adequate and accurate records and books of account in which complete entries
will be made in accordance with generally accepted accounting principles
consistently applied reflecting all financial transactions of the Borrower.
Permit the Bank or any of its agents or representatives at any reasonable time
and from time to time to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of the Borrower and
to discuss the affairs, finances and accounts of the Borrower with its officers
and employees.
(c) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders of any governmental authority
(such compliance to include, without limitation, paying before the same become
delinquent all taxes, assessments and governmental charges imposed upon it or
upon its property), except to the extent that compliance with any of the
foregoing is then being contested in good faith by appropriate legal
proceedings and with respect to which adequate financial reserves have been
established on the books and records of the Borrower.
(d) Maintenance of Insurance. Maintain insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties similarly situated, payable to the Bank as its
interest may appear, and deliver to the Bank evidence satisfactory to the Bank
that such insurance has been so procured.
(e) Reporting Requirements. Furnish to the Bank the following:
(i) Promptly and in any event within three (3) calendar days after
becoming aware of the occurrence of any Event of Default or any event or
condition which, with notice or lapse of time, or both, would constitute an
Event of Default, a statement of
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the President or chief financial officer of the Borrower setting forth the
details thereof and the action which the Borrower has taken and proposes to
take with respect thereto;
(ii) Promptly after the end of each month and in any event within
ten (10) days thereafter, an aged accounts receivable trial balance as of the
last day of such month.
(iii) Promptly after the end of each month and in any event within
ten (10) days thereafter, a summary of the Borrower's inventory as of the last
day of such month in such detail as the Bank may from time to time request.
(iv) Promptly after the end of each month and in any event within
ten (10) days thereafter, a summary of the Borrower's Value of Acceptable
Contracts in Progress as of the last day of such month in such detail as the
Bank may from time to time request.
(v) As soon as available and in any event within 30 days after the
end of each of the first three quarters of each fiscal year of the Borrower, a
balance sheet of the Borrower as of the end of such quarter, a statement of
income and retained earnings of the Borrower for the period beginning at the
end of the previous fiscal year and ending with the end of such quarter, and a
statement of change in financial position of the Borrower for the portion
of the fiscal year ended with the last day of such quarter, all in reasonable
detail and stating in comparative form the respective figures for the
corresponding date and period in the previous fiscal year, and all prepared in
accordance with generally accepted accounting principles consistently applied.
Each quarterly financial report shall be accompanied by a certificate of the
President or chief financial officer of the Borrower stating that the report
has been prepared in accordance with generally accepted accounting principles
consistently applied and fairly presents the financial condition of the
Borrower as of the date of said balance sheet and of the results of operations
for the year-to-date period then ended and that to the best of his knowledge,
the Borrower has observed and performed each and every covenant and agreement
applicable to it which is contained herein or in any instrument contemplated by
this Agreement to which it is a party, except as specifically indicated.
(vi) As soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, an audited balance sheet of the
Borrower as of the end of such fiscal year and the related audited statements
of income and retained earnings and changes in financial position for such
fiscal year certified to by independent certified public accountants, all in
reasonable detail and stating in comparative form the respective figures for the
corresponding date and period in the prior fiscal year, all prepared in
accordance with generally accepted accounting principles consistently applied
and accompanied by an unqualified
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opinion thereon by independent certified public accountants selected by the
Borrower and acceptable to the Bank. The Borrower shall furnish the Bank with
the certificate described in Section 6.1(d)(v).
(vii) Promptly after the commencement thereof, notice of all
actions, suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, affecting the Borrower
which, if determined adversely to the Borrower, could be in an amount in excess
of $50,000 or otherwise have a material adverse effect on the financial
condition, properties or operations of the Borrower.
(viii) Promptly, such other information respecting the business,
properties or the condition or operations, financial or otherwise, of the
Borrower as the Bank may from time to time reasonably request.
6.2 Negative Covenants. Until payment in full of the principal of and
accrued interest on the Notes and the performance of all other obligations of
the Borrower under this Agreement, the Borrower agrees that, unless the Bank
shall otherwise consent in writing, the Borrower shall not:
(a) Indebtedness. Create, incur, assume, guaranty or suffer to exist
any Indebtedness other than (i) Indebtedness described in the financial
statements referred to in Section 5.8 hereof, without renewal or extension;
(ii) the Loans; and (iii) Indebtedness attributable to permitted sale and
leaseback arrangements described in Exhibit D.
(b) Liens. Create, incur, assume or suffer to exist any liens
(including without limitation any pledge, assignment, mortgage, title retaining
contract, purchase money security interest or other type of security
interest) on or in any of the property, real, personal or mixed, tangible or
intangible, now owned or hereafter acquired by the Borrower other than: (i)
liens described in the financial statements referred to in Section 5.8 hereof
or on Exhibit D hereto; (ii) liens for taxes not delinquent or being contested
in good faith by appropriate proceedings and as to which adequate reserves have
been established on its books and records; and (iii) liens not delinquent
created by statute in connection with workmen's compensation, unemployment
insurance and social security and similar obligations.
(c) Sale or Purchase of Assets; Merger, Etc. Sell, lease, transfer or
otherwise dispose of all or in excess of ten percent (10%) of its assets or
business to any person other than such sales, leases, transfers and
dispositions of assets relating to permitted sale and leaseback arrangements
described in Exhibit D; nor purchase or otherwise acquire all or a substantial
portion of any assets of any person, or all or a substantial
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portion of the shares of stock of or other ownership interest in any other
person, or otherwise acquire any capital stock, obligations or other securities
of, make any capital contribution to, or otherwise invest in, or acquire an
interest in, any person; nor merge or consolidate with any other person; nor
make any substantial change in the nature of its respective businesses; nor
become or remain an obligee with respect to any obligation of any other person
if the obligation of such person would constitute Indebtedness of such person.
(d) Advances. Make, extend or renew any loan or advance to any person
or entity, provided, however, nothing herein shall (i) require the repayment of
any such loans or advances described in the financial statements referred to in
Section 5.8 prior to their scheduled maturity dates other than the repayments
required by Section 7.1(k) hereof or (ii) prohibit any loan or advance of less
than $1,000 to employees of the Borrower provided the total outstanding loans
or advances to any one employee does not exceed $1,000 and the total of such
loans or advances to all its employees does not exceed $50,000.
(e) Tangible Net Worth. Permit or suffer the Tangible Net Worth of
Riviera and the Borrower, determined on a consolidated basis, to be less than
$6,500,000 on the date of this Agreement; to be less than $6,500,000 plus 80%
of the consolidated Cumulative Net Income at any time thereafter; or, in any
event, be less than $7,500,000 at August 31, 1989 or be less than $8,500,000 at
August 31, 1990, and at all times thereafter.
(f) Leverage Ratio. Permit or suffer the Leverage Ratio of Riviera and
the Borrower, determined on a consolidated basis, at any time to be greater
than 1.5 to 1.0.
(g) Working Capital. Permit or suffer the Working Capital of Riviera
and the Borrower, determined on a consolidated basis, to be less than (i)
$3,000,000 between the date of this Agreement and August 31, 1988; (ii)
$3,250,000 between August 31, 1988 and August 31, 1989; (iii) $3,500,000
between August 31, 1989 and August 31, 1990; or (iv) $5,200,000 from and after
August 31, 1990.
(h) Dividend Distributions, Etc. Make, pay, declare or authorize any
dividend, distribution or other payment in respect of any class of its capital
stock (other than dividends, distributions and other such payments to the
extent payable solely in shares of the capital stock of the Borrower), or any
payment in connection with the redemption, purchase, retirement or other
acquisition, directly or indirectly, of any shares of its capital stock, to the
extent that such amounts, in the aggregate, would exceed $150,000 in any one
fiscal year of the Borrower.
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(i) Conduct of Business; Management. No material change will be made
in the manner in which the business of the Borrower is conducted or in the
management of the Borrower.
(j) Repayment of Advance From Riviera. Repay all or any portion of the
$1,900,000 cash advance made to the Borrower by Riviera.
ARTICLE VII
Conditions Precedent
7.1 Conditions for Disbursement of Initial Loan. The obligation of the
Bank to make the initial Loan hereunder is subject to receipt by the Bank, in
form and substance satisfactory to it, of all of the following:
(a) Copy of the Articles of Incorporation and all amendments thereto of
the Borrower and Riviera on file with the Corporation and Securities Bureau of
the Michigan Department of Commerce, certified as of a recent date by such
office and certified as true and correct as of the date of this Agreement by a
duly authorized officer of the Borrower or Riviera, respectively, and a
certificate of recent date of the Director of the Department of Commerce of the
State of Michigan as to the good standing and corporate existence of the
Borrower and Riviera in the State of Michigan.
(b) Copy of the by-laws of the Borrower and Riviera and all amendments
thereto certified as true and correct as of the date of this Agreement by a
duly authorized officer of the Borrower and Riviera, respectively.
(c) All authorizing resolutions and evidence of other corporate action
taken by the Borrower to authorize the execution, delivery and performance by
the Borrower of this Agreement and the Notes and the consummation of the
transactions contemplated hereby, each certified as true and correct as of the
date of this Agreement by a duly authorized officer of the Borrower.
(d) Certificate of Incumbency of the Borrower containing and attesting
to the genuineness of the signatures of those officers authorized to act on
behalf of the Borrower in connection with this Agreement and the Notes, and the
consummation by the Borrower of the transactions contemplated hereby, certified
by a duly authorized officer of the Borrower as true and correct as of the date
of this Agreement.
(e) All authorizing resolutions and evidence of other corporate action
taken by Riviera to authorize the execution, delivery and performance by
Riviera of the Guaranty, certified as true and correct as of the date of this
Agreement by a duly authorized officer of Riviera.
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(f) The Notes, Security Agreements and related financing statements and
collateral assignment of life insurance policies duly executed on behalf of the
Borrower and the Guaranty duly executed on behalf of Riviera.
(g) The favorable written opinion of Xxxxx & Xxxxxx, counsel for the
Borrower, with respect to each of the matters set forth in Sections 5.1,
5.2, 5.3, 5.4, 5.5, 5.6, 5.8, 5.11 and 5.12 of this Agreement and as to such
other matters as the Bank may reasonably request.
(h) Documentary evidence satisfactory to the Bank evidencing, aggregate
capital contributions to Riviera by Motor Wheel Corporation of at least
$4,683,000, including without limitation, fair market value appraisals
acceptable to the Bank to the extent such capital contributions are of tangible
personal property other than cash.
(i) Documentary evidence satisfactory to the Bank evidencing the
existence of a long-term agreement between the Borrower and Motor Wheel
Corporation providing for the supply by the Borrower of tool and die design,
manufacturing and repair work and the purchase by Motor Wheel Corporation of a
minimum number of shop hours per year from the Borrower.
(j) If accounts receivable from Motor Wheel Corporation are to be
considered eligible as Acceptable Accounts Receivable under Article I or
purchase orders from Motor Wheel Corporation are to be considered eligible for
determining the Value of Acceptable Contracts in Progress under Article I, an
Agreement between Motor Wheel Corporation and the Bank providing that until
payment in full of the principal of and accrued interest on the Notes and the
performance of all other obligations of the Borrower under this Agreement,
Motor Wheel Corporation shall not offset any sums it owes to the Borrower
against sums due it by the Borrower.
(k) Documentary evidence that Riviera Holding Company, a Michigan
corporation has, (i) redeemed for $121,000 cash its preferred stock held by
Riviera and (ii) has repaid in cash approximately $68,000 of indebtedness to
Riviera.
(l) Original paid policies of fire and extended coverage hazard
insurance and comprehensive public liability insurance insuring the Borrower
against bodily injury and property damage, and including the Bank as a named
insured as its interest may appear and requiring no less than 30 days' written
notice to the Bank before any material modification or a cancellation or
nonrenewal.
(m) The favorable written opinion of Xxxxx & Xxxxxx, counsel for
Riviera, stating:
(1) Riviera is a corporation duly organized, validly existing and
in good standing under the laws of the State of Michigan and is duly qualified
to transact business in each
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additional jurisdiction where such qualification is necessary under applicable
law. Riviera has all requisite corporate power to own its property and to
carry on its business as now being conducted and as proposed to be conducted,
and to execute and deliver the Guaranty and the other instruments and
agreements related thereto.
(2) The execution, delivery and performance of the Guaranty by
Riviera are within Riviera's corporate powers, have been duly authorized by
all necessary corporate action and are not in contravention of any law, rule or
regulations, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Articles of
Incorporation or by-laws of Riviera, or of any contract or undertaking to which
Riviera is a party or by which Riviera or its property may be bound or
affected.
(3) When delivered, the Guaranty will be the legal, valid and
binding obligation of Riviera enforceable against Riviera in accordance with
its terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relative to or affecting the
enforcement of creditors' rights generally.
(4) There are no actions, suits or proceedings pending or, to the
best of such counsel's knowledge, threatened against or affecting Riviera
before any court, governmental authority, or arbitrator which, if adversely
decided, might result, either individually or collectively, in any material
adverse change in the business, properties, operations or conditions, financial
or otherwise, of Riviera and, to the best of such counsel's knowledge, there is
no basis for any such action, suit or proceeding.
(5) No consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including without limitation any creditor or stockholder of
Riviera is required on the part of Riviera in connection with the execution,
delivery and performance of the Guaranty or the transactions contemplated
thereby or as a condition to the legality, validity or enforceability of the
Guaranty.
(6) Riviera has good and marketable title to, and a valid
indefeasible ownership interest in, all of its respective properties and
assets, free and clear of any lien, charge, security interest or other
encumbrance of any kind, including, without limitation, the machinery and
equipment having an appraised fair market value of approximately $2,783,000
contributed to Riviera by Motor Wheel Corporation.
7.2 Conditions for Disbursement of Each Loan. The obligation of the Bank
to make any Loan (including the initial Loan) is subject to the satisfaction of
all of the following conditions precedent:
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(a) The representations and warranties contained in Article V hereof
shall be true and correct on and as of the date such Loan is made as if such
representations and warranties were made on and as of such date.
(b) The Borrower is in full compliance with all covenants and
agreements to be performed on its part under Article VI hereof.
(c) No Event of Default and no event or condition which might become
such an Event of Default with notice or lapse of time, or both, shall exist or
shall have occurred and be continuing on the date such Loan is made.
The Borrower shall make a certification to the Bank at the time of the
making of each Loan to the effect as set forth in this Section 7.2.
ARTICLE VIII
Default
8.1 Events of Default. The occurrence of any of the following events or
conditions shall be deemed an "Event of Default" hereunder unless waived
pursuant to Section 9.1:
(a) Default in any payment of principal of or interest on the Notes
or any fees or any other amount payable hereunder within five (5) days after
it is due.
(b) The Borrower shall fail to perform or observe any term, covenant or
agreement contained in Article VI hereof.
(c) The Borrower shall fail to perform or observe any term, covenant or
agreement required to be performed or observed on its part contained in this
Agreement or any other document in connection herewith and such failure shall
remain unremedied for ten (10) calendar days after notice thereof shall have
been given to the Borrower by the Bank.
(d) Any representation or warranty made by the Borrower in Article V
hereof or in any other document or certificate furnished by or on behalf of the
Borrower in connection with this Agreement shall prove to have been incorrect
in any material respect when made.
(e) The Borrower shall (i) fail to pay any Indebtedness (other than the
Loans) or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness; or (ii) fail
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to perform or observe any term, covenant, or condition on its part to be
performed or observed under any agreement or instrument relating to any such
Indebtedness, when required to be performed or observed, and such failure shall
not be waived and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such failure to
perform or observe is to accelerate, or permit the acceleration of, with the
giving of notice if required, the maturity of such Indebtedness, or any such
Indebtedness shall be declared due and payable or be required to be prepaid
prior to the stated maturity thereof.
(f) The Borrower (i) shall generally not pay, or shall be unable to
pay, or shall admit in writing its inability to pay its debts as such debts
become due; or (ii) shall make an assignment for the benefit of creditors, or
petition or apply to any tribunal for the appointment of a custodian, receiver,
or trustee for it or for a substantial part of its assets; or (iii) shall
commence any proceeding under any bankruptcy, reorganization,
arrangements, readjustment of debt, dissolution or liquidation law or statute
of any jurisdiction, whether now or hereafter in effect; or (iv) shall have had
any such petition or application filed or any such proceeding commenced against
it in which an order for relief is entered or an adjudication or appointment is
made, and which remains undismissed for a period of sixty (60) days or more; or
(v) shall indicate, by any act or omission, its consent to, approval of, or
acquiescence in any such petition, application, proceeding, or order for relief
or the appointment of a custodian, receiver or trustee for all or any
substantial part of its properties; or (vi) shall suffer any such
custodianship, receivership, or trusteeship to continue undischarged for a
period of sixty (60) days or more.
(g) A judgment or order for the payment of money, which together with
such other judgments or orders exceeds the aggregate amount of $50,000 shall be
rendered against the Borrower and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order and such judgment or
order shall have remained unstayed for a period of 30 consecutive days, or (ii)
for a period of 20 consecutive days such judgment or order shall have remained
unsatisfied and a stay of enforcement thereof, by reason of pending appeal or
otherwise, shall not have been in effect.
(h) Any change in the stock ownership of the Borrower, Riviera or
Riviera Holding Company, other than a change in stock ownership among those
persons who are shareholders of Riviera or Riviera Holding Company as of the
date of this Agreement.
(i) The occurrence of any "Reportable Event," as defined in ERISA,
which could constitute grounds for termination by the PBGC of any Plan
maintained by or on behalf of the Borrower or
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any trade or business (whether or not incorporated) which together with the
Borrower would be treated as a single employer under Section 4001 of ERISA or
for the appointment by the appropriate United States District Court of a
trustee to administer such Plan and such reportable event is not corrected and
such determination is not revoked with thirty (30) days after notice thereof
has been given to the administrator of such Plan or to the Borrower or such
trade or business, as the case may be; or the institution of proceedings by the
PBGC to terminate any such Plan or to appoint a trustee to administer such
Plan; or the appointment of a trustee by the appropriate United States District
Court to administer any such Plan.
(j) The incurrence by Riviera of any indebtedness or liability of any
kind or nature, including without limitation, any indebtedness to trade
creditors, other than indebtedness to the Bank.
(k) The Borrower fails to deliver to the Bank a duly executed
collateral assignment of life insurance policy or policies described in Section
4.2 hereof within thirty (30) days from the date of this Agreement.
8.2 Remedies.
(a) Upon the occurrence and during the continuance of any Event of
Default, the Bank may by notice to the Borrower terminate the Working Capital
Revolving Credit Commitment and the Fixed Asset Revolving Credit Commitment or
declare the outstanding principal of, and accrued interest on, the Notes and
all other amounts due under this Agreement to be immediately due and payable,
or both, whereupon the said commitments shall terminate forthwith and all such
amounts shall become immediately due and payable, or both, as the case may be,
provided that in the case of any event or condition described in Section 8.1(f)
with respect to the Borrower the Working Capital Revolving Credit Commitment
and the Fixed Asset Revolving Credit Commitment shall automatically terminate
forthwith and all such amounts shall automatically become immediately due and
payable without notice and without demand, presentment, protest, diligence,
notice of dishonor or other formality, all of which are hereby expressly
waived. Upon the occurrence and during the continuance of any Event of
Default, the Bank may charge interest on the principal amount outstanding on
the Notes from time to time at a rate of three percent (3%) per annum in excess
of the rate specified in the respective Note or the maximum legal rate,
whichever is lower.
(b) Upon the occurrence and during the continuance of such Event of
Default, the Bank may, in addition to the other remedies provided in this
Section 8.2, enforce its rights either by suit in equity, or by action at law,
or by other appropriate proceedings, whether for the specific performance (to
the extent
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permitted by law) of any covenant or agreement contained in this Agreement, the
Notes, one or more Security Agreements executed in connection herewith or in
aid of the exercise of any power granted in this Agreement, the Notes or the
Security Agreements, and may enforce the payment of the Notes and any of its
other rights available at law or in equity.
(c) Upon the occurrence and during the continuance of any Event of
Default hereunder, the Bank is hereby authorized at any time and from time to
time, without notice to the Borrower (any requirement for such notice being
expressly waived by the Borrower) to set off and apply against any and all of
the obligations of the Borrower now or hereafter existing under this Agreement
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by the Bank to or for
the credit or the account of the Borrower and any property of the Borrower from
time to time in possession of the Bank, regardless of whether or not the Bank
shall have made any demand hereunder and although such obligations may be
contingent and unmatured. The rights of the Bank under this Section 8.2(c) are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) which the Bank may have.
ARTICLE IX
MISCELLANEOUS
9.1 Amendments. No provision of this Agreement may be modified, waived or
amended except by an instrument or instruments signed by the Borrower and the
Bank.
9.2 No Waiver; Cumulative Remedies. No failure or delay on the part of
the Bank in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law. Every right and remedy given by this Agreement or by
applicable law to the Bank may be exercised from time to time as often as may
be deemed expedient by the Bank.
9.3 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered or sent to the Borrower or
the Bank at the addresses set forth below or to such other address as may be
designated by the Borrower or the Bank by written notice to the other party.
All notices, requests, consents and other communications shall be deemed to have
been given when received if hand delivered, or if mailed by certified or
registered mail, postage prepaid, on the first day
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after such mailing, in both cases, addressed to the respective address set
forth below or as may otherwise be designated in accordance herewith.
If to the Borrower: R.D.T., Inc.
3859 Xxxxx X. Xxxxxxx
Xxxxxxxxx, X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: President
If to the Bank: NBD Grand Rapids, N.A.
000 Xxxxxx Xxxxxx, X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
9.4 Expenses. The Borrower agrees to pay and save the Bank harmless from
liability for the payment of the reasonable fees and expenses of the Bank,
including those of its legal counsel, in connection with the preparation,
execution and delivery of this Agreement and the Notes and the consummation of
the transactions contemplated hereby, and in connection with any amendments,
waivers or consents in connection therewith, and all reasonable costs and
expenses of the Bank (including reasonable fees and expenses of counsel) in
connection with any Event of Default or the enforcement of this Agreement or
the Notes.
9.5 Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of the Borrower made herein or in any
certificate or other document delivered pursuant hereto shall be deemed to be
material and to have been relied upon by the Bank, notwithstanding any
investigation heretofore or hereafter made by the Bank or on the Bank's behalf.
9.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided that the Borrower may not, without the prior written consent
of the Bank, assign its rights or obligations hereunder or under any Note and
the Bank shall not be obligated to make any Loan hereunder to any entity other
than the Borrower.
9.7 Governing Law. This Agreement is being executed and delivered and is
intended to be performed in the State of Michigan and shall be construed and
enforced in accordance with, and the rights of the parties shall be governed
by, the laws thereof.
9.8 Interest Rate Limitation. Notwithstanding any provisions of this
Agreement or the Notes, in no event shall the amount of interest paid or agreed
to be paid by the Borrower exceed an amount computed at the highest rate of
interest permissible under applicable law and any interest which so exceeds
such maximum rate of interest shall automatically be applied to the payment of
principal of the Notes outstanding to the extent of such excess.
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9.9 Integration and Severability. This Agreement embodies the entire
agreement and understanding between the Borrower and the Bank, and supersedes
all prior agreements and understandings, relating to the subject matter hereof.
In case any one or more of the obligations of the Borrower under this
Agreement or any Note shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Borrower shall not in any way be affected or impaired
thereby, and such invalidity, illegality or unenforceability in one
jurisdiction shall not affect the validity, legality or enforceability of the
obligations of the Borrower under this Agreement or any Note in any other
jurisdiction. In the event that any of the terms and conditions of this
Agreement conflicts with any of the terms and conditions of one or more of the
Security Agreements, then the provisions of this Agreement shall govern to the
extent of such conflict.
9.10 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of
reference only and shall in no way modify any of the terms or provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the day and year first above written.
R.D.T., INC.
By Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx
Its President
NBD GRAND RAPIDS, N.A.
By Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
Its Second Vice President
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EXHIBIT D
PERMITTED LIENS, SECURITY INTERESTS AND INDEBTEDNESS
1. The properties and assets of the Borrower are subject to the
liens, security interests and encumbrances evidenced by the 48 financing
statements (consisting of 228 pages) identified in the attached financing
statement search dated as of January 27, 1988, as updated as of March 1, 1988
and further updated as of March 25, 1988 performed by the Michigan Department
of State, provided, however:
(a) The security interest represented by financing statement
B856982 filed as of October 17, 1986 by Circle Business Credit, Inc. has been
partially released to reflect that Circle Business Credit, Inc. claims no
security interest in other equipment, inventory, accounts, contract rights,
chattel paper or instruments other than the items specifically enumerated in
the financing statement.
(b) The security interests held by Comerica Bank-Detroit
represented by the following financing statements filed by Comerica Bank-
Detroit or Comerica Bank-Kentwood will be terminated and the related
indebtedness of the Borrower will be paid off in full in connection with the
funding of the first advance hereunder:
B869059 B869060 B754072
B868614 B754343 B750324
B754341 B754073 B516941
B754340 B868615 B392718
B754071 B754342 B102872
B754070
2. During the period beginning with the date of the Credit
Agreement and ending on the first anniversary date thereof, the Borrower may
sell and then lease back the items of machinery and equipment specified below
on the condition that the Fixed Asset Revolving Credit Commitment shall be
reduced by 80% of the total forced liquidation value of all such items of
machinery and equipment sold as set forth below opposite such items, and to the
extent the outstanding principal balance of the Fixed Asset Revolving Credit
Note at the time of such sale exceeds the amount of the reduced Fixed Asset
Revolving Credit Commitment, the Borrower shall prepay the amount of such
excess.
Forced
Machinery and Equipment Liquidation Value
----------------------- -----------------
Cincinnati Milacron Boring Mill
#51-S900M15F-280 $140,000
Xxxxx & Xxxxxxx Wolverine #0000-0000 000,000
Xxxxxx 1000 Ton Press #69280022 250,000
Lucas Boring Mill #30C0202 115,000
Clearing 1200 Ton Press #45-11015 175,000
28
EXHIBIT D
(continued)
3. The Borrower is obligated to purchase but has not yet
purchased from Le Blond Makino Machine Tool Co. the Le Blond Makino Die
Manufacturing System (as described in the attached agreement regarding Motor
Wheel Purchase Order No. C06158 to Le Blond Makino Machine Tool Co. dated April
15, 1988). The Borrower intends to enter into a sale and leaseback
transaction with a third-party lessor with respect to the system.
29
AGREEMENT REGARDING MOTOR WHEEL
PURCHASE ORDER NO. C06158
TO LE BLOND MAKINO MACHINE TOOL CO.
This Agreement ("Agreement") regarding Motor Wheel Purchase Order No.
C06158 to Le Blond Makino Machine Tool Co. ("EDM Purchase Order") is made
this 15th day of April, 1988, by and between Motor Wheel Corporation ("Motor
Wheel") and New 3, Inc. ("New 3").
In consideration of the mutual promises and other consideration
provided for herein, in the Incorporation Agreement dated March 11, 1988 among
Motor Wheel, R.D.T., Inc. and Riviera Holding Corporation and in the other
Related Agreements (as defined in the Incorporation Agreement), the undersigned
agree as follows:
1. The EDM Purchase Order. Attached hereto as Exhibit 1 is a
copy of the EDM Purchase Order, which is dated December 22, 1987. Attached
hereto as Exhibit 2 is a summary, as of March 17, 1988, relating to payments
made by Motor Wheel in relation to the EDM Purchase Order as of that date
($226,891.81) and an estimate of the timing and amounts of remaining payments
to be made under the EDM Purchase Order. Further details regarding the EDM
Purchase Order, including the details regarding deliveries to date to Motor
Wheel under the EDM Purchase Order as well as copies of the correspondence
referred to in the EDM Purchase Order, are and will continue to be made
available by Motor Wheel to New 3. Total payments required under the EDM
Purchase Order are presently estimated to be $579,673.30, plus $4,200.00
shipping, as set forth in Exhibit 2.
2. Sale and Assignment by Motor Wheel. New 3 hereby agrees to
purchase from Motor Wheel, and Motor Wheel hereby agrees to sell and assign to
New 3, all of Motor Wheel's right, title and interest as of the closing under
this Agreement ("Closing") in the
30
die manufacturing system, or any part thereof, which is the subject of the EDM
Purchase Order, and in the EDM Purchase Order itself, including the benefit of
all payments theretofore made by Motor Wheel pursuant to the terms of the EDM
Purchase Order ($226,891.81 as of the closing, see Schedule 2 hereto).
3. Payments by New 3, Inc.
(a) At Closing, New 3, Inc. shall pay to Motor Wheel in cash or
immediately available funds an amount equal to all payments made by Motor Wheel
pursuant to the EDM Purchase Order as of the Closing hereunder, including
shipping, delivery and other related expenses.
(b) New 3, Inc. shall assume any and all of Motor Wheel's duties,
responsibilities and liabilities under the EDM Purchase Order, and forever
indemnify and hold harmless Motor Wheel from any claims by or through seller
under the EDM Purchase Order.
4. Motor Wheel is transferring its right, title and interest as
of the closing under this Agreement ("Closing") in the die manufacturing
system, or any part thereof, which is the subject of the EDM Purchase Order,
and in the EDM Purchase Order itself, as is and where is, without any
representations or warranties of any kind from Motor Wheel, either express or
implied, including any representations or warranties regarding merchantability
or suitability or fitness for any use. Motor Wheel, however, assigns any and
all representations and warranties of which Motor Wheel is or would be the
beneficiary in connection with the EDM Purchase Order, represents that it has
not breached the EDM Purchase Order and agrees that it will cooperate with New
3 in any claims by or on behalf of New 3 relating to such representations and
warranties, or otherwise relating in any way to the EDM Purchase Order.
5. The Closing hereunder shall occur at the earlier of the
following dates: (i) promptly following New 3 arranging certain financing
which it plans to put in place to purchase the
31
equipment covered by the EDM Purchase Order, or (ii) 30 days after the date of
this Agreement as set forth above.
MOTOR WHEEL CORPORATION
By: Xxxxxxx X. Xxxxx
------------------------------
Vice President and Controller
NEW 3, INC.
By: Xxxxxxx X. Xxxxx
------------------------------
President
32
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS AGREEMENT is made this 30th day of January, 1990 between RIVIERA
DIE & TOOL, INC. (formerly known as R.D.T., Inc.), a Michigan corporation, with
offices at 0000 Xxxxxxxxx Xxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000
(hereinafter called the "Borrower") and NBD GRAND RAPIDS, N.A., a National
Banking Association, having its principal offices at 000 Xxxxxx Xxxxxx, X.X.,
Xxxxx Xxxxxx, Xxxxxxxx (hereinafter called the "Bank").
W I T N E S S E T H :
WHEREAS the Borrower and the Bank entered into a Credit Agreement
dated April 20, 1988, as amended by a First Amendment to Credit Agreement dated
August 31, 1988, and a Second Amendment to Credit Agreement dated January 30,
1989 (the "Credit Agreement") by which the Bank has made certain credit
facilities available to the Borrower upon the terms and subject to the
conditions set forth in the Credit Agreement; and
WHEREAS the Borrower has requested an increase in the amount and an
extension of the term of the revolving credit facility described in Article II
of the Credit Agreement; and
WHEREAS the Borrower and the Bank desire to amend certain financial
covenants contained in the Credit Agreement; and
WHEREAS the Bank is willing to increase and extend the revolving
credit facility only upon the terms and subject to the conditions set forth in
the Credit Agreement, as amended by this Third Amendment.
NOW THEREFORE, in consideration of the premises, and the mutual
covenants set forth below, the Borrower and the Bank agree as follows:
1. Amendment to Definitions.
(a) The definition of "Borrowing Base" in Article I of the
Credit Agreement is hereby amended to read as follows:
"'Borrowing Base' shall mean the sum of (a) 85% of Acceptable
Accounts Receivable; (b) 50% of Acceptable Inventory; and (c) 50% of
the Value of Acceptable Contracts in Progress, but in no event shall
this component exceed $5,000,000."
(b) The definition of "Leverage Ratio" in Article I of
the Credit Agreement is hereby amended to read as follows:
33
"'Leverage Ratio' shall mean the ratio of Total Liabilities to
Total Capital Funds."
(c) A new definition of "Total Capital Funds" shall be added
to Article I of the Credit Agreement as follows:
"'Total Capital Funds' shall mean, as of any date, the amount
of any capital stock or similar ownership liability plus (or minus in
the case of a deficit) capital surplus or additional paid-in capital,
retained earnings, debt subordinated in payment to the Loans and
deferred income."
(d) The definition of "Working Capital" in Article I of the
Credit Agreement is hereby amended to read as follows:
"'Working Capital' shall mean, as of any date, the amount, if
any, by which the Current Assets exceeds the sum of Current
Liabilities and the then outstanding principal balance of borrowings
under the Working Capital Revolving Credit Commitment."
2. Amendment to Revolving Credit Facility.
(a) Section 2.1 of the Credit Agreement is hereby amended in its
entirety to read as follows:
"2.1 Loan. Subject to all of the terms and conditions hereof,
the Bank agrees to lend to the Borrower from time to time until
January 31, 1992 or termination of the Bank's commitment to lend
under this Agreement, whichever is the first to occur, such sums in
multiples of Twenty-Five Thousand Dollars ($25,000.00) as may be
requested from time to time by the Borrower in a manner specified by
the Bank, provided that the aggregate principal amount outstanding at
any time pursuant to the provisions of this Section 2.1 shall not
exceed the lesser of Ten Million Dollars ($10,000,000.00) or the
Borrowing Base. In the event the principal amount outstanding at any
time shall exceed the lesser of said amounts, the Borrower shall
forthwith pay to the Bank an amount sufficient to eliminate such
excess. Subject to the terms and conditions of this Agreement, the
Borrower may borrow, prepay pursuant to Section 2.3 and reborrow
under this Section 2.1. Upon the execution of this Agreement,
Borrower shall execute and deliver to the Bank an amended and
restated revolving credit demand note in the form of Exhibit A
attached hereto (the "Revolving Credit Note"), the terms of which
are incorporated herein by reference. All commitments by the Bank on
behalf of the Borrower by way of instrument certification, letter of
credit or similar device shall be considered loans pursuant to this
Section 2.1."
-2-
34
(b) Section 2.3 of the Credit Agreement is hereby
amended in its entirety to read as follows:
"2.3 Payment of Working Capital Revolving Credit
Note; Prepayment. Except as payment of part or all of the
principal amount of the loans outstanding pursuant to this
Article II is sooner required to be made under Section 2.1 or
Article VIII hereof, the full principal amount of the loans
outstanding under this Article II and all accrued interest
thereon shall be paid by Borrower on or before January 31,
1992. The Borrower may prepay all or any part of the
indebtedness under Section 2.1 at any time without penalty
provided any prepayment shall be in a multiple of One Thousand
Dollars ($1,000.00)."
3. Amendment to Certain Negative Covenants.
(a) Section 6.2(e) of the Credit Agreement is hereby
amended in its entirety to read as follows:
"(e) Tangible Net Worth. Permit or suffer the
Tangible Net Worth of Riviera and the Borrower, determined on
a consolidated basis, to be less than $7,000,000 plus 80% of
the consolidated Cumulative Net Income at any time after
August 31, 1989; or, in any event, be less than $8,000,000 at
August 31, 1990 and at all times thereafter."
(b) Section 6.2(f) of the Credit Agreement is hereby
amended in its entirety to read as follows:
"(f) Leverage Ratio. Permit or suffer the
Leverage Ratio of Riviera and the Borrower, determined on a
consolidated basis, at any time to be greater than 1.75 to
1.0."
(c) Section 6.2(g) of the Credit Agreement is hereby
amended in its entirety to read as follows:
"(g) Working Capital. Permit or suffer the
Working Capital of Riviera and the Borrower, determined on a
consolidated basis, to be less than (i) $4,200,000 between
August 31, 1989 and August 31, 1990; or (ii) $5,000,000 from
and after August 31, 1990."
-3-
35
4. No Waiver of Default. The execution of this Third Amendment to
Credit Agreement by the Bank does not represent or constitute a waiver by the
Bank of any default or event of default by the Borrower under the Credit
Agreement.
5. Ratification of Credit Agreement. Except as specifically provided
herein, the terms and conditions of the Credit Agreement, as previously
amended, shall remain in full force and effect and are hereby ratified and
confirmed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to Credit Agreement to be executed and delivered on the day and year
first written above.
RIVIERA DIE & TOOL, INC., a
Michigan corporation
By Xxxxxxx X. Xxxxx
-----------------------------
Its President
NBD GRAND RAPIDS, N.A.,
a National Banking Association
By Xxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxx
Its Second Vice President
-4-
36
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT ("Fourth Amendment") is made this 16th day of
May, 1991, between RIVIERA DIE & TOOL, INC. (formerly known as R.D.T., Inc.), a
Michigan corporation, with offices at 0000 Xxxxxxxxx Xxxxx, X.X., Xxxxx Xxxxxx,
Xxxxxxxx 00000 (hereinafter called the "Borrower") and NBD BANK, N.A.
(formerly known as NBD Grand Rapids, N.A.), a National Banking Association,
having offices at 000 Xxxxxx Xxxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000
(hereinafter called the "Bank").
W I T N E S S E T H :
WHEREAS the Borrower and the Bank entered into a Credit Agreement
dated April 20, 1988, as amended by a First Amendment to Credit Agreement dated
August 31, 1988, a Second Amendment to Credit Agreement dated January 30, 1989,
and a Third Amendment to Credit Agreement dated January 30, 1990 (the "Credit
Agreement") by which the Bank has made certain credit facilities available to
the Borrower upon the terms and subject to the conditions set forth in the
Credit Agreement; and
WHEREAS the Borrower has requested an extension of the term of the
revolving credit facility described in Article II and an increase in the
amount and an extension of the term of the term loan described in Article III
of the Credit Agreement; and
WHEREAS the Borrower and the Bank desire to amend certain financial
covenants contained in the Credit Agreement; and
WHEREAS the Bank is willing to extend the term of the revolving credit
facility and to increase the amount and to extend the term of the term loan
only upon the terms and subject to the conditions set forth in the Credit
Agreement, as amended by this Fourth Amendment.
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants set forth below, the Borrower and the Bank agree as follows:
1. Amendment to Definitions.
(a) The definition of "Borrowing Base" in Article I of
the Credit Agreement is hereby amended in its entirety to read as follows:
"'Borrowing Base' shall mean the sum of (a)
eighty-five percent (85%) of Acceptable Accounts Receivable;
(b) forty percent (40%) of Acceptable Inventory, but in no
event shall this component exceed $400,000; and (c) fifty
percent
37
(50%) of the Value of Acceptable Contracts in Progress, but in
no event shall this component exceed $5,000,000."
(b) The definition of "Notes" in Article I of the
Credit Agreement is hereby amended in its entirety to read as follows:
" 'Notes' shall mean the Working Capital Revolving
Credit Note and the Term Note, as amended, modified or
restated from time to time together with any promissory note
or notes issued in exchange or replacement thereof. 'Note'
shall mean one of the Notes."
(c) A new definition of "Term Note" shall be
added to Article I of the Credit Agreement as follows:
" 'Term Note' shall mean the note executed by the
Borrower payable to the order of the Bank to evidence the loan
pursuant to Article III hereof, as the same may be modified,
amended or restated from time to time after execution and
delivery thereof, together with any promissory note issued in
exchange or replacement thereof."
(d) A new definition of "Working Capital
Revolving Credit Note" shall be added to Article II of the Credit Agreement as
follows:
" 'Working Capital Revolving Credit Note, shall mean
the note executed by the Borrower payable to the order of the
Bank to evidence the loans pursuant to Article II hereof, as
the same may be modified, amended or restated from time to time
after execution and delivery thereof, together with any
promissory note issued in exchange or replacement thereof."
2. Amendment to Working Capital Revolving Credit
Facility.
(a) Section 2.1 of the Credit Agreement is
hereby amended in its entirety to read as follows:
"2.1 Loan. Subject to all of the terms and
conditions hereof, the Bank agrees to lend to the Borrower
from time to time until January 31, 1993 or termination of the
Bank's commitment to lend under this Agreement, whichever is
the first to occur, such sums in multiples of Twenty-Five
-2-
38
Thousand Dollars ($25,000.00) as may be requested from time to time by
the Borrower in a manner specified by the Bank, provided that the
aggregate principal amount outstanding at any time pursuant to the
provisions of this Section 2.1 shall not exceed the lesser of Ten
Million Dollars ($10,000,000.00) or the Borrowing Base. In the event
the principal amount outstanding at any time shall exceed the lesser
of said amounts, the Borrower shall forthwith pay to the Bank an
amount sufficient to eliminate such excess. Subject to the terms and
conditions of this Agreement, the Borrower may borrow, prepay pursuant
to Section 2.3 and reborrow under this Section 2.1. Upon the
execution of this Agreement, Borrower shall execute and deliver to the
Bank an amended and restated working capital revolving credit note in
the form of Exhibit A attached hereto the ("Working Capital
Revolving Credit Note"), the terms of which are incorporated herein
by reference. All commitments by the Bank on behalf of the Borrower
by way of instrument certification, letter of credit or similar device
shall be considered loans pursuant to this Section 2.1."
(b) Section 2.3 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"2.3 Payment of Working Capital Revolving Credit Note; Prepayment.
Except as payment of part or all of the principal amount of the
loans outstanding pursuant to this Article II is sooner required to be
made under Section 2.1 or Article VIII hereof, the full principal
amount of the loans outstanding under this Article II and all
accrued interest thereon shall be paid by Borrower on or before
January 31, 1993. The Borrower may prepay all or any part of the
indebtedness under Section 2.1 at any time without penalty provided
any prepayment shall be in a multiple of One Thousand Dollars
($1,000.00)."
3. Amendment to Article III.
Article III of the Credit Agreement is hereby amended in its entirety
to read as follows:
-3-
39
"ARTICLE III
Term Loan
3.1 Loan. Subject to all of the terms and conditions
hereof, the Bank agrees to lend to the Borrower on the date of this
Fourth Amendment the principal sum equal to the lesser of (i) Four
Million Dollars ($4,000,000.00) and (ii) an amount equal to the sum
of seventy-five percent (75%) of the forced sale value, as determined
by an appraiser acceptable to the Bank, of machinery and equipment
owned by the Borrower, excluding fixtures and leasehold improvements,
that is acceptable to the Bank and in which the Bank has a perfected
first security interest or other security interest acceptable to the
Bank in its sole discretion, which loan shall be evidenced by a term
note of such date executed and delivered to the Bank in the form of
Exhibit B attached hereto ('Term Note'), the terms of which are
incorporated herein by reference. If the principal amount outstanding
under this Section 3.1 exceeds the lesser of said amounts as of the
date of this Fourth Amendment, the Borrower shall forthwith pay to the
Bank an amount sufficient to eliminate such excess.
If the amount determined under subparagraph (ii) above is less
than Four Million Dollars ($4,000,000.00) on the date of this Fourth
Amendment and the Bank lends a sum less than Four Million Dollars
($4,000,000.00) to the Borrower under this Section 3.1 on the date of
this Fourth Amendment, the Bank agrees, subject to all of the terms
and conditions of this Agreement, to lend to the Borrower during the
period beginning on the date of this Fourth Amendment and ending
September 15, 1991, an amount up to seventy-five percent (75%) of the
forced sale value, as determined by an appraiser acceptable to the
Bank, of additional machinery and equipment purchased by the Borrower
that is acceptable to the Bank and in which the Bank has a perfected
first security interest or other security interest acceptable to the
Bank in its sole discretion, as the Borrower purchases such additional
items of machinery and equipment, provided that such additional items
of machinery and equipment are not substitutes or replacements of
existing items of machinery and equipment owned by the Borrower. Each
request for
-4-
40
such additional borrowing hereunder shall be made in a manner
specified from time to time by the Bank and shall be accompanied by
invoices or, other supporting documentation acceptable to the Bank
evidencing the additional machinery and equipment purchased by the
Borrower.
In addition, if the amount determined under subparagraph (ii)
above is less than Four Million Dollars ($4,000,000.00) on the date of
this Fourth Amendment and during the period beginning on the date of
this Fourth Amendment and ending August 31, 1991, the Borrower
presents to the Bank another appraisal that is acceptable to the Bank
in its sole discretion, of the machinery and equipment of the Borrower
described in subparagraph (ii) above, the Bank agrees, subject to all
of the terms and conditions of this Agreement, to lend to the Borrower
through September 15, 1991, an additional amount equal to the
difference between the amount determined under the formula described
in subparagraph (ii) above using the new appraisal and the total
amount previously advanced to the Borrower under this Section 3.1.
In no event shall the Bank lend to the Borrower under this
Section 3.1 a total principal amount greater than $4,000,000.00 and
in no event shall the Bank lend sums to the Borrower under this
Section 3.1 after September 15, 1991. The Borrower may not borrow,
repay and reborrow under this Section. 3.1.
3.2 Use of Proceeds. The proceeds of the loan pursuant
to this Article III shall be used to repay the Borrower's existing
term loan from the Bank and to reduce the outstanding principal
balance of the Working Capital Revolving Credit Note.
3.3 Payment of Term Note; Prepayment. Except as payment
of part or all of the Term Note is sooner required under Section 3.1
or Article VIII, the principal of the Term Note shall be paid in eight
(8) equal quarterly installments of Two Hundred Thousand Dollars
($200,000.00) each on the first day of each January, April, July and
October, commencing July 1, 1992 and continuing thereafter up to and
including April 1, 1994 and a final payment on May 1, 1994 consisting
of the entire remaining outstanding principal balance of,
-5-
41
all accrued interest on, and all other sums due under the Term Note.
The Borrower may prepay at any time all or any portion of the Term
Note without premium or penalty provided that any prepayments shall be
applied to principal last maturing.
3.4 Interest. Except as provided in Article VIII hereof,
the Term Note shall bear interest at the annual rate of the Prime Rate
plus one and one-quarter percent (1-1/4%). Interest shall be computed
daily on the basis of a Three Hundred Sixty (360) day year and shall
be billed to the Borrower monthly based upon the principal balance
outstanding and the actual number of days elapsed. Interest shall be
billed to the Borrower monthly beginning June 1, 1991 and shall be due
and payable as indicated by such billing. Xxxxxxxx may estimate a
rate and balance for periods between the billing date and the end of
the period which is covered by such billing and if actual rates or
balances vary from the estimate, actual charges shall be adjusted and
reflected in subsequent xxxxxxxx."
4. Amendment to Affirmative Covenants.
(a) Section 6.1(e)(v) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(v) Promptly after the end of each month but in any event not
later than twenty-five (25) days thereafter, a balance sheet of the
Borrower as of the end of such month, and statements of income,
retained earnings and cash flow of the Borrower for the period
beginning at the end of the previous fiscal year and ending with the
end of such month, all in reasonable detail and stating in comparative
form the respective figures for the corresponding date and period in
the previous fiscal year, all prepared in accordance with generally
accepted accounting principles consistently applied. Each monthly
financial report shall be accompanied by a certificate of the
President or chief financial officer of the Borrower stating that the
report has been prepared in accordance with generally accepted
accounting principles consistently applied and fairly presents the
financial condition of the Borrower as of the date of said balance
sheet and the results of operations for the year-to-date period then
ended and that to the best of his knowledge,
-6-
42
except as specifically otherwise indicated, the Borrower has observed
and performed each and every covenant and agreement applicable to it
which is contained herein or in any instrument or agreement
contemplated by this Agreement to which the Borrower is a party."
(a) A new Section 6.1(e)(ix) is hereby added to the
Credit Agreement as follows:
"(ix) Promptly after the end of each month but in any event
not later than ten (10) days thereafter, a borrowing base certificate
signed by the President or chief financial officer of the Borrower in
the form and detail requested by the Bank stating the amount of the
components of the Borrowing Base as of the last day of the month. The
Borrower represents and warrants to the Bank that the Bank may rely,
in determining which accounts receivable are Acceptable Accounts
Receivable, which inventory is Acceptable Inventory and which
contracts in progress are Acceptable Contracts in Progress, on all
written statements and representations of the Borrower with respect
to any account receivable, inventory item or tool and die project in
progress and, unless otherwise indicated in writing to the Bank, that
(1) every account balance evidenced by an account receivable is in
fact owing; (2) every account receivable is valid and enforceable
without performance of any other act by the Borrower; (3) there are no
known setoffs, counterclaims or defenses against any account
receivable or any fact, event or occurrence known by the Borrower or
any officer thereof which impairs the validity of enforceability
thereof; (4) every item of inventory is stated at the lower of cost or
market and is readily saleable or usable in the course of the
Borrower's business; (5) for every tool and die projects in progress
included in the Borrowing Base there is a valid, binding purchase
order issued to the Borrower by an automotive manufacturing company,
accepted supplier thereof or other manufacturing company whose
identity has been disclosed to and is acceptable to the Bank for
purposes of including in the Borrowing Base; and (6) all costs
allocated to a tool and die projects in progress included in the
Borrowing Base are actual costs incurred by the Borrower that are
allocable to the particular project in
-7-
43
accordance with generally accepted accounting principles."
5. Amendment to Negative Covenants.
(a) Section 6.2(e) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(e) Tangible Net Worth. Permit or suffer Tangible Net Worth
of Riviera and the Borrower, determined on a consolidated basis, to be
less than: $7,300,000.00 an or at any time after the date of this
Fourth Amendment; $7,600,000.00 on or at any time after August 31,
1991; $8,300,000.00 on or at any time after August 31, 1992; or
$9,250,000.00 on or at any time after August 31, 1993."
(b) section 6.2(f) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(f) Leverage Ratio. Permit or suffer the Leverage
Ratio of Riviera and the Borrower, determined on a consolidated basis,
to be greater than: 2.25 to 1 on or at any time after the date of this
Fourth Amendment; 2.0 to 1 on or at any time after August 31, 1992;
or, 1.75 to 1 on or at any time after August 31, 1993."
(c) Section 6.2(g) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(g) Working Capital. Permit or suffer the Working Capital of
Riviera and the Borrower, determined on a consolidated basis, to be
less than: $4,500,000.00 on or at any time after the date of this
Fourth Amendment; $5,000,000.00 on or at any time after August 31,
1992, or $5,500,000.00 on or at any time after August 31, 1993."
6. No Waiver. The execution of this Fourth Amendment by the Bank
does not represent or constitute a waiver by the Bank of any default or event
of default by the Borrower under the Credit Agreement.
7. Ratification of Credit Agreement. Except as specifically
provided herein, the terms and conditions of the Credit Agreement, as
previously amended, shall remain in full force and effect and are hereby
ratified and confirmed by the parties hereto.
-8-
44
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to Credit Agreement to be executed and delivered on the day and year
first written above.
RIVIERA DIE & TOOL INC., a Michigan
corporation
By Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
Its President
NBD BANK, N.A., a National Banking
Association
By Xxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxx
Its Second Vice President
-9-
45
EIGHTH AMENDMENT TO CREDIT AGREEMENT
THIS EIGHTH AMENDMENT ("Eighth Amendment") is made this 26th day of
July, 1993, between RIVIERA DIE & TOOL, INC. (formerly known as R.D.T., Inc.),
a Michigan corporation, with offices at 0000 Xxxxxxxxx Xxxxx X.X., Xxxxx
Xxxxxx, Xxxxxxxx 00000 (hereinafter called the "Borrower") and NBD BANK, N.A.
(formerly known as NBD Grand Rapids, N.A.), a National Banking Association,
having offices at 000 Xxxxxx Xxxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000
(hereinafter called the "Bank").
W I T N E S S E T H:
WHEREAS the Borrower and the Bank entered into a Credit Agreement
dated April 20, 1988, as amended by a First Amendment to Credit Agreement dated
August 31, 1988, a Second Amendment to Credit Agreement dated January 30, 1989,
a Third Amendment to Credit Agreement dated January 30, 1990, a Fourth
Amendment to Credit Agreement dated May 16, 1991, a Fifth Amendment to Credit
Agreement dated July 31, 1992, a Sixth Amendment to Credit Agreement dated
January 31, 1993, and a Seventh Amendment to Credit Agreement dated March 31,
1993 (the "Credit Agreement") by which the Bank has made certain credit
facilities available to the Borrower upon the terms and subject to the
conditions set forth in the Credit Agreement; and
WHEREAS the Borrower has requested that the terms of the revolving
credit facility described in Article II of the Credit Agreement be revised; and
WHEREAS the Borrower and the Bank desire to amend certain financial
covenants contained in the Credit Agreement; and
WHEREAS the Bank is willing to revise the terms of the revolving
credit facility only upon the terms and subject to the conditions set forth in
Credit Agreement, as amended by this Eighth Amendment; and
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants set forth below, the Borrower and the Bank agree as follows:
1. Amendment to Definitions.
(a) The definition of "Value of Acceptable Contracts in
Progress" in Article I of the Credit Agreement is hereby amended in its
entirety to read as follows:
"'Value of Acceptable Contracts in Progress' shall mean the
costs incurred by the Borrower that, in accordance with generally
accepted accounting principles, are allocable to tool and die projects
in progress for
46
which there are binding purchase orders issued to the Borrower by an
automotive manufacturing company, an accepted supplier thereof, or
another manufacturing company acceptable to the Bank, other than
projects (a) for or on behalf of an Affiliate of the Borrower, except
that (i) for periods during which an agreement pursuant to Section
7.1(j) hereof is in effect, purchase orders from Motor Wheel
Corporation shall not be excluded by reason of this subsection (a),
and (ii) purchase orders from Riviera Plastic Products Company shall
not be excluded hereunder where Riviera Plastic Products Company has a
binding purchase order from its customer for said tooling; (b) which
have been rejected or are in dispute; (c) the accounts receivable with
respect to which is payable by any person located outside the United
States or Canada; (d) which are Construction Signoff Projects; or (e)
that are reasonably deemed by the Bank to be otherwise unacceptable."
(b) The definition of "Borrowing Base" in Article I of the
Credit Agreement is hereby amended in its entirety by the substitution therefor
of the following:
"'Borrowing Base (General)' shall mean the sum of (a)
eighty-five percent (85%) of Acceptable Accounts Receivable; (b) forty
percent (40%) of Acceptable Inventory, but in no event shall this
component exceed Four Hundred Thousand Dollars ($400,000.00); and (c)
fifty percent (50%) of the Value of Acceptable Contracts in Progress,
but in no event shall this component exceed Five Million Dollars
($5,000,000.00)."
"'Borrowing Base (Construction Signoff)' shall mean
eighty-five percent (85%) of Construction Signoff Amounts."
(c) A new definition of "Construction Signoff" shall be added
to Article I of the Credit Agreement as follows:
"'Construction Signoff' shall mean a document in the form
attached as Exhibit D hereto. Except as otherwise indicated herein,
the term 'Construction Signoff' shall apply to such forms whether or
not as yet executed by Chrysler Corporation."
(d) A new definition of "'Construction Signoff Amounts'" shall
be added to Article I of the Credit Agreement as follows:
"'Construction Signoff Amounts' shall mean unpaid amounts which
Chrysler Corporation pursuant to Purchase Order Financing Riders has
agreed to pay on demand to the Bank and for which Chrysler Corporation
has issued
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47
executed Construction Signoffs in such amounts; provided that,
amounts otherwise included within the term Acceptable Accounts
Receivable shall be excluded from the Construction Signoff Amounts."
(e) A new definition of "Construction Signoff Projects" shall
be added to Article I of the Credit Agreement as follows:
"'Construction Signoff Projects' shall mean those tool and die
projects for which Chrysler Corporation has issued binding purchase
orders coupled with Purchase Order Financing Riders."
(f) The definition of "Loan" or "Loans" in Article I of
the Credit Agreement is hereby amended in its entirety to read as follows:
"'Loan' or 'Loans' shall mean any borrowing under Section 2.1
and its subparagraphs or Section 3.1."
(g) A new definition of "Purchase Order Financing Rider" shall
be added to Article I of the Credit Agreement as follows:
"'Purchaser Order Financing Rider' shall mean a document in
the form attached as Exhibit D hereto, with a Construction Signoff
attached, executed by Chrysler Corporation."
(h) The definition of "Total Capital Funds" in Article I
of the Credit Agreement is hereby amended in its entirety to read as follows:
"'Total Capital Funds' shall mean, as of any date, (a) the
amount of any capital stock or similar ownership liability plus (or
minus in the case of a deficit) capital surplus or additional paid-in
capital, retained earnings, debt subordinated in payment to the Loans
and deferred income; less (b) the net book value of all items of the
following character which are included in the assets: (i) goodwill,
(ii) organization or experimental expenses, (iii) unamortized debt
discount and expense, (iv) stock discount and expense, (v) patent,
trademark, trade names and copyrights, (vi) treasury stock, (vii)
franchises, licenses and permits, (viii) investment in or amounts
receivable from New Leap Corporation and any Affiliates, and (ix)
other assets which are deemed intangible assets under generally
accepted accounting principles."
(i) The definition of "Tangible Net Worth" in Article I
of the Credit Agreement is hereby amended in its entirety to read as follows:
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48
"'Tangible Net Worth' shall mean, as of any date, (a) the
amount of any capital stock or similar ownership liability plus (or
minus in the case of a deficit) capital surplus and retained earnings,
less (b) the net book value of all items of the following character
which are included in the assets: (i) goodwill, (ii) organization or
experimental expenses, (iii) unamortized debt discount and expense,
(iv) stock discount and expense, (v) patent, trademark, trade names
and copyrights, (vi) treasury stock, (vii) franchises, licenses and
permits, (viii) investment in or amounts receivable from New Leap
Corporation and any Affiliates, and (ix) other assets which are
deemed intangible assets under generally accepted accounting
principles."
(j) The definition of "Working Capital Revolving Credit
Commitment" in Article I of the Credit Agreement is hereby amended in its
entirety to read as follows:
"'Working Capital Revolving Credit Commitment' shall mean the
commitment of the Bank to lend pursuant to Section 2.1 and its
subparagraphs."
(k) The definition of "Working Capital Revolving Credit
Note" in Article I of the Credit Agreement is hereby amended in its entirety to
read as follows:
"'Working Capital Revolving Credit Note' shall mean the note
or notes executed by the Borrower payable to the order of the Bank to
evidence the loans pursuant to Article II hereof and its
subparagraphs, as the same may be modified, amended or restated from
time to time after execution and delivery thereof, together with any
promissory note or notes issued in exchange or replacement thereof."
2. Amendment to Revolving Credit Facility.
(a) Section 2.1 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"2.1 Loan. Subject to all of the terms and conditions
hereof, the Bank agrees to lend to the Borrower from time to time
until December 31, 1993, or termination of the Bank's commitment to
lend under this Agreement, whichever is the first to occur, such sums
in multiples of Twenty-Five Thousand Dollars ($25,000.00) as may be
requested from time to time by the Borrower in a manner specified by
the Bank, provided that the aggregate principal amount outstanding at
any time pursuant to the provisions of this Section 2.1 shall not
exceed the aggregate amounts the Bank has agreed to lend under
-4-
49
subparagraphs (a) and (b) of this Section 2.1. In the event the
principal amount outstanding at any time shall exceed said amount, the
Borrower shall forthwith pay to the Bank an amount sufficient to
eliminate such excess. Subject to the terms and conditions of this
Agreement, the Borrower may borrow, prepay pursuant to Section 2.3 and
reborrow under this Section 2.1 and its subparagraphs. Upon the
execution of this Agreement, the Borrower shall execute and deliver
to the Bank two amended and restated revolving credit demand notes in
the forms of Exhibit A and Exhibit B attached hereto (the 'Revolving
Credit Notes'), the terms of which are incorporated herein by
reference. All commitments by the Bank on behalf of the Borrower by
way of instrument certification, letter of credit or similar device
shall be considered loans pursuant to this Section 2.1.
"(a) Working Capital General Revolving Credit Loan. Subject
to all of the terms and conditions hereof, the Bank agrees to lend to
the Borrower in the manner specified in Section 2.1 an aggregate
principal amount which shall not exceed at any time the lesser of Six
Million Five Hundred Thousand Dollars ($6,500,000.00) or the Borrowing
Base (General).
"(b) Working Capital Construction Signoff Revolving Credit
Loan. Subject to all of the terms and conditions hereof, the Bank
agrees to lend to the Borrower in the manner specified in Section 2.1
an aggregate principal amount which shall not exceed at any time the
lesser of Three Million Five Hundred Thousand Dollars ($3,500,000.00)
or the Borrowing Base (Construction Signoff). In the event that the
Bank shall demand and receive from Chrysler Corporation any payments
pursuant to a Purchase Order Financing Rider, the amount of such
payment shall be applied against the Bank's loan to the Borrower
pursuant to this subparagraph (b), in which event any assets as to
which the Bank has assigned its interest to Chrysler Corporation shall
no longer be considered assets of the Borrower for any purposes of
this Credit Agreement, including, without limitation, the definition
or calculation of Current Assets, Leverage Ratio, Tangible Net Worth,
Total Capital Funds, or Working Capital."
(b) Section 2.3 of the Credit Agreement is hereby amended
in its entirety to read as follows:
"2.3 Payment of Working Capital Revolving Credit Note;
Prepayment. Except as payment of part or all of the principal amount
of the loans outstanding pursuant to this Article II is sooner
required to be made under
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50
Section 2.1 or Article VIII hereof, the full principal amount of the
loans outstanding under this Article II and all accrued interest
thereon shall be paid by Borrower on or before December 31, 1993. The
Borrower may prepay all or any part of the indebtedness under Section
2.1 at any time without penalty provided any prepayment shall be in a
multiple of One Thousand Dollars ($1,000.00)."
(c) Section 2.4 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"2.4 Interest. Except as provided in Article VIII hereof, the
Working Capital Revolving Credit Note shall bear interest at the
annual rate of one-and-one-half percent (1-1/2%) over the Prime Rate.
Interest shall be computed daily on the basis of a Three Hundred Sixty
(360) day year and shall be billed to the Borrower monthly based upon
the principal balance outstanding and the actual number of days in the
preceding month. Interest shall be due and payable no later than the
first day of each month."
3. Amendment to Affirmative Covenants.
(a) Section 6.1(e)(iv) of the Credit Agreement is hereby
amended in its entirety to read as follows:
"(iv) Promptly twice monthly after the fifteenth and last days
of each month and in any event within ten (10) days thereafter, a
summary in such detail as the Bank may from time to time request of
the Borrower's: (a) Value of Acceptable Contracts in Progress as of the
last day of such twice-monthly period; and (b) similar information
concerning Construction Signoff Projects in progress."
(b) Section 6.1(e)(ix) of the Credit Agreement is hereby
amended in its entirety to read as follows:
"(ix) Promptly twice monthly after the fifteenth and last
days of each month and in any event within ten (10) days thereafter,
a borrowing base certificate signed by the President or chief
financial officer of the Borrower in the form and detail requested by
the Bank stating the amount of the components of the Borrowing Base
(General) and the Borrowing Base (Construction Signoff) as of the last
day of such twice-monthly period. The Borrower represents and
warrants to the Bank that the Bank may rely, in determining which
accounts receivable are Acceptable Accounts Receivable, which
inventory is Acceptable Inventory and which contracts in progress are
Acceptable Contracts in Progress or Construction Signoff
-6-
51
Projects, on all written statements and representations of the
Borrower with respect to any account receivable, inventory item or
tool and die project in progress and, unless otherwise indicated in
writing to the Bank, that (1) every account balance evidenced by an
account receivable is in fact owing; (2) every account receivable is
valid and enforceable without performance of any other act by the
Borrower; (3) there are no known setoffs, counterclaims or defenses
against any account receivable or any fact, event or occurrence known
by the Borrower or any officer thereof which impairs the validity or
enforceability thereof; (4) every item of inventory is stated at the
lower of cost or market and is readily saleable or usable in the
course of the Borrower's business; (5) for every tool and die project
in progress included in the Borrowing Base (General) or the Borrowing
Base (Construction Signoff) there is a valid, binding purchase order
issued to the Borrower by an automotive manufacturing company,
accepted supplier thereof or other manufacturing company whose
identity has been disclosed to and is acceptable to the Bank for
purposes of including in the Borrowing Base (General) or Borrowing
Base (Construction Signoff); and (6) all costs allocated to a tool and
die project in progress included in the Borrowing Base (General) or
the Borrowing Base (Construction Signoff) are actual costs incurred by
the Borrower that are allocable to the particular project in
accordance with generally accepted accounting principles."
(c) A new Section 6.1(x) is hereby added to the Credit
Agreement as follows:
"(x) Promptly upon receipt, but in any event not later than
ten (10) days thereafter, all new purchase orders from Chrysler
Corporation, all original Purchase Order Financing Riders, and all
original executed Construction Signoffs."
4. Amendment to Negative Covenants:
(a) Section 6.2 (e) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(e) Tangible Net Worth. Permit or suffer the Tangible Net
Worth of Riviera and the Borrower, determined on a consolidated
basis, to be less than Five Million Three Hundred Thousand Dollars
($5,300,000.00) on or at any time after the date of this Eighth
Amendment, or to be less than Six Million Five Hundred Thousand
Dollars ($6,500,000.00) on or at any time after August 31, 1994."
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52
(b) Section 6.2 (f) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(f) Leverage Ratio. Permit or suffer the Leverage Ratio of
Riviera and the Borrower, determined on a consolidated basis, to be
greater than 3 to 1 on or at any time after the date of this Eighth
Amendment, or to be greater than 2.25 to 1 on or at any time after
August 31, 1994."
(c) Section 6.2(g) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(g) Working Capital. Permit or suffer the Working Capital of
Riviera and the Borrower, determined on a consolidated basis, to be
less than Two Hundred Thousand Dollars ($200,000.00) on or at any time
after the date of this Eighth Amendment, or to be less than One
Million Dollars ($1,000,000.00) on or at any time after August 31,
1994."
5. Amendment to Events of Default. A new Section 8.1(1) is hereby
added to the Credit Agreement as follows:
"(1) The failure or refusal by Chrysler Corporation within
ten (10) days after written demand therefor by the Bank to pay to
the Bank all or any part of the Construction Signoff Amounts or to
otherwise honor any of Chrysler Corporation's obligations related to
the Construction Signoff Projects, or the occurrence of any event
involving Chrysler Corporation which if it involved the Borrower would
constitute an Event of Default under Section 8.1(f) hereof."
6. No Waiver. The execution of this Eighth Amendment by the Bank
does not represent or constitute a waiver by the Bank of any default or event
of default by the Borrower under the Credit Agreement.
7. Ratification of Credit Agreement. Except as specifically
provided herein, the terms and conditions of the Credit Agreement, as
previously amended, shall remain in full force and effect and are hereby
ratified and confirmed by the parties hereto.
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53
IN WITNESS WHEREOF, the parties hereto have caused this Eighth
Amendment to Credit Agreement to be executed and delivered on the day and year
first written above.
RIVIERA DIE & TOOL, INC., a Michigan
corporation
By Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
Its President
NBD BANK, N.A., a National Banking
Association
By Xxxxxx X. Xxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxx
Its Vice President
-9-
54
NINTH AMENDMENT TO CREDIT AGREEMENT
THIS NINTH AMENDMENT ("Ninth Amendment") is made this 4th day of March,
1994, between Riviera Die & Tool, Inc. (formerly known as R.D.T., Inc.), a
Michigan corporation, with offices at 0000 Xxxxxxxxx Xxxxx X.X., Xxxxx Xxxxxx,
Xxxxxxxx 00000 (hereinafter called the "Borrower") and NBD Bank, N.A. (formerly
known as NBD Grand Rapids, N.A.), a National Banking Association, having
offices at 000 Xxxxxx Xxxxxx X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000 (hereinafter
called the "Bank"). Capitalized terms used but not defined in this Ninth
Amendment shall have the respective meanings assigned to them in the Credit
Agreement.
RECITALS
A. The Borrower and the Bank entered into a Credit Agreement dated April
20, 1988, as amended by a First Amendment to Credit Agreement dated August 31,
1988, a Second Amendment to Credit Agreement dated January 30, 1989, a Third
Amendment to Credit Agreement dated January 30, 1990, a Fourth Amendment to
Credit Agreement dated May 16, 1991, a Fifth Amendment to Credit Agreement
dated January 31, 1993, a Sixth Amendment to Credit Agreement dated January 31,
1993, a Seventh Amendment to Credit Agreement dated March 31, 1993 and an
Eighth Amendment to Credit Agreement dated July 26, 1993 (collectively, the
"Credit Agreement") by which the Bank has made certain credit facilities
available to the Borrower upon the terms and subject to the conditions set
forth in the Credit Agreement.
B. Pursuant to the Credit Agreement, the Borrower has executed three (3)
promissory notes: (i) the Seventh Amended and Restated Working Capital
Revolving Credit Note No. I (General) in the original principal amount of
$6,500,000.00 dated July 26, 1993 (the "Working Capital Revolving Credit
Note"); and (ii) Seventh Amended and Restated Working Capital Revolving Credit
Note No. II (Construction Signoff) in the original principal amount of
$3,500,000.00 dated July 26, 1993 (the "Working Capital Construction Signoff
Note"); and (iii) a Term Note in the original principal amount of $4,000,000.00
dated May 16, 1991 (the "Term Note"),
C. In connection with the Credit Agreement, Riviera Tool Company
("Riviera") executed and delivered to the Bank a Guaranty dated April 20, 1988,
pursuant to which, among other things, Riviera guarantied all of the Borrower's
obligations (including the Obligations as defined below) to the Bank, whether
then existing or thereafter arising or created (the "Riviera Guaranty").
D. In addition, Xxxxxxx Xxxxx and Riviera Holding Company each executed
and delivered a Guaranty and Continuing Pledge Agreement dated July 26, 1993.
55
E. As of February 9, 1994, there was (i) $6,500,000.00 in principal
indebtedness owing by the Borrower under the Working Capital Revolving Credit
Note; and (ii) $3,500,000.00 in principal indebtedness owing by the Borrower
pursuant to the Working Capital Construction Signoff Note; and (iii)
$1,456,962.00 in principal indebtedness owing by the Borrower pursuant to the
Term Note. These sums, together with accrued but unpaid interest, costs and
expenses (including attorneys' fees), as well as all other present and future
obligations of the Borrower to the Bank arising under or in connection with the
Credit Agreement or any other document executed in connection therewith or
subsequent thereto by the Borrower in favor of the Bank are hereinafter
referred to as the "Obligations".
F. The Borrower and Riviera acknowledge and agree that (i) the Obligations
are due the Bank without setoff, recoupment, defense or counterclaim, in law or
equity, of any nature or kind; (ii) the Obligations are secured by valid,
perfected, indefeasible, enforceable first priority liens and security
interests (except as permitted by Section 5.8 of the Credit Agreement) in favor
of the Bank in, among other things, (a) all of the Borrower's present and
future personal property, including, without limitation, accounts, chattel
paper, general intangibles, documents, instruments, inventory, equipment,
fixtures and all other tangible and intangible personal property and all
proceeds and products thereof, and (b) all of Riviera's present and future
personal property, including, without limitation, accounts, chattel paper,
general intangibles, documents, instruments, inventory, equipment, fixtures
and all other tangible and intangible personal property and all proceeds and
products thereof, and (c) the collateral described in the Continuing Pledge
Agreements dated July 26, 1993. For convenience, all of the collateral
referred to above together with all other collateral described in and/or
granted in connection with any of the loan documents executed by the Borrower
and Riviera (the "Loan Documents"), together with all collateral heretofore,
simultaneously herewith or hereafter granted to the Bank by the Borrower to
secure any of the Borrower's or any other party's present or future obligations
to the Bank, is collectively referred to as the "Collateral".
G. The Borrower, Riviera and the Bank desire to amend the Credit
Agreement as more particularly set forth herein.
NOW, THEREFORE, based on the foregoing Recitals (which are incorporated
herein as agreements, representations, warranties and covenants with respect to
the parties, as the case may be), and in consideration of the terms and
conditions set forth below, the Borrower, Riviera and the Bank agree as
follows:
1. Amendment to Revolving Credit Facility. The introductory paragraph of
Section 2.1 of the Credit Agreement is hereby amended in its entirety to read
as follows:
"2.1 - Loan. Subject to all of the terms and conditions hereof, the
Bank agrees to lend to the Borrower from time to time until
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56
March 31, 1994 or termination of the Bank's commitment to lend under
this Agreement, whichever is first to occur, such sums in multiples of
Twenty-Five Thousand Dollars ($25,000.00) as may be requested from
time to time by the Borrower in a manner specified by the Bank,
provided that the aggregate principal amount outstanding at any time
pursuant to the provisions of this Section 2.1 shall not exceed the
aggregate amounts the Bank has agreed to lend under subparagraphs (a)
and (b) of this Section 2.1. In the event the principal amount
outstanding at any time shall exceed said amount, the Borrower shall
forthwith pay to the Bank an amount sufficient to eliminate such
excess. Subject to the terms and conditions of this Agreement, the
Borrower may borrow, prepay pursuant to Section 2.3 and re-borrow
under this Section 2.1 and its subparagraphs. Upon the execution of
this Agreement, the Borrower shall execute and deliver to the Bank two
(2) Amended and Restated Revolving Credit Demand Notes in the forms of
Exhibit A and Exhibit B attached hereto (the "Revolving Credit
Notes"), the terms of which are incorporated herein by reference. All
commitments by the Bank on behalf of the Borrower by way of instrument
certification, letter of credit or similar device shall be considered
loans pursuant to this Section 2.1.
2. Section 2.3 of the Credit Agreement is hereby amended in its entirety
to read as follows:
"2.3 - Payment of Working Capital Revolving Credit Note; Prepayment.
Except as payment of part or all of the principal amount of the loans
outstanding pursuant to this Article II is sooner required to be made
under Section 2.1 or Article VIII hereof, the full principal amount of
the loans outstanding under this Article II and all accrued interest
thereon shall be paid by Borrower on or before March 31, 1994. The
Borrower may prepay all or any part of the indebtedness under Section
2.1 at any time without penalty provided any prepayment shall be in a
multiple of One Thousand Dollars ($1,000,00)."
3. Article IX of the Credit Agreement is hereby amended to add in its
entirety the following Section 9.11:
"9.11 - Dominion of Funds Agreement. All collections of any nature
and kind, including payments and deposits received by NBD and proceeds
subject to the liens and security interests of NBD, including without
limitation, proceeds realized from the Collateral, will be subject to
a Dominion of Funds Agreement in form and substance acceptable to the
Bank."
The form of the Dominion of Funds Agreement is attached hereto and incorporated
herein as Exhibit C and shall be executed and delivered to the Bank by Borrower
simultaneously with the execution of this Ninth Amendment.
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57
4. Additional Reporting. The Borrower shall provide, pursuant to Section
6.1(e)(viii) promptly by the close of business on Thursday of each week for
the prior week, a collateral activity report in form and substance acceptable
to the Bank.
5. The terms and conditions of the Credit Agreement, the Riviera
Guaranty and the Loan Documents (as previously amended and as amended herein),
remains in full force and effect and is hereby ratified and confirmed by the
parties hereto.
6. All parties executing this Amendment in a representative capacity
warrant that they have the authority to execute this Amendment and legally
bind the entity they represent.
7. As of the date hereof, the Borrower and Riviera represent and warrant
that they are aware of, and possess, no claims or causes of action against the
Bank. Notwithstanding this representation and as further consideration for
the agreements and understandings herein, the Borrower and the Guarantors,
individually, jointly, severally, jointly and severally, each of their
respective employees, agents, executors, successors and assigns, hereby
release the Bank, its officers, directors, employees, agents, attorneys,
affiliates, subsidiaries, successors and assigns, from any liability, claim,
right or cause of action which now exists, or hereafter arises, whether known
or unknown, arising from events occurring prior to and in any way related to
the facts in existence as of the date hereof. By way of example and not
limitation, the foregoing includes any claims in any way related to actions
taken or omitted to be taken by the Bank under the Loan Documents and the
business relationship with the Bank.
8. This Amendment constitutes the entire understanding of the parties
with respect to the subject matter hereof and may only be modified or amended
by a writing signed by the party to be charged. This Amendment is governed by
the internal laws of the State of Michigan (without regard to conflicts of law
principles) and may be executed in counterparts, and facsimile copies of
signatures shall be treated as original signatures for all purposes. If any of
the provisions of this Amendment are in conflict with any applicable statute
or rule of law or are otherwise unenforceable, such offending provision shall
be null and void only to the extent of such conflict or unenforceability and
shall be deemed separate from and shall not invalidate any other provision of
this Amendment and in lieu of such enforceable provision, there shall be
substituted a provision as similar in terms to such unenforceable provision as
may be possible so as to make such provision legal, valid and enforceable.
9. Nothing contained in this Amendment shall be deemed to constitute a
waiver of or shall waive any Events of Default existing as of the date hereof
or any other Event of Default or default which may arise after the date hereof
or any of the Bank's rights or remedies provided in its agreements with any of
the undersigned, including, without limitation, all such rights and remedies
under the Credit Agreement and the Loan Documents,
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58
and those rights and remedies granted by law, all of which rights and remedies
are preserved or remain in full force and effect.
RIVIERA DIE & TOOL, INC.
a Michigan Corporation
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx
Its President
NBD BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxxxxx
Its Second Vice President
ACKNOWLEDGED AND AGREED BY:
RIVIERA TOOL COMPANY
By: Xxxxxxx X. Xxxxx
-------------------------
Its: President
------------------------
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59
EXHIBIT C
DOMINION OF FUNDS AGREEMENT
NBD Bank, N.A.
000 Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx
Second Vice President
Gentlemen:
To secure all of our present and future indebtedness to you whether joint,
joint and several, or several, we have heretofore or simultaneously herewith
delivered to you certain loan and security documents, including, without
limitation, a Credit Agreement dated April 20, 1988 (collectively, as amended
from time to time, the "Loan Agreement") and, among other security agreements,
Security Agreements dated April 20, 1988 (collectively, as amended from time to
time, the "Security Agreements"), all of which Loan Agreement, loan and
security documents and Security Agreements are incorporated herein by reference
and made a part hereof, pursuant to which we have assigned to you, among other
things, all of our present and future accounts, chattel paper, general
intangibles, inventory and equipment (collectively "Accounts Receivable"), as
those terms are defined and described in the Loan Agreement and the Security
Agreements.
You may notify our Customers at any time to the effect that you have a
security interest in the Accounts Receivable, and collect them directly in your
own name. Until such time, we will collect the Accounts Receivable as a
trustee for you under an express trust for your benefit. You may verify any
Accounts Receivable in any manner, and we shall assist you in any manner you
deem necessary. All full or partial payments of any Accounts Receivable made
directly to us or that otherwise come into our possession shall be received by
us under an express trust for your benefit and we will immediately deposit such
collections into the Cash Collateral Account (as hereinafter defined). We will
furnish to you a report listing the name and amounts of all payments delivered
to us. Such reports shall be in form and substance satisfactory to you.
Similarly, any goods which are returned to us by our Customers or which we
otherwise recover shall also be received in trust for you. We shall advise you
promptly of any such returned goods, and unless you instruct us to deliver them
to you, we shall sell them for you, and the Accounts Receivable so created
shall be part of your security. After you have notified any Customer, you
shall have the right, without our participation, approval or notice, to settle
any disputes between such Customer and us directly with the Customer for any
amounts and upon such terms as you consider advisable.
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You shall have authority to endorse in our name any check or similar
instruments payable to us which may come into your hands as payments of or on
the Accounts Receivable. At your option you may collect, xxx for, compromise
and receive in your own name any of the Accounts Receivable assigned to you,
but you shall be under no duty or obligation so to do.
All collections of any nature or kind, including payments and deposits
received by you and proceeds subject to your lien and security interests,
specifically including, without limitation, the proceeds of all of the Accounts
Receivable which you shall receive, shall be deposited into and held by you in
a non-interest bearing account in your name at your bank, NBD Bank, N.A.,
designated "cash collateral account", herein called Cash Collateral Account,
which shall, until all of our present and future obligations and liabilities
(collectively, "Obligations") owed to you are fully paid and satisfied, belong
to and be your property, to be applied to the Obligations if you so elect. All
collections as well as all cash and other items that are to be forwarded to you
pursuant hereto are to be deposited in the Cash Collateral Account and any
proceeds of Accounts Receivable in the form of checks or otherwise that are
mailed directly to us shall be stamped with the stamp you provide us and
immediately taken to be deposited in such account. On the second business day
following a deposit into the Cash Collateral Account such deposit shall, at
your election, be applied to the Obligations provided, however, that any
item(s) returned unpaid shall be charged back to us.
If there is an express conflict between the terms hereof and the terms of
the Loan Agreement, the terms of this agreement shall will govern and control.
Terms not defined herein shall have the meaning set forth in the Loan
Agreement.
Very truly yours,
RIVIERA DIE & TOOL, INC.
By: Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------
Title: President
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Dated: March 4 , 1994
---------------------
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TENTH AMENDMENT TO CREDIT AGREEMENT
AND RESTATED FORBEARANCE AGREEMENT
NBD Bank, N.A., successor by merger to the interests of NBD Grand Rapids,
N.A. ("NBD" or the "Bank"), Riviera Die & Tool, Inc. (formerly known as R.D.T.,
Inc.), a Michigan Corporation (the "Borrower"), and Riviera Tool Company, a
Michigan Corporation ("Riviera"), enter into this Amendment and Restated
Forbearance Agreement (the "Agreement") on the 5th day of May, 1994.
RECITALS
A. The Borrower and the Bank entered into a Credit Agreement dated April
20, 1988, as amended by a First Amendment to Credit Agreement dated August 31,
1988, a Second Amendment to Credit Agreement dated January 30, 1989, a Third
Amendment to Credit Agreement dated January 30, 1990, a Fourth Amendment to
Credit Agreement dated May 16, 1991, a Fifth Amendment to Credit Agreement
dated July 31, 1992, a Sixth Amendment to Credit Agreement dated January 31,
1993, a Seventh Amendment to Credit Agreement dated March 31, 1993, an Eighth
Amendment to Credit Agreement dated July 26, 1993 and a Ninth Amendment to
Credit Agreement dated March 4, 1994 (collectively, the "Credit Agreement") by
which the Bank has made certain credit facilities available to the Borrower
upon the terms and subject to the conditions set forth in the Credit Agreement.
B. Pursuant to the Credit Agreement, the Borrower has executed three
(3) promissory notes: (i) the Eighth Amended and Restated Working Capital
Revolving Credit Note No. I (General) in the original principal amount of
$6,500,000.00 dated March 4, 1994 (the "Working Capital Revolving Credit
Note"); and (ii) the Eighth Amended and Restated Working Capital Revolving
Credit Note No. II (Construction Signoff) in the original principal amount of
$3,500,000.00 dated March 4, 1994 (the "Working Capital Construction Signoff
Note"); and (iii) a Term Note in the original principal amount of $4,000,000.00
dated May 16, 1991 (the "Term Note").
C. In connection with the Credit Agreement, Riviera executed and delivered
to the Bank a Guaranty dated April 20, 1988, pursuant to which, among other
things, Riviera guarantied all of the Borrower's obligations (including the
Obligations as defined below) to the Bank, whether then existing or thereafter
arising or created (the "Riviera Guaranty").
D. In addition, Xxxxxxx Xxxxx ("Xxxxx") and Riviera Holding Company
("Holding"; collectively, Xxxxx and Holding may be hereinafter referred to as
the "Limited Guarantors") each executed and delivered Guaranties and Continuing
Pledge Agreements (the "Limited Guaranty Documents") dated August 4, 1992 and
July 26, 1993.
E. As of April 29, 1994, there was (i) $6,351,571.00 in principal
indebtedness owing by the Borrower under the Working Capital Revolving Credit
Note; and (ii) $3,500,000.00 in principal indebtedness owing by the Borrower
pursuant to the Working Capital Construction Signoff Note; and (iii)
$1,456,962.00 in principal indebtedness owing by the Borrower pursuant
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to the Term Note. These sums, together with accrued but unpaid interest, costs
and expenses (including attorneys' fees), as well as all other present and
future obligations of the Borrower to the Bank, including, but not limited to,
obligations arising under or in connection with the Loan Documents (as defined
below) or any other document executed in connection therewith or subsequent
thereto by the Borrower in favor of the Bank are hereinafter referred to as the
"Obligations".
F. On April 20, 1988, the Borrower executed and delivered to NBD a
Security Agreement (Accounts, General Intangibles and Chattel Paper), a
Security Agreement (Inventory) and a Security Agreement (Equipment), as amended
by a First Amendment to each of the above-described Security Agreements dated
January 30, 1989 (the "Borrower Security Agreements") wherein Borrower granted
to NBD a valid, perfected, indefeasible and enforceable first priority lien and
security interest in favor of the Bank in all of the Borrower's present and
future personal property, including, but not limited to, accounts, chattel
paper, general intangibles, documents, instruments, inventory, equipment,
fixtures and all other tangible and intangible personal property and all
proceeds and products thereof with the exception of certain property described
in Section 5.8 of the Credit Agreement, For convenience, all of the collateral
referred to in the Borrower Security Agreements, together with all other
collateral described in and/or granted in connection with any of the Loan
Documents (as hereinafter defined), together with all collateral heretofore,
simultaneously herewith or hereafter granted to the Bank by the Borrower to
secure any of the Borrower's or any other parties' present or future
obligations to the Bank, is collectively referred to as the "Borrower
Collateral".
G. On April 20, 1988, Riviera executed and delivered to NBD a Security
Agreement (Accounts, General Intangibles and Chattel Paper), a Security
Agreement (Inventory) and a Security Agreement (Equipment) (the "Riviera
Security Agreements") wherein Riviera granted to NBD a valid, perfected,
indefeasible and enforceable first priority lien and security interest in favor
of the Bank in all of the Riviera's present and future personal property,
including, but not limited to, accounts, chattel paper, general intangibles,
documents, instruments, inventory, equipment, fixtures and all other tangible
and intangible personal property and all proceeds and products thereof. For
convenience, all of the collateral referred to in the Riviera Security
Agreements, together with all other collateral described in and/or granted in
connection with any of the Loan Documents (as hereinafter defined), together
with all collateral heretofore, simultaneously herewith or hereafter granted to
the Bank by Riviera to secure any of Riviera's or any other parties' present or
future obligations to the Bank, is collectively referred to as the "Riviera
Collateral".
H. The Borrower and Riviera acknowledge and agree that (i) the Obligations
are due the Bank without setoff, recoupment, defense or counterclaim, in law or
equity, of any nature or kind; (ii) the Obligations are secured by valid,
perfected, indefeasible, enforceable first priority liens and security
interests (except as permitted by Section 5.8 of the
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Credit Agreement) in favor of the Bank in, among other things, (a) all of the
Borrower's present and future personal property, including, without limitation,
accounts, chattel paper, general intangibles, documents, instruments,
inventory, equipment, fixtures and all other tangible and intangible personal
property and all proceeds and products thereof, and (b) all of Riviera's
present and future personal property, including, without limitation, accounts,
chattel paper, general intangibles, documents, instruments, inventory,
equipment, fixtures and all other tangible and intangible personal property and
all proceeds and products thereof, and (c) the collateral described in the
Limited Guaranty Documents. For convenience, the Credit Agreement, the Working
Capital Revolving Credit Note, the Working Capital Construction Signoff Note,
the Term Note (collectively, the "Notes"), the Borrower Security Agreements,
the Riviera Guaranty, the Riviera Security Agreements, the Limited Guaranty
Documents, the Original Forbearance Agreement (as hereafter defined), this
Agreement and any other document executed therewith or subsequent thereto by
the Borrower in favor of the Bank are hereinafter referred to as the "Loan
Documents". For convenience, all of the Borrower Collateral, the Riviera
Collateral and the collateral referenced in the Limited Guaranty Documents
shall hereinafter be referred to as the "Collateral".
I. The Borrower and Riviera reaffirm, ratify, confirm and approve their
obligations and duties under the Loan Documents as modified by this Agreement.
J. Borrower and Riviera, jointly, jointly and severally and severally,
reaffirm, ratify and confirm the liens, assignments and security interests
granted to NBD under the Loan Documents and confirm that any and all collateral
granted to NBD by any party for the purpose of securing repayment of all or any
part of the Borrower's or Riviera's obligations (including the Obligations)
owed to NBD, including, but not limited to the Collateral, shall constitute and
serve as collateral for any and all of the obligations and duties of the
Borrower and Riviera to NBD (including the Obligations), whether now existing
or hereafter arising.
K. Borrower and Riviera each acknowledge that prior to May 1, 1994, there
were defaults under the Loan Documents as follows (collectively, the "Existing
Defaults"):
(1) The Leverage Ratio of Riviera and the Borrower, determined on a
consolidated basis, is greater than 3 to 1 (3.35 to 1 as of
March 31, 1994).
(2) The Working Capital of Riviera and the Borrower,
determined on a consolidated basis, is less than $200,000 (minus
$1,101,729.00 as of March 31, 1994).
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(3) The aggregate principal amount outstanding under the
Working Capital Revolving Credit, has in the past and is
projected to, periodically exceed the Borrowing Base (the
"Deficiency") and the Borrower has reported that it may be unable
to pay down the Obligations or otherwise take such action to
rectify any imbalance that may occur during the Forbearance
Period (as hereinafter defined) until additional outside capital
is obtained.
Borrower and Riviera represent and warrant that, to the best of their
knowledge, after due inquiry and investigation, they are unaware of any other
Events of Default (as defined in the Credit Agreement) or defaults under any of
the Loan Documents or this Agreement or of any event that, with the passage of
time, notice, or both, would become an Event of Default or a default under the
Loan Documents or this Agreement.
L. Borrower and Riviera also acknowledge that based on the Existing
Defaults, NBD has the right, without further notice, to accelerate all of the
Obligations, demand payment in full and enforce its rights under the Loan
Documents and applicable law.
M. The Borrower and Riviera further acknowledge and agree that the actions
taken by the Bank to date are reasonable and appropriate under the
circumstances, are within NBD's rights under the Loan Documents and applicable
law and do not constitute interference with or control over the business
operations of any of the parties hereto.
N. The Borrower and Riviera acknowledge and agree that (i) NBD has fully
performed all of its obligations under the Loan Documents and all other
agreements between NBD and such parties; (ii) any future loans will be made at
NBD's sole and unfettered discretion; and (iii) NBD has not made any
representations of any kind or nature that funding in any amount will continue
or that the Forbearance Period (as defined in Section 1 below) will be extended
beyond November 30, 1994.
O. Borrower, Riviera, and the Bank previously entered into a Forbearance
Agreement on April 14, 1994, effective through April 30, 1994 (the "Original
Forbearance Agreement"). Borrower and Riviera have requested that NBD forbear
from enforcing its rights and remedies under the Loan Documents and applicable
law for an additional period through November 30, 1994, to afford such parties
an opportunity to pursue an infusion of additional equity into the Borrower, to
address the Existing Defaults and attempt to cure, eliminate or mitigate the
Existing Defaults, to improve the operations of Borrower and to take other
steps as are appropriate to return to full compliance with the Loan Documents.
Borrower has represented to the Bank that it will use its best efforts to
acquire a minimum of $3 million in new equity prior to October 31, 1994.
P. Borrower and Riviera have additionally requested that, effective
concurrently with the execution of this Agreement, the Bank consolidate the
Borrower's two current working capital facilities into one facility (the
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65
"Working Capital Facility") and increase the cap on the Working Capital
Facility temporarily from $10 million to $12.5 million to provide Borrower with
additional needed working capital.
Q. Borrower and Riviera have additionally requested that the Bank extend
the May 1, 1994 maturity date on the Term Note until November 30, 1994.
NOW, THEREFORE, based on the foregoing Recitals (which are incorporated in
this Agreement as and shall constitute representations, warranties and
covenants of the respective parties to this Agreement, as the case may be), and
for other good and valuable consideration, the parties hereto agree as follows:
1. FORBEARANCE. Subject to the following conditions precedent in this
Section 1 and subject to the other terms of this Agreement, NBD agrees to
forbear from enforcing its rights and remedies based on the Existing Defaults,
through the earlier of (i) a further or additional default or Event of Default
under the Loan Documents (including a worsening of the Existing Defaults); (ii)
a default or Event of Default under this Agreement; or (iii) November 30, 1994
(the "Forbearance Period"):
(a) Simultaneously with the execution of this Agreement, receipt by
NBD of an executed Tenth Amended and Restated Working Capital Revolving
Credit Note in substantially the form attached hereto as Exhibit 1(a);
(b) Simultaneously with the execution of this Agreement, receipt by NBD
of an executed Amended and Restated Term Note in substantially the form
attached hereto as Exhibit 1(b);
(c) Simultaneously with the execution of this Agreement, receipt by NBD
of an executed copy of the Reaffirmation and Release Agreement in
substantially the form attached hereto as Exhibit 1(c);
(d) Simultaneously with the execution of this Agreement, receipt by
NBD of a fully-executed copy of this Agreement acknowledged by counsel to
the Borrower and Riviera;
(e) Simultaneously with the execution of this Agreement, Borrower shall
make all payments currently due under the Loan Documents.
(f) Simultaneously with the execution of this Agreement, receipt by NBD
of a letter agreement with Motor Wheel Corporation in substantially the
form attached hereto as Exhibit 1(f); and
(g) NBD receives such other additional documentation necessary to carry
out the intent and purposes of this Agreement.
2. BORROWING BASE DEFICIENCY. During the period from May 1, 1994 through
June 30, 1994, the Borrowing Base Deficiency under the Working Capital Facility
shall at no time exceed $150,000 (the "Deficiency Limit")
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on a daily basis. Borrower shall, at all times during this period, use its
best efforts to manage the Borrowing Base Deficiency such that it remains at
the lowest possible number and take any and all reasonable steps necessary to
eliminate the Borrowing Base Deficiency at the earliest possible date.
3. COLLATERAL. As noted in the Recitals, Borrower and Riviera have
granted to NBD a valid, perfected, indefeasible, enforceable first priority
lien and security interest in and to all of their respective personal property
(except as permitted by Section 5.8 of the Credit Agreement). As an
accommodation to the Borrower, NBD, from time to time, has executed and filed
UCC-3 partial releases with respect to certain specific equipment.
Notwithstanding the filing of these partial releases, the Borrower hereby
ratifies and grants to NBD a continuing security interest in all of its
personal property, including such equipment referenced in the UCC-3 partial
releases.
4. AMENDMENTS TO CREDIT AGREEMENT.
(a) DEFINITIONS.
(i) The definition of "Acceptable Accounts Receivable" in Article
I of the Credit Agreement is hereby amended in its entirety to read as
follows:
"'Acceptable Accounts Receivable' shall mean those trade
accounts receivable of the Borrower, valued at the face
amount thereof, other than those accounts receivable that
are (a) more than 120 days past due, (b) due from any
Affiliate of the Borrower, except that for periods during
which an agreement pursuant to Section 7.1(j) hereof is in
effect, accounts receivable from Motor Wheel Corporation
shall not be excluded by reason of this subsection (b), (c)
subject to any known offset, (d) related to goods or
services sold which have been rejected or with respect to
which the amount is in dispute, (e) payable by any person
located outside the United States or Canada, or (f)
reasonably deemed by the Bank to be otherwise acceptable.
Notwithstanding the foregoing, the Bank may, upon request by
the Borrower and at the Bank's sole discretion, allow
inclusion of accounts receivable that are more than 120 days
past due as Acceptable Accounts Receivable (the "Extended
Accounts"). In no event shall borrowing availability based
on the Extended Accounts exceed the aggregate amount of
$750,000.00, or include accounts receivable over 180 days
past due. Additionally, a 1% monthly surcharge shall be
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charged on all borrowings against accounts receivable over
120 days past due included in the Borrowing Base, based on an
average daily balance."
(ii) The definitions of "Borrowing Base (General)" and "Borrowing
Base (Construction Signoff)" in Article I of the Credit Agreement are hereby
deleted and amended in their entireties to read as follows:
"'Borrowing Base' shall mean the sum of (a) eighty-five
percent (85%) of Acceptable Accounts Receivable; (b) forty
percent (40%) of Acceptable Inventory, but in no event shall
this component exceed Four Hundred Thousand Dollars
($400,000.00); (c) fifty percent (50%) of the Value of
Acceptable Contracts in Progress, but in no event shall this
component exceed Five Million Dollars ($5,000,000.00); and
(d) eighty-five percent (85%) of Construction Signoff
Amounts, but in no event shall this component exceed Three
Million Five Hundred Thousand Dollars ($3,500,000.00). It is
understood that advances made in reliance upon Construction
Signoff Amounts pursuant to this subparagraph are not
included when calculating the cap on advances in reliance
upon the Value of Acceptable Contracts in Progress referenced
in subparagraph (c) above."
(iii) The definition of "Loan" or "Loans" in Article I of the Credit
Agreement is hereby amended in its entirety to read as follows:
"'Loan' or 'Loans' shall mean any borrowing under Section
2.1 or Section 3.1."
(iv) The definition of "Value of Acceptable Contracts in Progress"
in Article I of the Credit Agreement is hereby amended in its entirety to read
as follows:
"'Value of Acceptable Contracts in Progress' shall mean the
costs incurred by the Borrower that, in accordance with
generally accepted accounting principles, are allocable to
tool and die projects in progress for which there are binding
purchase orders issued to the Borrower by an automotive
manufacturing company,
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an accepted supplier thereof, or another manufacturing
company acceptable to the Bank, other than projects (a) for
or on behalf of an Affiliate of the Borrower, except that for
periods during which an agreement pursuant to Section 7.1(j)
hereof is in effect, purchase orders from Motor Wheel
Corporation shall not be excluded by reason of this
subsection (a);(b) which have been rejected or are in
dispute;(c) the accounts receivable with respect to which is
payable by any person located outside the United States or
Canada; (d) which are Construction Signoff Projects; or (e)
that are reasonably deemed by the Bank to be otherwise
unacceptable."
(v) The definition of "Working Capital Revolving Credit
Commitment" in Article I of the Credit Agreement shall be deleted and in its
place substituted the following:
"'Working Capital Facility' shall mean the discretionary
lending facility established between the Bank and the
Borrower pursuant to Section 2.1 and the Working Capital
Revolving Credit Note."
(vi) The definition of "Working Capital Revolving Credit Note" in
Article I of the Credit Agreement is hereby amended in its entirety to read
as follows:
"'Working Capital Revolving Credit Note' shall mean the note
executed by the Borrower payable to the order of the Bank to
evidence the loans pursuant to Article II hereof, as the same
may be modified, amended or restated from time to time after
execution and delivery thereof, together with any promissory
note or notes issued in exchange or replacement thereof."
(b) Amendment to Revolving Credit Facility.
Article II of the Credit Agreement is hereby amended in its entirety
to read as follows:
"ARTICLE II
Working Capital Revolving Credit Facility
2.1 Loan. Subject to all of the terms and conditions
hereof, the Bank may, in its sole and unfettered discretion, lend
to the Borrower from time to time through November 30,
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69
1994, such sums in multiples of Twenty-Five Thousand Dollars
($25,000.00) as may be requested from time to time by the
Borrower in a manner specified by the Bank, provided that the
aggregate principal amount outstanding at any time through August
31, 1994, pursuant to the provisions of this Section 2.1 shall
not exceed the lesser of Twelve Million Five Hundred Thousand
Dollars ($12,500,000.00) (the "Working Capital Revolving Credit")
or the Borrowing Base, and that the aggregate principal amount
outstanding at any time between September 1, 1994, and November
30, 1994, pursuant to the provisions of this Section 2.1 shall
not exceed the lesser of Ten Million Dollars ($l0,000,000.00) (the
"Working Capital Revolving Credit") or the Borrowing Base. In the
event the principal amount outstanding at any time shall exceed
said amounts, the Borrower shall forthwith pay to the Bank an
amount sufficient to eliminate such excess. Subject to the terms
and conditions of this Agreement, the Borrower may borrow, prepay
pursuant to Section 2.3, and reborrow under this Section 2.1.
Upon the execution of this Agreement, the Borrower shall execute
and deliver to the Bank a revolving credit demand note in the
form of Exhibit l(a) attached hereto (the "Tenth Amended and
Restated Working Capital Revolving Credit Note"), the terms of
which are incorporated herein by reference. All commitments by
the Bank on behalf of the Borrower by way of instrument
certification, letter of credit or similar device shall be
considered loans pursuant to this Section 2.1.
2.2 Use of Proceeds. The proceeds of the loans pursuant to
this Article II shall be used to refinance existing revolving
credit debt and to assist with the working capital needs of the
Borrower.
2.3 Payment of Working. Capital Revolving Credit Note;
Prepayment. Except as payment of part or all of the principal
amount of the loans outstanding pursuant to this Article II is
sooner required to be made under Section 2.1 or Article VIII
hereof, the full principal amount of the loans outstanding under
this Article II and all accrued interest thereon shall be paid by
Borrower on or before November 30, 1994. The Borrower may prepay
all
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or any part of the indebtedness under Section 2.1 at any time
without penalty provided any prepayment shall be in a multiple of
One Thousand Dollars ($1,000.00).
2.4 Interest. Except as provided in Article VIII hereof,
the Working Capital Revolving Credit Note shall bear interest at
the annual rate of three percent (3%) over the Prime Rate.
Interest shall be computed daily on the basis of a Three Hundred
Sixty (360) day year and shall be billed to the Borrower monthly
based upon the principal balance outstanding and the actual
number of days in the preceding month. Interest shall be due and
payable no later than the first day of each month.
2.5 Availability Fee. The Borrower agrees to pay to the
Bank an Availability Fee at a rate equal to three-eighths of one
percent (3/8%) per annum on the average daily unused portion of
the Working Capital Revolving Credit for the period from the date
of this Agreement to and including November 30, 1994, and
thereafter until full payment of the Tenth Amended and Restated
Working Capital Revolving Credit Note. Accrued availability fees
shall be payable quarterly in arrears on the first day of each
January, April, July and October commencing on the first such day
after the date of this Agreement. It is understood that the
maximum possible Working Capital Revolving Credit is
$12,500,000.00 through August 31, 1994, and $10,000,000.00
thereafter.
2.6 Facility Fee. The Borrower agrees to pay to the Bank a
facility fee at a rate equal to one-eighth of one percent (1/8%)
per annum on the Working Capital Revolving Credit, whether used
or unused, for the period from the date of this Agreement to and
including November 30, 1994, and thereafter until payment of the
Tenth Amended and Restated Working Capital Revolving Credit Note.
The facility fee shall be payable quarterly in arrears on the
first day of each January, April, July and October commencing on
the first such day after the date of this Agreement. It is
understood that the maximum possible Working Capital Revolving
Credit is $12,500,000.00 through August 31, 1994, and
$10,000,000.00 thereafter.
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(c) Amendment to Term Loan.
(i) Section 3.3 of the Credit Agreement is hereby amended in its entirety
as follows:
"3.3 Payment of Term Note; Prepayment. Except as payment of part
or all of the Term Note is sooner required under Section 3.1 or
Article VIII, the principal of the Term Note shall be paid in monthly
installments of $40,000 each on the first day of each month commencing
May 1, 1994, and continuing thereafter up to and including November 1,
1994 and a final payment on November 30, 1994 consisting of the entire
remaining outstanding principal balance of, all accrued interest on,
and all other sums due under the Term Note. The Borrower may prepay at
any time all or any portion of the Term Note without premium or
penalty provided that any prepayments shall be applied to principal
last maturing."
(ii) Section 3.4 of the Credit Agreement is hereby amended to read in its
entirety as follows:
"3.4 Interest. Except as provided in Article VIII hereof, the
Term Note shall bear interest at the annual rate of the Prime Rate
plus three percent (3%). Interest shall be computed daily on the
basis of a Three Hundred Sixty (360) day year and shall be billed to
the Borrower monthly based upon the principal balance outstanding and
the actual number of days elapsed. Interest shall be billed to the
Borrower monthly beginning June 1, 1994 and shall be due and payable
as indicated by such billing. Xxxxxxxx may estimate a rate and
balance for periods between the billing date and the end of the period
which is covered by such billing and if actual rates or balances vary
from the estimate, actual charges shall be adjusted and reflected in
subsequent xxxxxxxx."
(iii) A new Section 3.5 is hereby added to the Credit Agreement as follows:
"3.5 Collateral Value. As soon as practicable, the Borrower
shall deliver to the Bank a list of all equipment securing the Term
Note along with a description of the priority of the Bank's lien in,
and the value of, such
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equipment. Additionally, on or before August 31, 1994, the Borrower
and Riviera shall provide NBD with a new appraisal of all equipment
securing the Term Note."
(d) COVENANTS.
(i) Section 6.1(e)(iv) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(iv) On a weekly basis, a summary in such detail as the Bank may
require of the Borrower's: (a) Value of Acceptable Contracts in
Progress as of the last day of the prior week; (b) similar information
concerning Construction Signoff Projects in progress; (c) an accounts
receivable aging summary; (d) a summary of Chrysler contract executed
sign-offs; (e) a work in progress summary; and (f) a report setting
forth all accounts receivable over 120 days past due along with their
billing dates and a detailed description of any problems or unusual
facts regarding each account. Each of these reports or summaries
shall be accompanied by a certificate of the President or Chief
Financial Officer of the Borrower stating that the report is a fair
and accurate statement of the financial condition of the Borrower."
(ii) Section 6.1(e)(v) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(v) On a monthly basis, a financial statement (including a
balance sheet of the Borrower, a statement of operations, a statement
of cash flows, and a management narrative of the financial statement);
a projected daily cash flow statement covering the next 60 days; a
covenant report; a status report of critical business activities; a
report projecting the daily Borrowing Base over the next 60 days, and
projecting the monthly average Borrowing Base for the following six
months; a written representation by the Borrower that there have been
no material changes in the amount of inventory reported in its daily
Borrowing Base calculation; a statement of income and retained
earnings of the Borrower; and a statement of change in financial
position of the Borrower, all in reasonable detail and stating in
comparative
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form the respective figures for the corresponding date and period in
the previous fiscal year, and all prepared in accordance with
generally accepted accounting principles consistently applied. Each
of these reports shall be accompanied by a certificate of the
President or Chief Financial Officer of the Borrower stating that the
report has been prepared in accordance with generally accepted
accounting principles consistently applied and fairly presents the
financial condition of the Borrower as of the date of said balance
sheet and of the results of operations for the year-to-date period
then ended and that to the best of his knowledge, the Borrower has
observed and performed each and every covenant and agreement
applicable to it which is contained herein or in any instrument
contemplated by this Agreement to which it is a party, except as
specifically indicated."
(iii) Section 6.1(e)(ix) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(ix) No later than 3:00 p.m. on a daily basis, a borrowing base
certificate signed by the President or chief financial officer of the
Borrower in the form and detail requested by the Bank stating the
amount of the components of the Borrowing Base as of the close of
business the prior day. The Borrower represents and warrants to the
Bank that the Bank may rely, in determining which accounts receivable
are Acceptable Accounts Receivable, which inventory is Acceptable
Inventory and which contracts in progress are Acceptable Contracts in
Progress or Construction Signoff Projects, on all written statements
and representations of the Borrower with respect to any account
receivable, inventory item or tool and die project in progress and,
unless otherwise indicated in writing to the Bank, that (1) every
account balance evidenced by an account receivable is in fact owing;
(2) every account receivable is valid and enforceable without
performance of any other act by the Borrower; (3) there are no known
setoffs, counterclaims or defenses against any account receivable or
any fact, event or occurrence known by the Borrower which impairs the
validity or enforceability thereof; (4) every item of inventory is
stated at the lower of
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cost or market and is readily saleable or usable in the course of the
Borrower's business; (5) for every tool and die project in progress
included in the Borrowing Base there is a valid, binding purchase
order issued to the Borrower by an automotive manufacturing company,
accepted supplier thereof or other manufacturing company whose
identity has been disclosed to and is acceptable to the Bank for
purposes of including in the Borrowing Base; and (6) all costs
allocated to a tool and die project in progress included in the
Borrowing Base are actual costs incurred by the Borrower that are
allocable to the particular project in accordance with generally
accepted accounting principles."
(iv) Section 6.2(e) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(v) Tangible Net Worth. Permit or suffer the Tangible Net Worth
of Riviera and the Borrower, determined on a consolidated basis, to be
less than Five Million Three Hundred Thousand Dollars ($5,300,000.00)
on or at any time after the date of the Eighth Amendment to Credit
Agreement, or to be less than Six Million Dollars ($6,000,000.00) on
or at any time after August 31, 1994."
(v) A new Section 6.2(k) is hereby added to the Credit Agreement as
follows:
"(k) Stock. Pledge, hypothecate or otherwise encumber or sell or
otherwise transfer any shares of any class of its capital stock or
make any change in the capital structure of the Borrower, including
issuing any new shares of capital stock, without the prior written
consent of the Bank. Additionally, Riviera shall not pledge,
hypothecate or otherwise encumber or sell or otherwise transfer any
shares of any class of its capital stock or make any change in the
capital structure of the Borrower, including issuing any new shares of
capital stock, without the prior written consent of the Bank."
5. FORBEARANCE FEE. The Borrower shall pay to the Bank a total Forbearance
Fee of $150,000.00. The Forbearance Fee shall be payable in arrears, with
$75,000.00 due on or before August 31, 1994, and $75,000.00 due on or before
October 31, 1994. The October 31, 1994 payment will be
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waived by the Bank if, prior to that date, a minimum of $3 million in new
equity is infused into the Borrower upon terms and conditions reasonably
acceptable to NBD.
6. NEGATIVE COVENANTS. During the Forbearance Period, without the prior
written consent of the Bank, the Borrower and Riviera shall not:
(a) RESTRICTION ON LIENS. Create or permit to be created or allow to
exist any new, additional or expanded lien upon any property or assets now
owned or acquired in the future by the Borrower and Riviera.
(b) RESTRICTION ON INDEBTEDNESS. Create, incur, assume, suffer to
exist, have outstanding or in any manner become liable in respect of any
indebtedness for money other than the Obligations or indebtedness incurred in
the ordinary course of the business of the Borrower for necessary materials and
services.
(c) CAPITAL ASSET EXPENDITURE. Expend sums for the acquisition of
capital assets, including payments under any new lease of real or personal
property.
(d) SALE AND LEASEBACK. Enter into any new agreement providing for the
leasing by the Borrower of property which has been or is to be sold or
transferred by the Borrower or lessor of the property.
(e) TRANSACTIONS WITH AFFILIATES. Enter into, or permit or suffer to
exist, any transaction or arrangement with any Affiliate, except on terms which
are no less favorable to the Borrower than could be obtained from persons who
are not Affiliates in arm's length transactions.
7. FURTHER INPUT.
(a) Borrower shall continue to use its best efforts to arrange a meeting
between representatives of NBD, representatives of Borrower and appropriate
decision-making representatives of Motor Wheel to meet and discuss the future
direction and plans of Borrower prior to the expiration of the Forbearance
Period;
(b) Borrower shall use its best efforts to obtain a written agreement by
Comerica Bank to subordinate any debt and security interest it may have with
Borrower and/or Riviera, in form and substance acceptable to NBD, by June 6,
1994.
(c) Borrower agrees that it will immediately engage a crisis management
consultant for advisory consulting purposes, which consultant must be
acceptable to NBD if NBD, in its sole discretion, requests Borrower retain such
consultant. Borrower agrees that it will, upon such request by NBD, seek and
recommend the immediate approval and engagement of, a crisis management
consultant with management authority, upon board approval and authorization
(which consultant must be acceptable to NBD) and retain such a consultant.
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8. NO FURTHER FORBEARANCE IMPLIED. Borrower and Riviera acknowledge that
NBD has no obligation to continue making advances under the Working Capital
Facility or otherwise or to extend the term of the Forbearance Period or
forbear from enforcing their respective rights and remedies after the
Forbearance Period, and nothing contained herein or otherwise is intended to be
a promise or agreement to make advances under the Working Capital Facility or
otherwise or to extend the terms of the Forbearance Period beyond November 30,
1994. Furthermore, no future agreement by NBD to make advances to the Borrower
or to extend the term of the Forbearance Period beyond November 30, 1994, or
any other agreement, shall be valid or enforceable unless it is contained in a
written agreement signed by NBD.
9. NO OVERDRAFTS. Borrower and Riviera agree that they will not create any
overdrafts in any accounts at NBD. Furthermore, Borrower and Riviera
acknowledge and agree that NBD shall not, under any circumstances, be required
to honor any checks or other items presented to NBD for payment for which there
are insufficient available funds in Borrower's account at NBD for payment and
NBD may return any such items so presented. In the event that such items are
not returned, this shall not create any right or expectation that such
overdrafts will be tolerated or permitted in the future.
10. TAXES. Borrower and Riviera represent that they are paying all taxes
on a timely basis except as set forth on Exhibit 2 attached hereto.
11. EVENTS OF DEFAULT. In addition to any other defaults or Events of
Default contained in any of the Loan Documents, the following shall constitute
an Event of Default under this Agreement and each of the Loan Documents:
(a) any further or additional Events of Default, events of
acceleration or defaults provided for in any of the Loan Documents (including a
worsening of any of the Existing Defaults for any reason other than the impact
of the restructuring transaction between the Borrower and Xxxxxx Financial
Leasing, Inc. and Banc One Leasing Corporation entered into in April of 1994);
(b) if any representation or warranty made by Borrower or Riviera in
this Agreement or in connection with the negotiation hereof is untrue as of the
date made or hereafter becomes untrue;
(c) the Borrower and/or Riviera shall at any time fail to observe,
perform or comply with any Dominion of Funds Agreement with NBD;
(d) the Borrowing Base Deficiency shall at any time exceed the
Deficiency Limit set forth in Paragraph 2 above on any date specified therein;
(e) Any lender, supplier, creditor or lessor shall (i) accelerate any
obligations of the Borrower or Riviera, due to a default by Borrower or Riviera
under any agreement with any creditor in excess of $25,000 to such creditor or
shall otherwise take any action of any kind or nature to enforce
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or begin enforcement of its rights or remedies against Borrower or Riviera by
reason of such default, or (ii) receive from Borrower or Riviera any
prepayments of obligations, any extraordinary payments of outstanding
indebtedness or fees, or fees or interest above the level paid to such creditor
by Borrower or Riviera as of January 1, 1994; and
(f) Any creditor, including, but not limited to, any governmental
taxing authority, shall cause a lien to be filed on any of the Collateral (other
than a lien for taxes not yet due and payable).
12. RELEASE. As of the date hereof, the Borrower and Riviera represent and
warrant that they are aware of, and possess, no claims or causes of action
against the Bank. Notwithstanding this representation and as further
consideration for the agreements and understandings herein, the Borrower and
Riviera, individually, jointly and severally, and on behalf of each of their
respective officers, directors, employees, agents, executors, successors and
assigns, hereby release NBD, its officers, directors, employees, agents,
attorneys, affiliates, subsidiaries, successors and assigns from any liability,
claim, right or cause of action which now exists or hereafter arises, whether
known or unknown, arising from events occurring prior to and in any way related
to facts in existence as of the date hereof. By way of example and not
limitation, the foregoing includes any claims in any way related to actions
taken or omitted to be taken by NBD under the Loan Documents, or this Agreement
and the business relationship with NBD.
13. AUTHORIZATION TO DEBIT ACCOUNT. In the event that any payment called
for by the Loan Documents, this Agreement (or any agreement referred to or
incorporated herein) or any other present or future agreements between NBD and
the Borrower and/or Riviera are not paid when and as called for under the terms
of such agreement, then NBD may debit any of such accounts of the Borrower
and/or Riviera at NBD for such amount. In the event of such a debit, NBD will
use its best efforts to notify the Borrower and/or Riviera of such debit within
two (2) business days. The fact that NBD had debited any of the accounts of
the Borrower and/or Riviera at NBD shall in no way whatsoever waive or diminish
any default for failure to make such payments when and as due.
15. SETOFF. Upon the occurrence of a default, NBD is hereby authorized at
any time and from time to time, without notice to the Borrower or Riviera (any
such notice being expressly waived), to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by NBD to or for the credit or the account
of the Borrower and/or Riviera against any and all of the Obligations, now or
hereafter existing, including those under this Agreement or the Loan Documents
or any of the Notes or any other agreement or instrument, irrespective of
whether or not NBD shall have made any demand under this Agreement or any Note
or otherwise. The Bank agrees to promptly notify the Borrower and/or Riviera
after any such setoff and application provided that the failure to give such
notice shall not affect the validity of such setoff and application and shall
not create any claims or liabilities against NBD. The rights of NBD under this
section shall not
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require maturity of any indebtedness and are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which NBD may
have.
15. VERIFICATION OF ACCOUNTS/AUDITS. The Borrower and Riviera agree that
NBD, through its employees or authorized agents, shall be permitted to send a
letter to and otherwise contact each of its respective account debtors to verify
account receivable balances. In addition, NBD, an accountant or accounting firm
retained by NBD and other advisors, representatives or agents of NBD shall be
permitted full and complete access to the Borrower's and Riviera's facilities
and books and records to conduct audits as often as NBD reasonably desires. The
reasonable cost of such audits ("Audit Fees"), whether conducted by NBD (in
which case NBD shall be entitled to make a reasonable charge, plus out-of-pocket
costs and expenses), an accountant or accounting firm retained by NBD or other
advisors, representatives or agents of NBD (including, but not limited to,
Xxxxxx Enterprises Inc.) shall be part of the Obligations and shall be secured
by all of the Collateral.
16. EXPENSES, FEES AND COSTS; INDEMNIFICATION. The Borrower and Riviera,
jointly and severally, shall be responsible for the payment of all fees and
out-of-pocket disbursements incurred by NBD, including fees of counsel and court
costs, in any way arising from or in connection with this Agreement, any of the
Collateral, any of the Loan Documents, any of the Obligations or the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand, including, without limitation, (a)
Audit Fees; (b) all fees and expenses (including recording fees and insurance
policy fees) of NBD and counsel for NBD for the preparation, examination,
approval, negotiation, execution and delivery of, or the closing of any of the
transactions contemplated by, this Agreement or any of the Loan Documents; (c)
all fees and out-of-pocket disbursements incurred by NBD, including attorneys'
fees and accountants' fees, in any way arising from or in connection with any
action taken by NBD to monitor, advise, administer, enforce or collect any of
the Obligations (including under this Agreement and the Loan Documents) or any
other obligations of the Borrower or Riviera, whether joint, joint and several,
or several, under this Agreement, any of the Loan Documents or any other
existing or future document or agreement, or arising from or relating to the
business relationship between NBD, on the one hand, and any one or more of the
Borrower, Riviera, Holding or Xxxxx, on the other hand, including any actions to
lift the automatic stay or to otherwise in any way monitor or participate in any
bankruptcy, reorganization or insolvency proceeding of the Borrower or Riviera;
(d) all expenses and fees (including attorneys' fees) incurred in relation to,
in connection with, in defense of and/or in prosecution of any litigation
instituted by any one or more of the Borrower, Riviera, Holding, Xxxxx, NBD or
any third party against or involving NBD arising from, relating to, or in
connection with any of the Obligations or any Guarantor's obligations, this
Agreement, any of the Collateral, any of the Loan Documents or the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand, including any so-called "lender
liability" action, any claim and delivery or other action for possession of, or
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foreclosure on, any of the Collateral, post-judgment enforcement of any rights
or remedies including enforcement of any judgments, and prosecution of any
appeals (whether discretionary or as of right and whether in connection with
pre-judgment or post-judgment matters); (e) all costs, expenses and fees
incurred by NBD or its agents in connection with appraisals and reappraisals of
all or any of the Collateral (and the Borrower and Riviera shall fully
cooperate with such appraisers and make their property available for appraisal
in connection with as many appraisals as NBD may request); (f) all costs,
expenses and fees incurred by NBD and/or its counsel in connection with
consultants, expert witnesses or other professionals retained by NBD and/or its
counsel in order to assist, advise and/or give testimony with respect to any
matter relating to the Collateral, the Loan Documents, or the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand (and the Borrower and Riviera
shall fully cooperate with such consultant, expert witness or other
professional and shall make their premises, books and records, accounting
systems, computer systems and other media for the recordation of information
available to such persons); and (g) all costs, expenses and fees incurred by
NBD in connection with any environmental investigations including but not
limited to Phase I, Phase II and Phase III environmental audits (and the
Borrower and Riviera agree that NBD and/or its agents may enter on their
premises at any time to conduct such environmental investigations). Nothing
contained in this paragraph shall, or is intended to, expand the liability of
Xxxxx and Holding beyond that contained in the Limited Guaranty Documents.
All of the foregoing costs, expenses and reimbursement obligations,
set forth in this section (the "Costs") shall be part of the Obligations, and
shall be secured by all of the Collateral. The costs shall be paid within 10
days of written request from NBD.
For purposes hereof "Claims" shall mean any demand, claim, action or
cause of action, damage, liability, loss, cost, debt, expense, obligation, tax,
assessment, charge, lawsuit, contract, agreement, undertaking or deficiency, of
any kind or nature, whether known or unknown, fixed, actual, accrued or
contingent, liquidated or unliquidated (including interest, penalties,
attorneys' fees and other costs and expenses incident to proceedings or
investigations relating to any of the foregoing or the defense of any of the
foregoing), whether or not litigation has commenced.
17. OTHER DOCUMENTS. The Borrower and Riviera agree to execute and
deliver any and all documents reasonably deemed necessary or appropriate by NBD
or counsel to NBD to carry out the intent of and/or to implement the Loan
Documents or this Agreement, including, but not limited to, such documentation
necessary to grant NBD a lien, mortgage and/or security interest in any assets
of the Borrower and Riviera presently not subject to a lien, mortgage or
encumbrance in favor of NBD to secure the Obligations.
18. CROSS DEFAULT/REMEDIES. An Event of Default under the terms of this
Agreement shall be considered an event of default, an event of acceleration and
a default under each document and agreement comprising the Loan Documents and
an event of default, an event of acceleration or a
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default under any document or agreement comprising the Loan Documents, (other
than the Existing Defaults), shall be considered an Event of Default under the
terms of this Agreement, and all of the other Loan Documents. Upon the
occurrence of an Event of Default under this Agreement or any event of default,
event of acceleration or default under any document or agreement comprising the
Loan Documents, or any document executed in connection herewith, or referenced
herein, and without prior notice of or an opportunity to cure such event of
default, event of acceleration or default, except as otherwise provided herein,
(a) NBD shall have the right to exercise any rights or remedies provided in
this Agreement, the Loan Documents, or applicable law, (including, without
limitation, the right to offset any accounts of the Borrower or Riviera with
NBD), (b) NBD may deem the Forbearance Period to be expired, and (c) upon NBD's
election, but without further notice, all of the Obligations shall be
immediately due and payable.
19. DOCUMENTS CONTINUE. Except as expressly modified and amended by the
terms of this Agreement, all of the terms and conditions of the Loan Documents
remain in full force and effect and are hereby ratified, confirmed and approved.
If there is an express conflict between the terms of this Agreement and the
terms of the Loan Documents, the terms of this Agreement shall govern and
control.
20. RESERVATION OF RIGHTS/NO WAIVERS. This Agreement grants a conditional
and limited forbearance until November 30, 1994, only, upon the terms and
conditions set forth in this Agreement. Notwithstanding anything to the
contrary in this Agreement, all of NBD's rights and remedies against the
Borrower, Riviera, third parties, and/or the Collateral and/or any rights of
NBD under the Limited Guaranty Documents are expressly reserved, including,
without limitation, all rights and remedies resulting from, or arising in
connection with, the Existing Defaults. Likewise, nothing herein shall be
deemed to constitute a waiver of any defaults existing as of the date hereof, a
further worsening of the Existing Defaults or new events of default, events of
acceleration or defaults or shall in any way prejudice the rights or remedies
of NBD under the Loan Documents or applicable law. Further, NBD shall have the
right to waive any conditions set forth in this Agreement and/or the Loan
Documents, in its sole and unfettered discretion. And any such waiver shall
not prejudice, waive or reduce any other right or remedy which NBD may have
against the Borrower or Riviera, or any rights of NBD under the Limited
Guaranty Documents. However, the other parties to this Agreement and the Loan
Documents, understand that no waiver by NBD of the rights or any condition of
this Agreement and/or the Loan Documents shall be effective unless the same
shall be contained in writing signed by an authorized agent of NBD.
21. CREDIT INQUIRIES. In the event customers, buyers, potential financing
sources or other parties make inquiry of NBD as to the current lending
relationship between NBD, on the one hand, and the Borrower or Riviera, on the
other hand, the parties agree that NBD may refer such inquiries to the Borrower
or Riviera.
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22. AUTHORITY. Each party executing this Agreement in a representative
capacity represents and warrants that he or she has authority to execute this
Agreement and legally bind the entity he or she represents.
23. MISCELLANEOUS.
(a) This Agreement constitutes the entire understanding of the parties
with respect to the subject matter hereof and may be modified or amended only by
a writing signed by the party to be charged.
(b) This Agreement is governed by the internal laws of the State of
Michigan (without regard to conflicts of law principles).
(c) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but together they shall constitute one and the same
instrument, and facsimile copies of signatures shall be treated as original
signatures for all purposes.
(d) This Agreement is binding on each of the Borrower and Riviera and
their respective successors and assigns and shall inure to the benefit of NBD
and its successors and assigns.
(e) If any provision of this Agreement is in conflict with any
applicable statute or rule of law or otherwise unenforceable, such offending
provision shall be null and void only to the extent of such conflict or
unenforceability, but shall be deemed separate from and shall not invalidate any
other provision of this Agreement.
(f) Defined terms used in this Agreement without definition shall have
the meanings given to them under the Credit Agreement.
24. NO OTHER PROMISES OR INDUCEMENTS. There are no promises or inducements
which have been made to any signatory hereto to cause such signatory to enter
into this Agreement other than those which are set forth in this Agreement.
25. WAIVER OF JURY TRIAL AND ACKNOWLEDGEMENT. THE PARTIES HERETO
ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT
THIS RIGHT MAY BE WAIVED. NBD, THE BORROWER AND RIVIERA EACH HEREBY KNOWINGLY,
VOLUNTARILY AND WITHOUT COERCION, WAIVE ALL RIGHTS TO A TRIAL BY JURY OF ALL
DISPUTES BETWEEN NBD AND ANY OTHER PARTY HERETO ARISING OUT OF OR IN ANY
RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS OR RELATIONSHIPS BETWEEN THE
PARTIES. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT OF THIS
WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN INSTRUMENT
SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED.
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EACH OF THE BORROWER AND RIVIERA ACKNOWLEDGES THAT (1) IT HAS BEEN
GIVEN THE OPPORTUNITY TO CONSULT WITH COUNSEL AND OTHER ADVISORS OF ITS CHOICE
AND, AFTER CONSULTING WITH SUCH COUNSEL AND ADVISORS, KNOWINGLY, VOLUNTARILY AND
WITHOUT DURESS, COERCION, UNLAWFUL RESTRAINT, INTIMIDATION OR COMPULSION, ENTERS
INTO THIS AGREEMENT, BASED UPON SUCH ADVICE AND COUNSEL AND IN THE EXERCISE OF
ITS BUSINESS JUDGMENT, (2) THIS AGREEMENT HAS BEEN ENTERED INTO IN EXCHANGE FOR
GOOD AND VALUABLE CONSIDERATION, RECEIPT OF WHICH THE PARTIES HERETO
ACKNOWLEDGE, (3) IT HAS CAREFULLY AND COMPLETELY READ ALL OF THE TERMS AND
PROVISIONS OF THIS AGREEMENT AND IS NOT RELYING ON THE OPINIONS OR ADVICE OF NBD
OR ITS AGENTS OR REPRESENTATIVES IN ENTERING INTO THIS AGREEMENT.
26. STATUTE OF FRAUDS. THIS WRITTEN FORBEARANCE AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
NBD BANK, N.A.
By: Xxxxxxx X. Xxxxxxxx
-------------------------
Its: Vice President
----------------------
RIVIERA DIE & TOOL, INC.
By: Xxxxxxx X. Xxxxx
---------------------------
Its: President
----------------------
RIVIERA TOOL COMPANY
By: Xxxxxxx X. Xxxxx
---------------------------
Its: President
---------------------
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TWELFTH AMENDMENT TO CREDIT AGREEMENT
AND RESTATED FORBEARANCE AGREEMENT
NBD Bank, formerly known as NBD Bank, N.A., successor by merger to the
interests of NBD Grand Rapids, N.A. ("NBD" or the "Bank"), Riviera Die & Tool,
Inc. (formerly known as R.D.T., Inc.), a Michigan Corporation (the "Borrower"),
and Riviera Tool Company, a Michigan Corporation ("Riviera") enter into this
Twelfth Amendment to Credit Agreement and Restated Forbearance Agreement (the
"Agreement") effective as of the 1st day of May, 1995.
RECITALS
A. The Borrower and the Bank entered into a Credit Agreement dated April
20, 1988, as amended by a First Amendment to Credit Agreement dated August 31,
1988, a Second Amendment to Credit Agreement dated January 30, 1989, a Third
Amendment to Credit Agreement dated January 30, 1990, a Fourth Amendment to
Credit Agreement dated May 16, 1991, a Fifth Amendment to Credit Agreement
dated July 31, 1992, a Sixth Amendment to Credit Agreement dated January 31,
1993, a Seventh Amendment to Credit Agreement dated March 31, 1993, an Eighth
Amendment to Credit Agreement dated July 26, 1993, a Ninth Amendment to Credit
Agreement dated March 4, 1994, a Forbearance Agreement dated April 14, 1994
(the "Original Forbearance Agreement") and a Tenth Amendment to Credit
Agreement and Restated Forbearance Agreement dated May 5, 1994, and an Eleventh
Amendment to Credit Agreement and Restated Forbearance Agreement dated as of
December 1, 1994 (collectively, the "Credit Agreement") by which the Bank has
made certain credit facilities available to the Borrower upon the terms and
subject to the conditions set forth in the Credit Agreement.
B. Pursuant to the Credit Agreement, the Borrower has executed two (2)
promissory notes: (i) the Tenth Amended and Restated Working Capital Revolving
Credit Note in the original principal amount of $12,500,000.00 dated May 5,
1994 (the "Working Capital Revolving Credit Note"); and (ii) an Amended and
Restated Term Note in the original principal amount of $1,456,962.00 dated May
5, 1994 (the "Term Note").
C. In connection with the Credit Agreement, Riviera executed and delivered
to the Bank a Guaranty dated April 20, 1988, pursuant to which, among other
things, Riviera guarantied all of the Borrower's obligations (including the
Obligations as defined below) to the Bank, whether then existing or thereafter
arising or created (the "Riviera Guaranty").
D. In addition, Xxxxxxx Xxxxx ("Xxxxx") and Riviera Holding Company
("Holding") (collectively, Xxxxx and Holding may be hereinafter referred to as
the "Limited Guarantors") each executed and delivered Guaranties and Continuing
Pledge Agreements (the "Limited Guaranty Documents") dated August 4, 1992 and
July 26, 1993.
E. As of June 1, 1995, there was (i) $7,940,417.83 in principal
indebtedness owing by the Borrower under the Working Capital Revolving Credit
Note and (ii) $976,962.00 in principal indebtedness owing by the Borrower
pursuant to the Term Note. These sums, together with accrued but unpaid
interest, costs and expenses (including attorneys' fees), as well as all
84
other present and future obligations of the Borrower to the Bank, including,
but not limited to, obligations arising under or in connection with the Loan
Documents (as defined below) or any other document executed in connection
therewith or subsequent thereto by the Borrower in favor of the Bank are
hereinafter referred to as the "Obligations".
F. On April 20, 1988, the Borrower executed and delivered to NBD a
Security Agreement (Accounts, General Intangibles and Chattel Paper), a
Security Agreement (Inventory) and a Security Agreement (Equipment), as amended
by a First Amendment to each of the above-described Security Agreements dated
January 30, 1989 (the "Borrower Security Agreements") wherein Borrower granted
to NBD a valid, perfected, indefeasible and enforceable first priority lien and
security interest in favor of the Bank in all of the Borrower's present and
future personal property, including, but not limited to, accounts, chattel
paper, general intangibles, documents, instruments, inventory, equipment,
fixtures and all other tangible and intangible personal property and all
proceeds and products thereof with the exception of certain property described
in Section 5.8 of the Credit Agreement. For convenience, all of the collateral
referred to in the Borrower Security Agreements, together with all other
collateral described in and/or granted in connection with any of the Loan
Documents (as hereinafter defined), together with all collateral heretofore,
simultaneously herewith or hereafter granted to the Bank by the Borrower to
secure any of the Borrower's or any other parties' present or future
obligations to the Bank, is collectively referred to as the "Borrower
Collateral".
G. On April 20, 1988, Riviera executed and delivered to NBD a Security
Agreement (Accounts, General Intangibles and Chattel Paper), a Security
Agreement (Inventory) and a Security Agreement (Equipment) (the "Riviera
Security Agreements") wherein Riviera granted to NBD a valid, perfected,
indefeasible and enforceable first priority lien and security interest in favor
of the Bank in all of Riviera's present and future personal property,
including, but not limited to, accounts, chattel paper, general intangibles,
documents, instruments, inventory, equipment, fixtures and all other tangible
and intangible personal property and all proceeds and products thereof. For
convenience, all of the collateral referred to in the Riviera Security
Agreements, together with all other collateral described in and/or granted in
connection with any of the Loan Documents (as hereinafter defined), together
with all collateral heretofore, simultaneously herewith or hereafter granted to
the Bank by Riviera to secure any of Riviera's or any other parties' present or
future obligations to the Bank, is collectively referred to as the "Riviera
Collateral".
H. The Borrower and Riviera acknowledge and agree that (i) the Obligations
are due the Bank without setoff, recoupment, defense or counterclaim, in law or
equity, of any nature or kind; (ii) the Obligations are secured by valid,
perfected, indefeasible, enforceable first priority liens and security
interests (except as permitted by Section 5.8 of the Credit Agreement) in favor
of the Bank in, among other things, (a) all of the Borrower's present and
future personal property, including, without limitation, accounts, chattel
paper, general intangibles, documents, instruments, inventory, equipment,
fixtures and all other tangible and intangible personal property and all
proceeds and products thereof, and (b) all of Riviera's present and future
personal property, including, without limitation, accounts, chattel paper,
general intangibles, documents,
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instruments,inventory, equipment, fixtures and all other tangible and
intangible personal property and all proceeds and products thereof, and (c) the
collateral described in the Limited Guaranty Documents. For convenience, the
Credit Agreement, the Working Capital Revolving Credit Note, the Term Note
(collectively, the "Notes"), the Borrower Security Agreements, the Riviera
Guaranty, the Riviera Security Agreements, the Limited Guaranty Documents, the
Original Forbearance Agreement, this Agreement and any other document executed
therewith or subsequent thereto by the Borrower in favor of the Bank are
hereinafter referred to as the "Loan Documents". For convenience, all of the
Borrower Collateral, the Riviera Collateral and the collateral referenced in
the Limited Guaranty Documents shall hereinafter be referred to as the
"Collateral".
I. The Borrower and Riviera reaffirm, ratify, confirm and approve their
obligations and duties under the Loan Documents as modified by this Agreement.
J. Borrower and Riviera, jointly, jointly and severally and severally,
reaffirm, ratify and confirm the liens, assignments and security interests
granted to NBD under the Loan Documents and confirm that any and all collateral
granted to NBD by any party for the purpose of securing repayment of all or any
part of the Borrower's or Riviera's obligations (including the Obligations)
owed to NBD, including, but not limited to the Collateral, shall constitute and
serve as collateral for any and all of the obligations and duties of the
Borrower and Riviera to NBD (including the Obligations), whether now existing
or hereafter arising.
K. Borrower and Riviera each acknowledge that prior to June 1, 1995, there
were defaults under the Loan Documents as follows (collectively, the "Existing
Defaults"):
(1) The Leverage Ratio of Riviera and the Borrower,
determined on a consolidated basis, is greater than 3 to 1
(3.44 to 1 as of March 31, 1995).
(2) The Working Capital of Riviera and the Borrower, determined on a
consolidated basis, is less than $200,000 (minus $3,237,000.00 as
of March 31, 1995.
(3) The Tangible Net Worth of Riviera and Borrower, determined on a
consolidated basis, is less than $6,000,000 from and after
August 31, 1994 ($5,438,000.00 as of March 31, 1995).
(4) The aggregate principal amount outstanding under the Working
Capital Revolving Credit, has in the past periodically exceeded
the Borrowing Base (the "Borrowing Base Deficiency").
Borrower and Riviera represent and warrant that, to the best of their
knowledge, after due inquiry and investigation, they are unaware of any other
Events of Default (as defined in the Credit Agreement) or defaults under any of
the Loan Documents or this Agreement or of any event that,
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with the passage of time, notice, or both, would become an Event of Default or
a default under the Loan Documents or this Agreement.
L. Borrower and Riviera also acknowledge that based on the Existing
Defaults, NBD has the right, without further notice, to accelerate all of the
Obligations, demand payment in full and enforce its rights under the Loan
Documents and applicable law.
M. The Borrower and Riviera further acknowledge and agree that the actions
taken by the Bank to date are reasonable and appropriate under the
circumstances, are within NBD's rights under the Loan Documents and applicable
law and do not constitute interference with or control over the business
operations of any of the parties hereto.
N. Borrower and Riviera have requested that NBD continue to forbear from
enforcing its rights and remedies under the Loan Documents and applicable law
for an additional period through August 31, 1995, to afford such parties an
opportunity to obtain alternative financing to satisfy the Obligations in full.
Borrower had previously represented to the Bank that it would use its best
efforts to acquire a minimum of $3 million in new equity prior to October 31,
1994, which infusion the Borrower believed could occur prior to March 31, 1995.
O. Borrower and Riviera had additionally previously requested that the
Bank increase the cap on the Working Capital Facility temporarily from $10
million to $12.5 million to provide Borrower with additional needed working
capital. The period for the temporary increase has expired and the cap is now
$10 million.
P. Borrower and Riviera have additionally requested that the Bank extend
the April 30, 1995 maturity date on the Working Capital Revolving Credit Note
and the Term Note until August 31, 1995.
Q. The Borrower and Riviera acknowledge and agree that (i) NBD has fully
performed all of its obligations under the Loan Documents and all other
agreements between NBD and such parties; (ii) any future loans will be made at
NBD's sole and unfettered discretion; and (iii) NBD has not made any
representations of any kind or nature that funding in any amount will continue
or that the Forbearance Period (as defined in Section 1 below) will be extended
beyond August 31, 1995. NBD HAS INFORMED BORROWER AND RIVIERA THAT IT DOES NOT
INTEND TO EXTEND THE FORBEARANCE PERIOD BEYOND AUGUST 31, 1995, AND THAT THEY
SHOULD PAY NBD IN FULL ON OR BEFORE THAT DATE.
NOW, THEREFORE, based on the foregoing Recitals (which are incorporated in
this Agreement as and shall constitute representations, warranties and
covenants of the respective parties to this Agreement, as the case may be), and
for other good and valuable consideration, the parties hereto agree as follows:
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1. FORBEARANCE. Subject to the following conditions precedent in this
Section 1 and subject to the other terms of this Agreement, NBD agrees to
forbear from enforcing its rights and remedies based on the Existing Defaults,
through the earlier of (i) a further or additional default or Event of Default
under the Loan Documents (including a worsening of the Existing Defaults); (ii)
a default or Event of Default under this Agreement; or (iii) August 31, 1995
(the "Forbearance Period"):
(a) Simultaneously with the execution of this Agreement, receipt
by NBD of an executed Twelfth Amended and Restated Working Capital Revolving
Credit Note in substantially the form attached hereto as Exhibit 1(a);
(b) Simultaneously with the execution of this Agreement, receipt
by NBD of an executed Third Amended and Restated Term Note in substantially the
form attached hereto as Exhibit 1(b);
(c) Simultaneously with the execution of this Agreement, receipt
by NBD of an executed copy of the Reaffirmation and Release Agreement in
substantially the form attached hereto as Exhibit 1(c);
(d) Simultaneously with the execution of this Agreement, receipt
by NBD of a fully-executed copy of this Agreement acknowledged by counsel to
the Borrower and Riviera;
(e) Simultaneously with the execution of this Agreement,
Borrower shall make all payments currently due under the Loan Documents.
(f) NBD receives such other additional documentation necessary to
carry out the intent and purposes of this Agreement.
2. ALL OBLIGATIONS DUE. ALL OF THE OBLIGATIONS INCLUDING, WITHOUT
LIMITATION, OBLIGATIONS UNDER THE CREDIT AGREEMENT, THE WORKING CAPITAL
REVOLVING CREDIT NOTE, THE TERM NOTE AND THIS AGREEMENT SHALL BE DUE AND
PAYABLE ON THE EARLIER OF (i) A DEFAULT, AN EVENT OF DEFAULT OR BREACH OF THE
TERMS AND CONDITIONS OF THIS AGREEMENT, OR (ii) AUGUST 31, 1995.
3. NO FURTHER FORBEARANCE IMPLIED. THE BORROWER AND RIVIERA
ACKNOWLEDGE THAT (a) NBD DOES NOT INTEND, NOR DOES NBD HAVE ANY OBLIGATION, TO
EXTEND LOANS, ADVANCES OR OTHER FINANCIAL ACCOMMODATIONS TO THE PARTIES HERETO
BEYOND AUGUST 31, 1995, (b) NBD DOES NOT INTEND TO FORBEAR FROM ENFORCING ITS
RIGHTS AND REMEDIES AFTER AUGUST 31, 1995, AND NOTHING CONTAINED HEREIN OR
OTHERWISE IS INTENDED TO BE A PROMISE OR AGREEMENT TO MAKE ADVANCES UNDER THE
WORKING CAPITAL REVOLVING CREDIT NOTE AFTER AUGUST 31, 1995 OR TO EXTEND THE
TERMS OF THIS AGREEMENT BEYOND AUGUST 31, 1995, (c) ALL OF
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THE OBLIGATIONS ARE DUE, ABSENT AN EARLIER DEFAULT UNDER THE LOAN DOCUMENTS, ON
OR BEFORE AUGUST 31, 1995, AND (d) NBD INTENDS TO TAKE ANY STEPS NECESSARY TO
ASSURE SATISFACTION OF THE OBLIGATIONS IN FULL BY AUGUST 31, 1995 OR AS SOON
THEREAFTER AS POSSIBLE. THE BORROWER, RIVIERA, XXXXX AND HOLDING HAVE BEEN
ADVISED THAT THEY SHOULD PURSUE ALTERNATIVE FINANCING SOURCES.
4. BORROWING BASE DEFICIENCY. Borrower shall at all times comply
with the terms and conditions of the Working Capital Facility and shall not
permit or cause to exist a Borrowing Base Deficiency.
5. COLLATERAL. As noted in the Recitals, Borrower and Riviera have
granted to NBD a valid, perfected, indefeasible, enforceable first priority
lien and security interest in and to all of their respective personal property
(except as permitted by Section 5.8 of the Credit Agreement). As an
accommodation to the Borrower, NBD, from time to time, has executed and filed
UCC-3 partial releases with respect to certain specific equipment.
Notwithstanding the filing of these partial releases, the Borrower hereby
ratifies and grants to NBD a continuing security interest in all of its
personal property, including such equipment referenced in the UCC-3 partial
releases.
6. AMENDMENTS TO CREDIT AGREEMENT.
(a) AMENDMENT TO REVOLVING CREDIT FACILITY.
Article II of the Credit Agreement is hereby amended in its
entirety to read as follows:
"ARTICLE II
Working Capital Revolving Credit Facility
2.1 Loan. Subject to all of the terms and conditions hereof,
the Bank may, in its sole and unfettered discretion, lend to the
Borrower from time to time through August 31, 1995, such sums in
multiples of Twenty-Five Thousand Dollars ($25,000.00) as may be
requested from time to time by the Borrower in a manner specified by
the Bank, provided that the aggregate principal amount outstanding at
any time pursuant to the provisions of this Section 2.1 shall not
exceed the lesser of Nine Million Dollars ($9,000,000.00) (the
"Working Capital Revolving Credit") or the Borrowing Base. In the
event the principal amount outstanding at any time shall exceed said
amounts, the Borrower shall forthwith pay to the Bank an amount
sufficient to eliminate such excess.
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Subject to the terms and conditions of this Agreement, the Borrower may
borrow, prepay pursuant to Section 2.3, and reborrow under this Section
2.1. Upon the execution of this Agreement, the Borrower shall execute and
deliver to the Bank a revolving credit demand note in the form of Exhibit
1(a) attached hereto (the "Twelfth Amended and Restated Working Capital
Revolving Credit Note"), the terms of which are incorporated herein by
reference. All commitments by the Bank on behalf of the Borrower by way of
instrument certification, letter of credit or similar device shall be
considered loans pursuant to this Section 2.1.
2.2 Use of Proceeds. The proceeds of the loans pursuant to this
Article II shall be used to refinance existing revolving credit debt and to
assist with the working capital needs of the Borrower.
2.3 Payment of Working Capital Revolving Credit Note; Prepayment.
Except as payment of part or all of the principal amount of the loans
outstanding pursuant to this Article II is sooner required to be made under
Section 2.1 or Article VIII hereof, the full principal amount of the loans
outstanding under this Article II and all accrued interest thereon shall be
paid by Borrower on or before August 31, 1995. The Borrower may prepay all
or any part of the indebtedness under Section 2.1 at any time without
penalty provided any prepayment shall be in a multiple of One Thousand
Dollars ($1,000.00).
2.4 Interest. Except as provided in Article VIII hereof, the Working
Capital Revolving Credit Note shall bear interest at the annual rate of
three percent (3%) over the Prime Rate. Interest shall be computed
daily on the basis of a Three Hundred Sixty (360) day year and shall be
billed to the Borrower monthly based upon the principal balance outstanding
and the actual number of days in the preceding month. Interest shall be due
and payable no later than the first day of each month.
2.5 Availability Fee. The Borrower agrees to pay to the Bank an
Availability Fee at a rate equal to three-eighths of one percent (3/8%) per
annum on the average daily unused portion of the Working Capital Revolving
Credit for the period from the date of this Agreement to and including
August 31, 1995, and thereafter until full payment of the Eleventh Amended
and Restated Working Capital Revolving Credit Note. Accrued availability
fees shall be payable quarterly in arrears on the first day of each January,
April,
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July and October commencing on the first such day after the date of
this Agreement.
2.6 Facility Fee. The Borrower agrees to pay to the Bank a facility
fee at a rate equal to one-eighth of one percent (1/8%) per annum on the
Working Capital Revolving Credit, whether used or unused, for the period
from the date of this Agreement to and including August 31, 1995, and
thereafter until payment of the Twelfth Amended and Restated Working
Capital Revolving Credit Note. The facility fee shall be payable quarterly
in arrears on the first day of each January, April, July and October
commencing on the first such day after the date of this Agreement.
(b) AMENDMENT TO TERM LOAN.
(i) Section 3.3 of the Credit Agreement is hereby amended in its
entirety to read as follows:
"3.3 Payment of Term Note; Prepayment. Except as payment of part or
all of the Term Note is sooner required under Section 3.1 or Article VIII,
the principal of the Term Note shall be paid in monthly installments of
$40,000 each on the first day of each month commencing December 1, 1994, and
continuing thereafter up to and including August 1, 1995 and a final payment
on August 31, 1995 consisting of the entire remaining outstanding principal
balance of, all accrued interest on, and all other sums due under the Term
Note. The Borrower may prepay at any time all or any portion of the Term
Note without premium or penalty provided that any prepayments shall be
applied to principal last maturing."
7. NEGATIVE COVENANTS. During the Forbearance Period, without the
prior written consent of the Bank, the Borrower and Riviera shall not:
(a) RESTRICTION ON LIENS. Create or permit to be created or allow to
exist any new, additional or expanded lien upon any property or assets now
owned or acquired in the future by the Borrower and Riviera.
(b) RESTRICTION ON INDEBTEDNESS. Create, incur, assume, suffer to exist,
have outstanding or in any manner become liable in respect of any indebtedness
for money other than the Obligations or indebtedness incurred in the ordinary
course of the business of the Borrower for necessary materials and services.
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(c) CAPITAL ASSET EXPENDITURE. Expend sums for the acquisition of
capital assets, including payments under any new lease of real or personal
property.
(d) SALE AND LEASEBACK. Enter into any new agreement providing for the
leasing by the Borrower of property which has been or is to be sold or
transferred by the Borrower or lessor of the property.
(e) TRANSACTIONS WITH AFFILIATES. Enter into, or permit or suffer to
exist, any transaction or arrangement with any Affiliate, except on terms which
are no less favorable to the Borrower than could be obtained from persons who
are not Affiliates in arm's length transactions.
8. FURTHER INPUT.
(a) Borrower shall continue to use its best efforts to arrange a
meeting between representatives of NBD, representatives of Borrower and
appropriate decision-making representatives of Motor Wheel to meet and discuss
the future direction and plans of Borrower prior to the expiration of the
Forbearance Period;
(b) Borrower shall use its best efforts to obtain a written agreement
by Comerica Bank to subordinate any debt and security interest it may have with
Borrower and/or Riviera, in form and substance acceptable to NBD.
(c) Borrower agrees that it will immediately engage a crisis management
consultant for advisory consulting purposes, which consultant must be
acceptable to NBD if NBD, in its sole discretion, requests Borrower retain such
consultant. Borrower agrees that it will, upon such request by NBD, seek and
recommend the immediate approval and engagement of, a crisis management
consultant with management authority, upon board approval and authorization
(which consultant must be acceptable to NBD) and retain such a consultant.
9. NO OVERDRAFTS. Borrower and Riviera agree that they will
not create any overdrafts in any accounts at NBD. Furthermore, Borrower
and Riviera acknowledge and agree that NBD shall not, under any circumstances,
be required to honor any checks or other items presented to NBD for payment for
which there are insufficient available funds in Borrower's account at NBD for
payment and NBD may return any such items so presented. In the event that such
items are not returned, this shall not create any right or expectation that
such overdrafts will be tolerated or permitted in the future.
10. TAXES. Borrower and Riviera represent that they are paying all
taxes on a timely basis except as set forth on Exhibit 2 attached hereto.
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11. EVENTS OF DEFAULT. In addition to any other defaults or Events of
Default contained in any of the Loan Documents, the following shall constitute
an Event of Default under this Agreement and each of the Loan Documents:
(a) any further or additional Events of Default, events of
acceleration or defaults provided for in any of the Loan Documents
(including a worsening of any of the Existing Defaults for any reason other
than the impact of the restructuring transaction between the Borrower and
Xxxxxx Financial Leasing, Inc. and Banc One Leasing Corporation entered into in
April of 1994);
(b) if any representation or warranty made by Borrower or Riviera in
this Agreement or in connection with the negotiation hereof is untrue as of
the date made or hereafter becomes untrue;
(c) the Borrower and/or Riviera shall at any time fail to observe,
perform or comply with any Dominion of Funds Agreement with NBD;
(d) there shall exist at any time a Borrowing Base Deficiency;
(e) Any lender, supplier, creditor or lessor shall (i) accelerate any
obligations of the Borrower or Riviera, due to a default by Borrower or Riviera
under any agreement with any creditor in excess of $25,000 to such creditor or
shall otherwise take any action of any kind or nature to enforce or begin
enforcement of its rights or remedies against Borrower or Riviera by reason of
such default, or (ii) receive from Borrower or Riviera any prepayments of
obligations, any extraordinary payments of outstanding indebtedness or fees, or
fees or interest above the level paid to such creditor by Borrower or Riviera
as of January 1, 1994; and
(f) Any creditor, including, but not limited to, any governmental
taxing authority, shall cause a lien to be filed on any of the Collateral
(other than a lien for taxes not yet due and payable).
12. RELEASE. As of the date hereof, the Borrower and Riviera represent and
warrant that they are aware of, and possess, no claims or causes of action
against the Bank. Notwithstanding this representation and as further
consideration for the agreements and understandings herein, the Borrower and
Riviera, individually, jointly and severally, and on behalf of each of their
respective officers, directors, employees, agents, executors, successors and
assigns, hereby release NBD, its officers, directors, employees, agents,
attorneys, affiliates, subsidiaries, successors and assigns from any liability,
claim, right or cause of action which now exists or hereafter arises, whether
known or unknown, arising from events occurring prior to and in any way related
to facts in existence as of the date hereof. By way of example and not
limitation, the foregoing includes any claims in any way related to actions
taken or omitted to be taken by NBD under the Loan Documents, or this Agreement
and the business relationship with NBD.
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13. AUTHORIZATION TO DEBIT ACCOUNT. In the event that any payment called
for by the Loan Documents, this Agreement (or any agreement referred to or
incorporated herein) or any other present or future agreements between NBD and
the Borrower and/or Riviera are not paid when and as called for under the terms
of such agreement, then NBD may debit any of such accounts of the Borrower
and/or Riviera at NBD for such amount. In the event of such a debit, NBD will
use its best efforts to notify the Borrower and/or Riviera of such debit within
two (2) business days. The fact that NBD had debited any of the accounts of
the Borrower and/or Riviera at NBD shall in no way whatsoever waive or diminish
any default for failure to make such payments when and as due.
14. SETOFF. Upon the occurrence of a default, NBD is hereby authorized at
any time and from time to time, without notice to the Borrower or Riviera (any
such notice being expressly waived), to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by NBD to or for the credit or the account
of the Borrower and/or Riviera against any and all of the Obligations, now or
hereafter existing, including those under this Agreement or the Loan Documents
or any of the Notes or any other agreement or instrument, irrespective of
whether or not NBD shall have made any demand under this Agreement or any Note
or otherwise. The Bank agrees to promptly notify the Borrower and/or Riviera
after any such setoff and application provided that the failure to give such
notice shall not affect the validity of such setoff and application and shall
not create any claims or liabilities against NBD. The rights of NBD under this
section shall not require maturity of any indebtedness and are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which NBD may have.
15. VERIFICATION OF ACCOUNTS/AUDITS. The Borrower and Riviera agree that
NBD, through its employees or authorized agents, shall be permitted to send a
letter to and otherwise contact each of its respective account debtors to
verify account receivable balances. In addition, NBD, an accountant or
accounting firm retained by NBD and other advisors, representatives or agents
of NBD shall be permitted full and complete access to the Borrower's and
Riviera's facilities and books and records to conduct audits as often as NBD
reasonably desires. The reasonable cost of such audits ("Audit Fees"), whether
conducted by NBD (in which case NBD shall be entitled to make a reasonable
charge, plus out-of-pocket costs and expenses), an accountant or accounting
firm retained by NBD or other advisors, representatives or agents of NBD
(including, but not limited to, Xxxxxx Enterprises Inc.) shall be part of the
Obligations and shall be secured by all of the Collateral.
16. EXPENSES, FEES AND COSTS; INDEMNIFICATION. The Borrower and Riviera,
jointly and severally, shall be responsible for the payment of all fees and
out-of-pocket disbursements incurred by NBD, including fees of counsel and
court costs, in any way arising from or in connection with this Agreement, any
of the Coilateral, any of the Loan Documents, any of the Obligations or the
business relationship between NBD, on the one hand, and any one or more of the
Borrower, Riviera, Holding or Xxxxx, on the other hand, including, without
limitation, (a) Audit Fees; (b) all fees and expenses (including recording fees
and insurance policy fees) of NBD and counsel for NBD for the preparation,
examination, approval, negotiation, execution and
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delivery of, or the closing of any of the transactions contemplated by, this
Agreement or any of the Loan Documents; (c) all fees and out-of-pocket
disbursements incurred by NBD, including attorneys' fees and accountants' fees,
in any way arising from or in connection with any action taken by NBD to
monitor, advise, administer, enforce or collect any of the Obligations
(including under this Agreement and the Loan Documents) or any other
obligations of the Borrower or Riviera, whether joint, joint and several, or
several, under this Agreement, any of the Loan Documents or any other existing
or future document or agreement, or arising from or relating to the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand, including any actions to lift the
automatic stay or to otherwise in any way monitor or participate in any
bankruptcy, reorganization or insolvency proceeding of the Borrower or Riviera;
(d) all expenses and fees (including attorneys' fees) incurred in relation to,
in connection with, in defense of and/or in prosecution of any litigation
instituted by any one or more of the Borrower, Riviera, Holding, Xxxxx, NBD or
any third party against or involving NBD arising from, relating to, or in
connection with any of the Obligations or any Guarantor's obligations, this
Agreement, any of the Collateral, any of the Loan Documents or the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand, including any so-called "lender
liability" action, any claim and delivery or other action for possession of, or
foreclosure on, any of the Collateral, post-judgment enforcement of any rights
or remedies including enforcement of any judgments, and prosecution of any
appeals (whether discretionary or as of right and whether in connection with
pre-judgment or post-judgment matters); (e) all costs, expenses and fees
incurred by NBD or its agents in connection with appraisals and reappraisals of
all or any of the Collateral (and the Borrower and Riviera shall fully
cooperate with such appraisers and make their property available for appraisal
in connection with as many appraisals as NBD may request); (f) all costs,
expenses and fees incurred by NBD and/or its counsel in connection with
consultants, expert witnesses or other professionals retained by NBD and/or its
counsel in order to assist, advise and/or give testimony with respect to any
matter relating to the Collateral, the Loan Documents, or the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand (and the Borrower and Riviera
shall fully cooperate with such consultant, expert witness or other
professional and shall make their premises, books and records, accounting
systems, computer systems and other media for the recordation of information
available to such persons); and (g) all costs, expenses and fees incurred by
NBD in connection with any environmental investigations including but not
limited to Phase I, Phase II and Phase III environmental audits (and the
Borrower and Riviera agree that NBD and/or its agents may enter on their
premises at any time to conduct such environmental investigations). Nothing
contained in this paragraph shall, or is intended to, expand the liability of
Xxxxx and Holding beyond that contained in the Limited Guaranty Documents.
All of the foregoing costs, expenses and reimbursement obligations, set
forth in this section (the "Costs") shall be part of the Obligations, and shall
be secured by all of the Collateral. The costs shall be paid within 10 days of
written request from NBD.
For purposes hereof "Claims" shall mean any demand, claim, action or cause
of action, damage, liability, loss, cost, debt, expense, obligation, tax,
assessment, charge, lawsuit,
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contract, agreement, undertaking or deficiency, of any kind or nature, whether
known or unknown, fixed, actual, accrued or contingent, liquidated or
unliquidated (including interest, penalties, attorneys' fees and other costs
and expenses incident to proceedings or investigations relating to any of the
foregoing or the defense of any of the foregoing), whether or not litigation
has commenced.
17. OTHER DOCUMENTS. The Borrower, Riviera, Xxxxx and Holding agree to
execute and deliver any and all documents reasonably deemed necessary or
appropriate by NBD or counsel to NBD to carry out the intent of and/or to
implement the Loan Documents or this Agreement, including, but not limited to,
such documentation necessary to grant NBD a lien, mortgage and/or security
interest in any assets of the Borrower and Riviera presently not subject to a
lien, mortgage or encumbrance in favor of NBD to secure the Obligations.
18. CROSS DEFAULT/REMEDIES. An Event of Default under the terms of this
Agreement shall be considered an event of default, an event of acceleration and
a default under each document and agreement comprising the Loan Documents and
an event of default, an event of acceleration or a default under any document
or agreement comprising the Loan Documents, (other than the Existing Defaults),
shall be considered an Event of Default under the terms of this Agreement, and
all of the other Loan Documents. Upon the occurrence of an Event of Default
under this Agreement or any event of default, event of acceleration or default
under any document or agreement comprising the Loan Documents, or any document
executed in connection herewith, or referenced herein, and without prior notice
of or an opportunity to cure such event of default, event of acceleration or
default, except as otherwise provided herein, (a) NBD shall have the right to
exercise any rights or remedies provided in this Agreement, the Loan Documents,
or applicable law, (including, without limitation, the right to offset any
accounts of the Borrower or Riviera with NBD), (b) NBD may deem the Forbearance
Period to be expired, and (c) upon NBD's election, but without further notice,
all of the Obligations shall be immediately due and payable. IN ANY EVENT,
FROM AND AFTER THE CLOSE OF BUSINESS ON AUGUST 31, 1995, NBD MAY IMMEDIATELY
TAKE ACTION TO ENFORCE ALL OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS,
THIS AGREEMENT OR APPLICABLE LAW, INCLUDING, BUT NOT LIMITED TO, COLLECTION OF
THE BORROWER'S OBLIGATIONS.
19. DOCUMENTS CONTINUE. Except as expressly modified and amended by the
terms of this Agreement, all of the terms and conditions of the Loan Documents
remain in full force and effect and are hereby ratified, confirmed and
approved. If there is an express conflict between the terms of this Agreement
and the terms of the Loan Documents, the terms of this Agreement shall govern
and control.
20. RESERVATION OF RIGHTS/NO WAIVERS. This Agreement grants a conditional
and limited forbearance until August 31, 1995, only, upon the terms and
conditions set forth in this Agreement. Notwithstanding anything to the
contrary in this Agreement, all of NBD's rights and remedies against the
Borrower, Riviera, third parties, and/or the Collateral and/or any rights of
NBD under the Limited Guaranty Documents are expressly reserved, including,
without
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limitation, all rights and remedies resulting from, or arising in connection
with, the Existing Defaults. Likewise, nothing herein shall be deemed to
constitute a waiver of any defaults existing as of the date hereof, a further
worsening of the Existing Defaults or new events of default, events of
acceleration or defaults or shall in any way prejudice the rights or remedies
of NBD under the Loan Documents or applicable law. Further, NBD shall have the
right to waive any conditions set forth in this Agreement and/or the Loan
Documents, in its sole and unfettered discretion. And any such waiver shall
not prejudice, waive or reduce any other right or remedy which NBD may have
against the Borrower or Riviera, or any rights of NBD under the Limited
Guaranty Documents. However, the other parties to this Agreement and the Loan
Documents, understand that no waiver by NBD of the rights or any condition of
this Agreement and/or the Loan Documents shall be effective unless the same
shall be contained in writing signed by an authorized agent of NBD.
21. CREDIT INQUIRIES. In the event customers, buyers, potential financing
sources or other parties make inquiry of NBD as to the current lending
relationship between NBD, on the one hand, and the Borrower or Riviera, on
the other hand, the parties agree that NBD may refer such inquiries to the
Borrower or Riviera.
22. AUTHORITY. Each party executing this Agreement in a representative
capacity represents and warrants that he or she has authority to execute this
Agreement and legally bind the entity he or she represents.
23. MISCELLANEOUS.
(a) This Agreement constitutes the entire understanding of the parties
with respect to the subject matter hereof and may be modified or amended only
by a writing signed by the party to be charged.
(b) This Agreement is governed by the internal laws of the State of
Michigan (without regard to conflicts of law principles).
(c) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but together they shall constitute one and
the same instrument, and facsimile copies of signatures shall be treated as
original signatures for all purposes.
(d) This Agreement is binding on each of the Borrower and Riviera and
their respective successors and assigns and shall inure to the benefit of NBD
and its successors and assigns.
(e) If any provision of this Agreement is in conflict with any
applicable statute or rule of law or otherwise unenforceable, such
offending provision shall be null and void only to the extent of such conflict
or unenforceability, but shall be deemed separate from and shall not invalidate
any other provision of this Agreement.
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(f) Defined terms used in this Agreement without definition shall
have the meanings given to them under the Credit Agreement.
24. NO OTHER PROMISES OR INDUCEMENTS. There are no promises or
inducements which have been made to any signatory hereto to cause such
signatory to enter into this Agreement other than those which are set forth in
this Agreement.
25. WAIVER OF JURY TRIAL AND ACKNOWLEDGMENT. THE PARTIES HERETO
ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT
THIS RIGHT MAY BE WAIVED. NBD, THE BORROWER AND RIVIERA EACH HEREBY KNOWINGLY,
VOLUNTARILY AND WITHOUT COERCION, WAIVE ALL RIGHTS TO A TRIAL BY JURY OF ALL
DISPUTES BETWEEN NBD AND ANY OTHER PARTY HERETO ARISING OUT OF OR IN ANY
RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS OR RELATIONSHIPS BETWEEN THE
PARTIES. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT OF THIS
WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN INSTRUMENT
SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED.
EACH OF THE BORROWER AND RIVIERA ACKNOWLEDGES THAT (1) IT HAS BEEN GIVEN
THE OPPORTUNITY TO CONSULT WITH COUNSEL AND OTHER ADVISORS OF ITS CHOICE AND,
AFTER CONSULTING WITH SUCH COUNSEL AND ADVISORS, KNOWINGLY, VOLUNTARILY AND
WITHOUT DURESS, COERCION, UNLAWFUL RESTRAINT, INTIMIDATION OR COMPULSION,
ENTERS INTO THIS AGREEMENT, BASED UPON SUCH ADVICE AND COUNSEL AND IN THE
EXERCISE OF ITS BUSINESS JUDGMENT, (2) THIS AGREEMENT HAS BEEN ENTERED INTO IN
EXCHANGE FOR GOOD AND VALUABLE CONSIDERATION, RECEIPT OF WHICH THE PARTIES
HERETO ACKNOWLEDGE, (3) IT HAS CAREFULLY AND COMPLETELY READ ALL OF THE TERMS
AND PROVISIONS OF THIS AGREEMENT AND IS NOT RELYING ON THE OPINIONS OR ADVICE
OF NBD OR ITS AGENTS OR REPRESENTATIVES IN ENTERING INTO THIS AGREEMENT.
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26. STATUTE OF FRAUDS. THIS WRITTEN FORBEARANCE AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
NBD BANK
By: [SIG]
-------------------------------
It: Vice President
----------------------------
RIVIERA DIE & TOOL, INC.
By: [SIG]
-------------------------------
Its: C.F.O.
---------------------------
Subscribed and sworn to before me this day of June, 1995.
----
--------------------------
Notary Public, County,
--- ----
My Commission expires:
---------------
RIVIERA TOOL COMPANY
By: [SIG]
-----------------------
Its: C.F.O.
-------------------
Subscribed and sworn to before me this day of June, 1995.
---
-----------------------
Notary Public, County,
---- ---
My Commission expires:
---
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THIRTEENTH AMENDMENT TO CREDIT AGREEMENT
AND RESTATED FORBEARANCE AGREEMENT
NBD Bank, formerly known as NBD Bank, N.A., successor by merger to the
interests of NBD Grand Rapids, N.A. ("NBD" or the "Bank"), Riviera Die & Tool,
Inc. (formerly known as R.D.T., Inc.), a Michigan Corporation (the "Borrower"),
and Riviera Tool Company, a Michigan Corporation ("Riviera") enter into this
Thirteenth Amendment to Credit Agreement and Restated Forbearance Agreement
(the "Agreement") effective as of the 1st day of September, 1995.
RECITALS
A. The Borrower and the Bank entered into a Credit Agreement
dated April 20, 1988, as amended by a First Amendment to Credit Agreement dated
August 31, 1988, a Second Amendment to Credit Agreement dated January 30, 1989,
a Third Amendment to Credit Agreement dated January 30, 1990, a Fourth
Amendment to Credit Agreement dated May 16, 1991, a Fifth Amendment to Credit
Agreement dated July 31, 1992, a Sixth Amendment to Credit Agreement dated
January 31, 1993, a Seventh Amendment to Credit Agreement dated March 31, 1993,
an Eighth Amendment to Credit Agreement dated July 26, 1993, a Ninth Amendment
to Credit Agreement dated March 4, 1994, a Forbearance Agreement dated April
14, 1994 (the "Original Forbearance Agreement"), a Tenth Amendment to Credit
Agreement and Restated Forbearance Agreement dated May 5, 1994, an Eleventh
Amendment to Credit Agreement and Restated Forbearance Agreement dated as of
December 1, 1994, and a Twelfth Amendment to Credit Agreement and Restated
Forbearance Agreement dated as of May 1, 1995 (collectively, the "Credit
Agreement") by which the Bank has made certain credit facilities available to
the Borrower upon the terms and subject to the conditions set forth in the
Credit Agreement.
B. Pursuant to the Credit Agreement, the Borrower has executed two (2)
promissory notes: (i) the Twelfth Amended and Restated Working Capital
Revolving Credit Note in the original principal amount of $9,000,000.00 dated
as of May 1, 1995 (the "Working Capital Revolving Credit Note"); and (ii) a
Third Amended and Restated Term Note in the original principal amount of
$976,962.00 dated as of May 1, 1995 (the "Term Note").
C. In connection with the Credit Agreement, Riviera executed and
delivered to the Bank a Guaranty dated April 20, 1988, pursuant to which, among
other things, Riviera guarantied all of the Borrower's obligations (including
the Obligations as defined below) to the Bank, whether then existing or
thereafter arising or created (the "Riviera Guaranty").
D. In addition, Xxxxxxx Xxxxx ("Xxxxx") and Riviera Holding Company
("Holding") (collectively, Xxxxx and Holding may be hereinafter referred to as
the "Limited Guarantors") each executed and delivered Guaranties and Continuing
Pledge Agreements (the "Limited Guaranty Documents") dated August 4, 1992 and
July 26, 1993.
E. As of September 7, 1995, there was (i) $7,218,442.81 in principal
indebtedness owing by the Borrower under the Working Capital Revolving Credit
Note and (ii) $816,962.00 in principal indebtedness owing by the Borrower
pursuant to the Term Note. These sums,
100
together with accrued but unpaid interest, costs and expenses (including
attorneys' fees), as well as all other present and future obligations of the
Borrower to the Bank, including, but not limited to, obligations arising under
or in connection with the Loan Documents (as defined below) or any other
document executed in connection therewith or subsequent thereto by the Borrower
in favor of the Bank are hereinafter referred to as the "Obligations".
F. On April 20, 1988, the Borrower executed and delivered to NBD a
Security Agreement (Accounts, General Intangibles and Chattel Paper), a
Security Agreement (Inventory) and a Security Agreement (Equipment), as amended
by a First Amendment to each of the above-described Security Agreements dated
January 30, 1989 (the "Borrower Security Agreements") wherein Borrower granted
to NBD a valid, perfected, indefeasible and enforceable first priority lien and
security interest in favor of the Bank in all of the Borrower's present and
future personal property, including, but not limited to, accounts, chattel
paper, general intangibles, documents, instruments, inventory, equipment,
fixtures and all other tangible and intangible personal property and all
proceeds and products thereof with the exception of certain property described
in Section 5.8 of the Credit Agreement. For convenience, all of the collateral
referred to in the Borrower Security Agreements, together with all other
collateral described in and/or granted in connection with any of the Loan
Documents (as hereinafter defined), together with all collateral heretofore,
simultaneously herewith or hereafter granted to the Bank by the Borrower to
secure any of the Borrower's or any other parties' present or future
obligations to the Bank, is collectively referred to as the "Borrower
Collateral".
G. On April 20, 1988, Riviera executed and delivered to NBD a
Security Agreement (Accounts, General Intangibles and Chattel Paper), a
Security Agreement (Inventory) and a Security Agreement (Equipment) (the
"Riviera Security Agreements") wherein Riviera granted to NBD a valid,
perfected, indefeasible and enforceable first priority lien and security
interest in favor of the Bank in all of Riviera's present and future personal
property, including, but not limited to, accounts, chattel paper, general
intangibles, documents, instruments, inventory, equipment, fixtures and all
other tangible and intangible personal property and all proceeds and products
thereof. For convenience, all of the collateral referred to in the Riviera
Security Agreements, together with all other collateral described in and/or
granted in connection with any of the Loan Documents (as hereinafter defined),
together with all collateral heretofore, simultaneously herewith or hereafter
granted to the Bank by Riviera to secure any of Riviera's or any other parties'
present or future obligations to the Bank, is collectively referred to as the
"Riviera Collateral".
H. The Borrower and Riviera acknowledge and agree that (i) the
Obligations are due the Bank without setoff, recoupment, defense or
counterclaim, in law or equity, of any nature or kind; (ii) the Obligations are
secured by valid, perfected, indefeasible, enforceable first priority liens and
security interests (except as permitted by Section 5.8 of the Credit Agreement)
in favor of the Bank in, among other things, (a) all of the Borrower's present
and future personal property, including, without limitation, accounts, chattel
paper, general intangibles, documents, instruments, inventory, equipment,
fixtures and all other tangible and intangible personal property and all
proceeds and products thereof, and (b) all of Riviera's present and future
personal
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property, including, without limitation, accounts, chattel paper, general
intangibles, documents, instruments, inventory, equipment, fixtures and all
other tangible and intangible personal property and all proceeds and products
thereof, and (c) the collateral described in the Limited Guaranty Documents.
For convenience, the Credit Agreement, the Working Capital Revolving Credit
Note, the Term Note (collectively, the "Notes"), the Borrower Security
Agreements, the Riviera Guaranty, the Riviera Security Agreements, the Limited
Guaranty Documents, the Original Forbearance Agreement, this Agreement and any
other document executed therewith or subsequent thereto by the Borrower in
favor of the Bank are hereinafter referred to as the "Loan Documents". For
convenience, all of the Borrower Collateral, the Riviera Collateral and the
collateral referenced in the Limited Guaranty Documents shall hereinafter be
referred to as the "Collateral".
I. The Borrower and Riviera reaffirm, ratify, confirm and approve their
obligations and duties under the Loan Documents as modified by this Agreement.
J. Borrower and Riviera, jointly, jointly and severally and severally,
reaffirm, ratify and confirm the liens, assignments and security interests
granted to NBD under the Loan Documents and confirm that any and all collateral
granted to NBD by any party for the purpose of securing repayment of all or any
part of the Borrower's or Riviera's obligations (including the Obligations)
owed to NBD, including, but not limited to the Collateral, shall constitute and
serve as collateral for any and all of the obligations and duties of the
Borrower and Riviera to NBD (including the Obligations), whether now existing
or hereafter arising.
K. Borrower and Riviera each acknowledge that prior to June 1, 1995,
there were defaults under the Loan Documents as follows (collectively, the
"Existing Defaults"):
(1) The Leverage Ratio of Riviera and the Borrower, determined
on a consolidated basis, is greater than 3 to 1 (3.44 to 1
as of March 31, 1995).
(2) The Working Capital of Riviera and the Borrower, determined
on a consolidated basis, is less than $200,000 (minus
$3,237,000.00 as of March 31, 1995.
(3) The Tangible Net Worth of Riviera and Borrower, determined
on a consolidated basis, is less than $6,000,000 from and
after August 31, 1994 ($5,438,000.00 as of March 31, 1995).
(4) The aggregate principal amount outstanding under the
Working Capital Revolving Credit, has in the past
periodically exceeded the Borrowing Base (the "Borrowing
Base Deficiency").
Borrower and Riviera represent and warrant that, to the best of their
knowledge, after due inquiry and investigation, they are unaware of any other
Events of Default (as defined in the Credit
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Agreement) or defaults under any of the Loan Documents or this Agreement or of
any event that, with the passage of time, notice, or both, would become an
Event of Default or a default under the Loan Documents or this Agreement.
L. Borrower and Riviera also acknowledge that based on the Existing
Defaults, NBD has the right, without further notice, to accelerate all of the
Obligations, demand payment in full and enforce its rights under the Loan
Documents and applicable law.
M. The Borrower and Riviera further acknowledge and agree that the
actions taken by the Bank to date are reasonable and appropriate under the
circumstances, are within NBD's rights under the Loan Documents and applicable
law and do not constitute interference with or control over the business
operations of any of the parties hereto.
N. Borrower and Riviera have requested that NBD continue to forbear
from enforcing its rights and remedies under the Loan Documents and applicable
law for an additional period through November 30, 1995, to afford such parties
an opportunity to consummate a sale of Borrower or its assets which will result
in payment of the Obligations in full. Borrower has represented to NBD that it
has entered into a Letter of Intent with EWI, Inc. dated June 22, 1995; a true
copy of which is attached hereto (which continues in full force and effect as
of the date hereof) to sell substantially all of the assets of Borrower.
Borrower has further represented that it believes this sale will result in
payment in full of the Obligations as well as the known obligations of NBD.
O. Borrower and Riviera had additionally previously requested that the
Bank increase the cap on the Working Capital Facility temporarily from $10
million to $12.5 million to provide Borrower with additional needed working
capital. The period for the temporary increase has expired and the cap is now
$9 million.
P. Borrower and Riviera have additionally requested that the Bank
extend the August 31, 1995 maturity date on the Working Capital Revolving
Credit Note and the Term Note until November 30, 1995.
Q. The Borrower and Riviera acknowledge and agree that (i) NBD has
fully performed all of its obligations under the Loan Documents and all other
agreements between NBD and such parties; (ii) any future loans will be made at
NBD's sole and unfettered discretion; and (iii) NBD has not made any
representations of any kind or nature that funding in any amount will continue
or that the Forbearance Period (as defined in Section 1 below) will be extended
beyond November 30, 1995. NBD HAS INFORMED BORROWER AND RIVIERA THAT IT DOES
NOT INTEND TO EXTEND THE FORBEARANCE PERIOD BEYOND NOVEMBER 30, 1995, AND THAT
THEY SHOULD PAY NBD IN FULL ON OR BEFORE THAT DATE.
NOW, THEREFORE, based on the foregoing Recitals (which are incorporated
in this Agreement as and shall constitute representations, warranties and
covenants of the respective
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parties to this Agreement, as the case may be), and for other good and valuable
consideration, the parties hereto agree as follows:
1. FORBEARANCE. Subject to the following conditions precedent in this
Section 1 and subject to the other terms of this Agreement, NBD agrees to
forbear from enforcing its rights and remedies based on the Existing Defaults,
through the earlier of (i) a further or additional default or Event of Default
under the Loan Documents (including a worsening of the Existing Defaults); (ii)
a default or Event of Default under this Agreement; or (iii) November 30, 1995
(the "Forbearance Period"):
(a) Simultaneously with the execution of this Agreement, receipt
by NBD of an executed Thirteenth Amended and Restated Working Capital Revolving
Credit Note in substantially the form attached hereto as Exhibit 1(a);
(b) Simultaneously with the execution of this Agreement,
receipt by NBD of an executed Fourth Amended and Restated Term Note in
substantially the form attached hereto as Exhibit 1(b);
(c) Simultaneously with the execution of this Agreement,
receipt by NBD of an executed copy of the Reaffirmation and Release
Agreement in substantially the form attached hereto as Exhibit 1(c);
(d) Simultaneously with the execution of this Agreement,
receipt by NBD of a fully-executed copy of this Agreement acknowledged by
counsel to the Borrower and Riviera;
(e) Simultaneously with the execution of this Agreement,
Borrower shall make all payments currently due under the Loan Documents.
(f) NBD receives such other additional documentation necessary
to carry out the intent and purposes of this Agreement.
2. ALL OBLIGATIONS DUE. ALL OF THE OBLIGATIONS INCLUDING, WITHOUT
LIMITATION, OBLIGATIONS UNDER THE CREDIT AGREEMENT, THE WORKING CAPITAL
REVOLVING CREDIT NOTE, THE TERM NOTE AND THIS AGREEMENT SHALL BE DUE AND
PAYABLE ON THE EARLIER OF (i) A DEFAULT, AN EVENT OF DEFAULT OR BREACH OF THE
TERMS AND CONDITIONS OF THIS AGREEMENT, OR (ii) NOVEMBER 30, 1995.
3. NO FURTHER FOBEARANCE IMPLIED. THE BORROWER AND RIVIERA
ACKNOWLEDGE THAT (a) NBD DOES NOT INTEND, NOR DOES NBD HAVE ANY OBLIGATION, TO
EXTEND LOANS, ADVANCES OR OTHER FINANCIAL ACCOMMODATIONS TO THE PARTIES HERETO
BEYOND NOVEMBER 30, 1995, (b) NBD DOES NOT INTEND TO FORBEAR FROM ENFORCING ITS
RIGHTS AND REMEDIES AFTER NOVEMBER 30, 1995, AND NOTHING CONTAINED HEREIN OR
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OTHERWISE IS INTENDED TO BE A PROMISE OR AGREEMENT TO MAKE ADVANCES UNDER THE
WORKING CAPITAL REVOLVING CREDIT NOTE AFTER NOVEMBER 30, 1995 OR TO EXTEND THE
TERMS OF THIS AGREEMENT BEYOND NOVEMBER 30, 1995, (c) ALL OF THE OBLIGATIONS
ARE DUE, ABSENT AN EARLIER DEFAULT UNDER THE LOAN DOCUMENTS, ON OR BEFORE
NOVEMBER 30, 1995 AND (d) NBD INTENDS TO TAKE ANY STEPS NECESSARY TO ASSURE
SATISFACTION OF THE OBLIGATIONS IN FULL BY November 30, 1995 OR AS SOON
THEREAFTER AS POSSIBLE. THE BORROWER, RIVIERA, XXXXX AND HOLDING HAVE BEEN
ADVISED THAT THEY SHOULD PURSUE ALTERNATIVE FINANCING SOURCES.
4. BORROWING BASE DEFICIENCY. Borrower shall at all times comply
with the terms and conditions of the Working Capital Facility and shall not
permit or cause to exist a Borrowing Base Deficiency.
5. COLLATERAL. As noted in the Recitals, Borrower and Riviera have
granted to NBD a valid, perfected, indefeasible, enforceable first priority
lien and security interest in and to all of their respective personal
property (except as permitted by Section 5.8 of the Credit Agreement). As an
accommodation to the Borrower, NBD, from time to time, has executed and filed
UCC-3 partial releases with respect to certain specific equipment.
Notwithstanding the filing of these partial releases, the Borrower hereby
ratifies and grants to NBD a continuing security interest in all of its
personal property, including such equipment referenced in the UCC-3 partial
releases.
6. AMENDMENTS TO CREDIT AGREEMENT.
(a) AMENDMENT TO REVOLVING CREDIT FACILITY.
Article II of the Credit Agreement is hereby amended in its
entirety to read as follows:
ARTICLE II
Working Capital Revolving Credit Facility
2.1 Loan. Subject to all of the terms and conditions hereof,
the Bank may, in its sole and unfettered discretion, lend to the
Borrower from time to time through November 30, 1995, such sums in
multiples of Twenty-Five Thousand Dollars ($25,000.00) as may be
requested from time to time by the Borrower in a manner specified
by the Bank, provided that the aggregate principal amount
outstanding at any time pursuant to the provisions of this Section
2.1 shall not exceed the lesser of Nine Million Dollars
($9,000,000.00) (the "Working Capital Revolving Credit") or the
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Borrowing Base. In the event the principal amount outstanding at
any time shall exceed said amounts, the Borrower shall forthwith
pay to the Bank an amount sufficient to eliminate such excess.
Subject to the terms and conditions of this Agreement, the
Borrower may borrow, prepay pursuant to Section 2.3, and reborrow
under this Section 2.1. Upon the execution of this Agreement,
the Borrower shall execute and deliver to the Bank a revolving
credit demand note in the form of Exhibit 1(a) attached hereto
(the "Twelfth Amended and Restated Working Capital Revolving
Credit Note"), the terms of which are incorporated herein by
reference. All commitments by the Bank on behalf of the Borrower
by way of instrument certification, letter of credit or similar
device shall be considered loans pursuant to this Section 2.1.
2.2 Use of Proceeds. The proceeds of the loans pursuant to
this Article II shall be used to refinance existing revolving
credit debt and to assist with the working capital needs of the
Borrower.
2.3 Payment of Working Capital Revolving Credit Note;
Prepayment. Except as payment of part or all of the principal
amount of the loans outstanding pursuant to this Article II is
sooner required to be made under Section 2.1 or Article VIII
hereof, the full principal amount of the loans outstanding under
this Article II and all accrued interest thereon shall be paid by
Borrower on or before November 30, 1995. The Borrower may prepay
all or any part of the indebtedness under Section 2.1 at any time
without penalty provided any prepayment shall be in a multiple of
One Thousand Dollars ($1,000.00).
2.4 Interest. Except as provided in Article VIII hereof, the
Working Capital Revolving Credit Note shall bear interest at the
annual rate of three percent (3%) over the Prime Rate. Interest
shall be computed daily on the basis of a Three Hundred Sixty
(360) day year and shall be billed to the Borrower monthly based
upon the principal balance outstanding and the actual number of
days in the preceding month. Interest shall be due and payable no
later than the first day of each month.
2.5 Availability Fee. The Borrower agrees to pay to the Bank
an Availability Fee at a rate equal to three-eighths of one
percent (3/8%) per annum on the average daily unused portion of
the Working Capital Revolving Credit for the period from the date
of this Agreement to and including November 30, 1995, and
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thereafter until full payment of the Eleventh Amended and Restated
Working Capital Revolving Credit Note. Accrued availability
fees shall be payable quarterly in arrears on the first day of
each January, April, July and October commencing on the first such
day after the date of this Agreement.
2.6 Facility Fee. The Borrower agrees to pay to the Bank a
facility fee at a rate equal to one-eighth of one percent (1/8%)
per annum on the Working Capital Revolving Credit, whether used or
unused, for the period from the date of this Agreement to and
including November 30, 1995, and thereafter until payment of the
Twelfth Amended and Restated Working Capital Revolving Credit
Note. The facility fee shall be payable quarterly in arrears on
the first day of each January, April, July and October commencing
on the first such day after the date of this Agreement.
(b) AMENDMENT TO TERM LOAN.
(i) Section 3.3 of the Credit Agreement is hereby amended
in its entirety to read as follows:
"3.3 Payment of Term Note; Prepayment. Except as payment of
part or all of the Term Note is sooner required under Section 3.1
or Article VIII, the principal of the Term Note shall be paid in
monthly installments of $40,000 each on the first day of each
month commencing December 1, 1994, and continuing thereafter up to
and including November 1, 1995 and a final payment on November 30,
1995 consisting of the entire remaining outstanding principal
balance of, all accrued interest on, and all other sums due under
the Term Note. The Borrower may prepay at any time all or any
portion of the Term Note without premium or penalty provided that
any prepayments shall be applied to principal last maturing."
7. NEGATIVE COVENANTS. During the Forbearance Period, without the
prior written consent of the Bank, the Borrower and Riviera shall not:
(a) RESTRICTION ON LIENS. Create or permit to be created or
allow to exist any new, additional or expanded lien upon any property or assets
now owned or acquired in the future by the Borrower and Riviera.
(b) RESTRICTION ON INDEBTEDNESS. Create, incur, assume, suffer
to exist, have outstanding or in any manner become liable in respect of any
indebtedness for money other than
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the Obligations or indebtedness incurred in the ordinary course of the business
of the Borrower for necessary materials and services.
(c) CAPITAL ASSET EXPENDITURE. Expend sums for the acquisition
of capital assets, including payments under any new lease of real or personal
property.
(d) SALE AND LEASEBACK. Enter into any new agreement providing
for the leasing by the Borrower of property which has been or is to be sold or
transferred by the Borrower or lessor of the property.
(e) TRANSACTIONS WITH AFFILIATES. Enter into, or permit or
suffer to exist, any transaction or arrangement with any Affiliate, except on
terms which are no less favorable to the Borrower than could be obtained from
persons who are not Affiliates in arm's length transactions.
8. FURTHER IN-PUT.
(a) Borrower shall continue to use its best efforts to arrange
a meeting between representatives of NBD, representatives of Borrower and
appropriate decision-making representatives of Motor Wheel to meet and discuss
the future direction and plans of Borrower prior to the expiration of the
Forbearance Period;
(b) Borrower shall use its best efforts to obtain a written
agreement by Comerica Bank to subordinate any debt and security interest it may
have with Borrower and/or Riviera, in form and substance acceptable to NBD.
(c) Borrower agrees that it will immediately engage a crisis
management consultant for advisory consulting purposes, which consultant must
be acceptable to NBD if NBD, in its sole discretion, requests Borrower retain
such consultant. Borrower agrees that it will, upon such request by NBD, seek
and recommend the immediate approval and engagement of, a crisis management
consultant with management authority, upon board approval and authorization
(which consultant must be acceptable to NBD) and retain such a consultant.
9. NO OVERDRAFTS. Borrower and Riviera agree that they will not
create any overdrafts in any accounts at NBD. Furthermore, Borrower and
Riviera acknowledge and agree that NBD shall not, under any circumstances, be
required to honor any checks or other items presented to NBD for payment for
which there are insufficient available funds in Borrower's account at NBD for
payment and NBD may return any such items so presented. In the event that such
items are not returned, this shall not create any right or expectation that
such overdrafts will be tolerated or permitted in the future.
10. TAXES. Borrower and Riviera represent that they are paying all
taxes on a timely basis except as set forth on Exhibit 2 attached hereto.
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11. EVENTS OF DEFAULT. In addition to any other defaults or Events of
Default contained in any of the Loan Documents, the following shall constitute
an Event of Default under this Agreement and each of the Loan Documents:
(a) any further or additional Events of Default, events of
acceleration or defaults provided for in, any of the Loan Documents (including
a worsening of any of the Existing Defaults for any reason other than the
impact of the restructuring transaction between the Borrower and Xxxxxx
Financial Leasing, Inc. and Banc One Leasing Corporation entered into in April
of 1994);
(b) if any representation or warranty made by Borrower or
Riviera in this Agreement or in connection with the negotiation hereof is
untrue as of the date made or hereafter becomes untrue;
(c) the Borrower and/or Riviera shall at any time fail to
observe, perform or comply with any Dominion of Funds Agreement with NBD;
(d) there shall exist at any time a Borrowing Base Deficiency;
(e) Any lender, supplier, creditor or lessor shall (i)
accelerate any obligations of the Borrower or Riviera, due to a default by
Borrower or Riviera under any agreement with any creditor in excess of $25,000
to such creditor or shall otherwise take any action of any kind or nature to
enforce or begin enforcement of its rights or remedies against Borrower or
Riviera by reason of such default, or (ii) receive from Borrower or Riviera any
prepayments of obligations, any extraordinary payments of outstanding
indebtedness or fees, or fees or interest above the level paid to such creditor
by Borrower or Riviera as of January 1, 1994;
(f) Any creditor, including, but not limited to, any
governmental taxing authority, shall cause a lien to be filed on any of the
Collateral (other than a lien for taxes not yet due and payable); and
(g) the Borrower has not received and delivered to NBD by
November 15, 1995 an executed Purchase Agreement for the sale of substantially
all of the assets of the Borrower or other written commitment for a business
transaction sufficient to satisfy the Obligations in full by November 30, 1995.
12. RELEASE. As of the date hereof, the Borrower and Riviera
represent and warrant that they are aware of, and possess, no claims or
causes of action against the Bank. Notwithstanding this representation and as
further consideration for the agreements and understandings herein, the
Borrower and Riviera, individually, jointly and severally, and on behalf of
each of their respective officers, directors, employees, agents, executors,
successors and assigns, hereby release NBD, its officers, directors, employees,
agents, attorneys, affiliates, subsidiaries, successors and assigns from any
liability, claim, right or cause of action which now exists or hereafter
arises, whether known or unknown, arising from events occurring prior to and
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109
in any way related to facts in existence as of the date hereof. By way of
example and not limitation, the foregoing includes any claims in any way
related to actions taken or omitted to be taken by NBD under the Loan
Documents, or this Agreement and the business relationship with NBD.
13. AUTHORIZATION TO DEBIT ACCOUNT. In the event that any payment
called for by the Loan Documents, this Agreement (or any agreement referred to
or incorporated herein) or any other present or future agreements between NBD
and the Borrower and/or Riviera are not paid when and as called for under the
terms of such agreement, then NBD may debit any of such accounts of the
Borrower and/or Riviera at NBD for such amount. In the event of such a debit,
NBD will use its best efforts to notify the Borrower and/or Riviera of such
debit within two (2) business days. The fact that NBD had debited any of the
accounts of the Borrower and/or Riviera at NBD shall in no way whatsoever waive
or diminish any default for failure to make such payments when and as due.
14. SETOFF. Upon the occurrence of a default, NBD is hereby authorized
at any time and from time to time, without notice to the Borrower or Riviera
(any such notice being expressly waived), to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by NBD to or for the credit or
the account of the Borrower and/or Riviera against any and all of the
Obligations, now or hereafter existing, including those under this Agreement or
the Loan Documents or any of the Notes or any other agreement or instrument,
irrespective of whether or not NBD shall have made any demand under this
Agreement or any Note or otherwise. The Bank agrees to promptly notify the
Borrower and/or Riviera after any such setoff and application provided that the
failure to give such notice shall not affect the validity of such setoff and
application and shall not create any claims or liabilities against NBD. The
rights of NBD under this section shall not require maturity of any indebtedness
and are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which NBD may have.
15. VERIFICATION OF ACCOUNTS/AUDITS. The Borrower and Riviera agree
that NBD, through its employees or authorized agents, shall be permitted to
send a letter to and otherwise contact each of its respective account debtors
to verify account receivable balances. In addition, NBD, an accountant or
accounting firm retained by NBD and other advisors, representatives or agents
of NBD shall be permitted full and complete access to the Borrower's and
Riviera's facilities and books and records to conduct audits as often as NBD
reasonably desires. The reasonable cost of such audits ("Audit Fees"), whether
conducted by NBD (in which case NBD shall be entitled to make a reasonable
charge, plus out-of-pocket costs and expenses), an accountant or accounting
firm retained by NBD or other advisors, representatives or agents of NBD
(including, but not limited to, Xxxxxx Enterprises Inc.) shall be part of the
Obligations and shall be secured by all of the Collateral.
16. EXPENSES, FEES AND COSTS; INDEMNIFICATION. The Borrower and
Riviera, jointly and severally, shall be responsible for the payment of all
fees and out-of-pocket disbursements incurred by NBD, including fees of counsel
and court costs, in any way arising from or in
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110
connection with this Agreement, any of the Collateral, any of the Loan
Documents, any of the Obligations or the business relationship between NBD,
on the one hand, and any one or more of the Borrower, Riviera, Holding or
Xxxxx, on the other hand, including, without limitation, (a) Audit Fees; (b)
all fees and expenses (including recording fees and insurance policy fees) of
NBD and counsel for NBD for the preparation, examination, approval,
negotiation, execution and delivery of, or the closing of any of the
transactions contemplated by, this Agreement or any of the Loan Documents; (c)
all fees and out-of-pocket disbursements incurred by NBD, including attorneys'
fees and accountants' fees, in any way arising from or in connection with any
action taken by NBD to monitor, advise, administer, enforce or collect any of
the Obligations (including under this Agreement and the Loan Documents) or any
other obligations of the Borrower or Riviera, whether joint, joint and several,
or several, under this Agreement, any of the Loan Documents or any other
existing or future document or agreement, or arising from or relating to the
business relationship between NBD, on the one hand, and any one or more of the
Borrower, Riviera, Holding or Xxxxx, on the other hand, including any actions
to lift the automatic stay or to otherwise in any way monitor or participate in
any bankruptcy, reorganization or insolvency proceeding of the Borrower or
Riviera; (d) all expenses and fees (including attorneys' fees) incurred in
relation to, in connection with, in defense of and/or in prosecution of any
litigation instituted by any one or more of the Borrower, Riviera, Holding,
Xxxxx, NBD or any third party against or involving NBD arising from, relating
to, or in connection with any of the Obligations or any Guarantor's
obligations, this Agreement, any of the Collateral, any of the Loan Documents
or the business relationship between NBD, on the one hand, and any one or more
of the Borrower, Riviera, Holding or Xxxxx, on the other hand, including any
so-called "lender liability" action, any claim and delivery or other action for
possession of, or foreclosure on, any of the Collateral, post-judgment
enforcement of any rights or remedies including enforcement of any judgments,
and prosecution of any appeals (whether discretionary or as of right and
whether in connection with pre-judgment or post-judgment matters); (e) all
costs, expenses and fees incurred by NBD or its agents in connection with
appraisals and reappraisals of all or any of the Collateral (and the Borrower
and Riviera shall fully cooperate with such appraisers and make their property
available for appraisal in connection with as many appraisals as NBD may
request); (f) all costs, expenses and fees incurred by NBD and/or its counsel in
connection with consultants, expert witnesses or other professionals retained
by NBD and/or its counsel in order to assist, advise and/or give testimony with
respect to any matter relating to the Collateral, the Loan Documents, or the
business relationship between NBD, on the one hand, and any one or more of the
Borrower, Riviera, Holding or Xxxxx, on the other hand (and the Borrower and
Riviera shall fully cooperate with such consultant, expert witness or other
professional and shall make their premises, books and records, accounting
systems, computer systems and other media for the recordation of information
available to such persons); and (g) all costs, expenses and fees incurred by
NBD in connection with any environmental investigations including but not
limited to Phase I, Phase II and Phase III environmental audits (and the
Borrower and Riviera agree that NBD and/or its agents may enter on their
premises at any time to conduct such environmental investigations). Nothing
contained in this paragraph shall, or is intended to, expand the liability of
Xxxxx and Holding beyond that contained in the Limited Guaranty Documents.
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111
All of the foregoing costs, expenses and reimbursement
obligations, set forth in this section (the "Costs") shall be part of the
Obligations, and shall be secured by all of the Collateral. The costs shall be
paid within 10 days of written request from NBD.
For purposes hereof "Claims" shall mean any demand, claim,
action or cause of action, damage, liability, loss, cost, debt, expense,
obligation, tax, assessment, charge, lawsuit, contract, agreement,
undertaking or deficiency, of any kind or nature, whether known or unknown,
fixed, actual, accrued or contingent, liquidated or unliquidated (including
interest, penalties, attorneys' fees and other costs and expenses incident to
proceedings or investigations relating to any of the foregoing or the defense
of any of the foregoing), whether or not litigation has commenced.
17. OTHER DOCUMENTS. The Borrower, Riviera, Xxxxx and Holding agree to
execute and deliver any and all documents reasonably deemed necessary or
appropriate by NBD or counsel to NBD to carry out the intent of and/or to
implement the Loan Documents or this Agreement, including, but not limited to,
such documentation necessary to grant NBD a lien, mortgage and/or security
interest in any assets of the Borrower and Riviera presently not subject to a
lien, mortgage or encumbrance in favor of NBD to secure the Obligations.
18. CROSS DEFAULT/REMEDIES. An Event of Default under the terms of
this Agreement shall be considered an event of default, an event of
acceleration and a default under each document and agreement comprising the
Loan Documents and an event of default, an event of acceleration or a default
under any document or agreement comprising the Loan Documents, (other than the
Existing Defaults), shall be considered an Event of Default under the terms of
this Agreement, and all of the other Loan Documents. Upon the occurrence of an
Event of Default under this Agreement or any event of default, event of
acceleration or default under any document or agreement comprising the Loan
Documents, or any document executed in connection herewith, or referenced
herein, and without prior notice of or an opportunity to cure such event of
default, event of acceleration or default, except as otherwise provided herein,
(a) NBD shall have the right to exercise any rights or remedies provided in
this Agreement, the Loan Documents, or applicable law, (including, without
limitation, the right to offset any accounts of the Borrower or Riviera with
NBD), (b) NBD may deem the Forbearance Period to be expired, and (c) upon NBD's
election, but without further notice, all of the Obligations shall be
immediately due and payable. IN ANY EVENT, FROM AND AFTER THE CLOSE OF
BUSINESS ON November 30, 1995, NBD MAY IMMEDIATELY TAKE ACTION TO ENFORCE ALL
OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS, THIS AGREEMENT OR
APPLICABLE LAW, INCLUDING, BUT NOT LIMITED TO, COLLECTION OF THE BORROWER'S
OBLIGATIONS.
19. DOCUMENTS CONTINUE. Except as expressly modified and amended by the
terms of this Agreement, all of the terms and conditions of the Loan Documents
remain in full force and effect and are hereby ratified, confirmed and
approved. If there is an express conflict between the terms of this Agreement
and the terms of the Loan Documents, the terms of this Agreement shall govern
and control.
13
112
20. RESERVATION OF RIGHTS/NO WAIVERS. This Agreement grants a
conditional and limited forbearance until November 30, 1995, only, upon the
terms and conditions set forth in this Agreement. Notwithstanding anything to
the contrary in this Agreement, all of NBD's rights and remedies against the
Borrower, Riviera, third parties, and/or the Collateral and/or any rights of
NBD under the Limited Guaranty Documents are expressly reserved, including,
without limitation, all rights and remedies resulting from, or arising in
connection with, the Existing Defaults. Likewise, nothing herein shall be
deemed to constitute a waiver of any defaults existing as of the date hereof, a
further worsening of the Existing Defaults or new events of default, events of
acceleration or defaults or shall in any way prejudice the rights or remedies
of NBD under the Loan Documents or applicable law. Further, NBD shall have the
right to waive any conditions set forth in this Agreement and/or the Loan
Documents, in its sole and unfettered discretion. And any such waiver shall
not prejudice, waive or reduce any other right or remedy which NBD may have
against the Borrower or Riviera, or any rights of NBD under the Limited
Guaranty Documents. However, the other parties to this Agreement and the Loan
Documents, understand that no waiver by NBD of the rights or any condition of
this Agreement and/or the Loan Documents shall be effective unless the same
shall be contained in writing signed by an authorized agent of NBD.
21. CREDIT INQUIRIES. In the event customers, buyers, potential
financing sources or other parties make inquiry of NBD as to the current
lending relationship between NBD, on the one hand, and the Borrower or Riviera,
on the other hand, the parties agree that NBD may refer such inquiries to the
Borrower or Riviera.
22. AUTHORITY. Each party executing this Agreement in a representative
capacity represents and warrants that he or she has authority to execute this
Agreement and legally bind the entity he or she represents.
23. MISCELLANEOUS.
(a) This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof and may be modified or
amended only by a writing signed by the party to be charged.
(b) This Agreement is governed by the internal laws of the
State of Michigan (without regard to conflicts of law principles).
(c) This Agreement may be executed in counterparts, each of
which shall be deemed an original, but together they shall constitute one and
the same instrument, and facsimile copies of signatures shall be treated as
original signatures for all purposes.
(d) This Agreement is binding on each of the Borrower and
Riviera and their respective successors and assigns and shall inure to the
benefit of NBD and its successors and assigns.
14
113
(e) If any provision of this Agreement is in conflict with any
applicable statute or rule of law or otherwise unenforceable, such offending
provision shall be null and void only to the extent of such conflict or
unenforceability, but shall be deemed separate from and shall not invalidate
any other provision of this Agreement.
(f) Defined terms used in this Agreement without definition shall have
the meanings given to them under the Credit Agreement.
24. NO OTHER PROMISES OR INDUCEMENTS. There are no promises or
inducements which have been made to any signatory hereto to cause such
signatory to enter into this Agreement other than those which are set forth in
this Agreement.
25. WAIVER OF JURY TRIAL AND ACKNOWLEDGEMENT. THE PARTIES HERETO
ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT
THIS RIGHT MAY BE WAIVED. NBD, THE BORROWER AND RIVIERA EACH HEREBY KNOWINGLY,
VOLUNTARILY AND WITHOUT COERCION, WAIVE ALL RIGHTS TO A TRIAL BY JURY OF ALL
DISPUTES BETWEEN NBD AND ANY OTHER PARTY HERETO ARISING OUT OF OR IN ANY
RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS OR RELATIONSHIPS BETWEEN THE
PARTIES. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT OF THIS
WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN INSTRUMENT
SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED.
EACH OF THE BORROWER AND RIVIERA ACKNOWLEDGES THAT (1) IT HAS BEEN
GIVEN THE OPPORTUNITY TO CONSULT WITH COUNSEL AND OTHER ADVISORS OF ITS CHOICE
AND, AFTER CONSULTING WITH SUCH COUNSEL AND ADVISORS, KNOWINGLY, VOLUNTARILY
AND WITHOUT DURESS, COERCION, UNLAWFUL RESTRAINT, INTIMIDATION OR COMPULSION,
ENTERS INTO THIS AGREEMENT, BASED UPON SUCH ADVICE AND COUNSEL AND IN THE
EXERCISE OF ITS BUSINESS JUDGMENT, (2) THIS AGREEMENT HAS BEEN ENTERED INTO IN
EXCHANGE FOR GOOD AND VALUABLE CONSIDERATION, RECEIPT OF WHICH THE PARTIES
HERETO ACKNOWLEDGE, (3) IT HAS CAREFULLY AND COMPLETELY READ ALL OF THE TERMS
AND PROVISIONS OF THIS AGREEMENT AND IS NOT RELYING ON THE OPINIONS OR ADVICE
OF NBD OR ITS AGENTS OR REPRESENTATIVES IN ENTERING INTO THIS AGREEMENT.
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114
26. STATUTE OF FRAUDS. THIS WRITTEN FORBEARANCE AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
NBD BANK
By: Xxxxxxx X. Xxxxxxxx
---------------------------------
Its: First Vice President
-----------------------------
RIVIERA DIE & TOOL, INC.
By: Xxxxx X. Xxxxxx
-----------------------------------
Its: CFO
--------------------------------
Subscribed and sworn to before me this day of September, 1995.
-----------------------------------
Notary Public, County,
------- --
My Commission expires:
---------
RIVIERA TOOL COMPANY
By: Xxxxx X. Xxxxxx
---------------------------------
Its: CFO
------------------------------
Subscribed and sworn to before me this day of September, 1995.
----
-----------------------------------
Notary Public, County,
------- --
My Commission expires:
--------
16
115
[RIVIERA PRODUCTION TOOLING GROUP LOGO]
June 29, 1995
Xx. Xxxxxx X. Xxxxxxxxxx
Chairman and CEO
EWI, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxx 00000
RE: Exclusive Letter of Intent to Purchase Assets and Assume Specified
Liabilities of Riviera Production Tooling Group
Dear Xxxxxx:
Enclosed is you June 22, 1995 Exclusive Letter of Intent to Purchase
Assets and Assume Specified Liabilities of Riviera Production Tooling Group.
It has been executed by us conditioned upon this Letter of Addendum being
executed by you and returned by July, 10, 1995. The Letter of Intent is agreed
to and amended as follows:
1. Paragraph 1 has added "and certain other assets which will be
specifically identified in a definitive agreement."
2. Paragraph 2 will read in its entirety, to-wit:
LIABILITIES ASSUMED. Buyer shall assume all liabilities as identified,
including accounts payable, obligations for borrowed money and accrued
liabilities, product and warranty liabilities and purchase orders
accepted in the ordinary course of business including those only
partially reflected in work-in-process on the date of closing.
3. Paragraph 10 has added "notwithstanding the foregoing, the
parties acknowledge that Seller has begun a private placement
financing effort that will not result in any new owners of Seller.
In the event that such financing is successful prior to execution of
the definitive agreement contemplated hereby, Seller may choose to
terminate this letter of intent without any obligation or liability to
Buyer."
Very truly yours,
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
President & CEO
AGREED AND ACCEPTED ON
BEHALF OF BUYER:
By: Xxxxxx X. Xxxxxxxxxx Dated:
--------------------- ------------
Xxxxxx X. Xxxxxxxxxx
Chairman and CEO
116
[EWI INCORPORATED LETTERHEAD]
June 22, 1995
Xx. Xxxxxxx X. Xxxxx
President and CEO
Riviera Production Tooling Group
0000 Xxxxxxxxx Xxxxxxx, XX
Xxxxx Xxxxxx, XX 00000
Re: Exclusive letter of Intent to Purchase Assets and Assume Specified
Liabilities of Riviera Production Tooling Group.
Dear Xxx:
I am pleased to present this exclusive Letter of Intent on behalf of EWI, Inc.
or its designee ("Buyer"), for the purchase by Buyer of all of the assets, and
the assumption by Buyer of specified liabilities, of the Riviera Production
Tooling Group (the "Seller").
1. ASSETS TO BE ACQUIRED. All assets of the Seller as a going concern of
every nature, kind and description, tangible and intangible, whether or not
carried at value on the books of the Seller, including accounts receivable,
inventory, and fixed assets (the "Assets"), but excluding cash.
2. LIABILITIES ASSUMED. Buyer shall assume all liabilities as identified
including accounts payable and accrued liabilities and such other liabilities
as are disclosed to and specifically assumed by Buyer in writing related to the
Sellers' operations.
3. PURCHASE PRICE.
(a) The purchase price for the Assets shall be $6 million plus the
assumption of the specified liabilities. The purchase price shall be paid
in cash plus the assumption of the above specified liabilities.
(b) Buyer will assume the real estate lease on the property and the
personal property leases of Seller.
117
[EWI INCORPORATED LETTERHEAD]
Riviera Tool and Die
Page 2
4. EMPLOYEES OF SELLER.
(a) Buyer and Xxxxxxx X. Xxxxx shall execute an employment agreement
including performance incentives commencing at the closing in form mutually
acceptable.
(b) All other employees shall be hired by Purchaser and retained for a period
of ninety days after the date of closing.
(c) Buyer acknowledges that one of the shareholders f Seller, Motor Wheel
Corporation, an Ohio corporation. designs and builds or has built for its
use or resale to its customers in the ordinary course of its buinsess, tools
and dies of the type produced by the Seller. Since it has been the practice
of this shareholder to acquire such tooling though ourside contractors and
to protect its source therefor with an equity investment, a general covenant
not to compete will not be possible and any restrictions to be placved on
their activity in this field will need to be very carefully negotiated and
delineated.
5. NONCOMPETITION AGREEMENT. At closing the Seller and shareholders of Seller
shall execute a mutually acceptable noncompetition agreement providing that
the Seller shall refrain from competing in any manner with the businesses being
acquired by Buyer.
6. CONDITIONS TO CLOSING. The Buyer's obligation to consummate the acquisition
of the Seller is conditioned upon the following:
(a) Satisfactory results of customary due diligence review.
(b) Satisfactory results of an environmental audit, the cost of which shall
be borne by Buyer.
(c) Continued operations of the Seller in the ordinary course of business
until closing including specifically:
(i) No capital expenditure in excess of $100,000 without prior
consultation with Buyer.
(ii) No material adverse change in the financial condition, property,
business or prospects of the Seller.
(iii) No increase in wages, salaries or benefits except for regularly
scheduled increases about which the Buyer has received prior
notice.
(d) Formal approval of the acquisition transaction by the Buyer's and
Seller's Boards of Directors.
118
[EWI INCORPORATED LETTERHEAD]
Riviera Tool and Die
Page 3
7. DUE DILIGENCE; SCHEDULE OF CLOSING. For a period until September 30, 1995
from and after the date of execution hereof by Seller, Buyer's representatives
shall have unrestricted access during normal business hours and upon reasonable
notice to the premises, personnel, books and records of the Seller for purposes
of conducting our due diligence. Buyer and Seller shall hereafter conduct
negotiations in good faith with a view to consummating the proposed purchase
and sale of the Seller consistent with the terms described herein on or before
September 30, 1995 In furtherance thereof, for a period equivalent to the due
diligence period described above, neither you nor your affiliates or agents
shall conduct negotiations for the sale of the Seller with any other
prospective purchaser thereof unless negotiations between us have terminated.
8. CONFIDENTIALITY. The Buyer and its representatives shall hold in confidence
any and all proprietary, confidential, trade secret and any other nonpublic
information and data relating to the business and affairs of the Seller
heretofore or hereafter furnished or disclosed to any of them in connection
herewith, and neither the Buyer nor its representatives shall disclose any of
the same or use the same for their own purposes without Sellers' prior written
consent or until the same shall have otherwise become general public knowledge,
provided that the Buyer shall have the right to disclose information as
necessary in connection with obtaining financing for the acquisition of the
Seller. In the event that discussions between the Buyer and Seller terminate,
the Buyer and its representatives shall promptly return to Seller any and all
copies of any and all such proprietary, confidential, trade secret and other
nonpublic information in their possession.
9. PUBLIC STATEMENTS. While these matters are progressing and until the Closing
Date, the timing, and to the extent reasonably practicable, the content of all
announcements regarding any aspects of the proposed acquisition of the Seller
shall be mutually agreed upon in advance.
10. EXPENSES. Except as set forth in Paragraph 6 hereof, each party shall bear
and be solely responsible for its own costs and expenses incurred by it in
connection with the transactions described herein.
11. NONBINDING AGREEMENT. Except as provided in paragraphs 7, 8, 9 and 10
hereof, this letter is not intended to constitute a binding agreement between
the Buyer and Seller with respect to the proposed transaction, but rather
tangible indication of each of the parties' desire to proceed towards such
transaction consistent with the terms described herein. It is understood and
agreed that neither party shall have any obligation to the other prior to
execution and delivery of a definitive agreement containing customary
representations, warranties and covenants, except for the obligations
established in paragraphs 7, 8, 9 and 10.
119
[EWI INCORPORATED LETTERHEAD]
Riviera Tool and Die
Page 4
This letter of intent will terminate on June 30, 1995 if not agreed to and
accepted by the Sellers.
If the foregoing is acceptable to you, please indicate the same by executing
and returning the enclosed counterpart of this letter.
Agreed and accepted on behalf of the Seller:
as amended by conditional letter of acceptance of June 29, 1995:
By: Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
President and CEO
Date: June 29, 1995
------------------
EWI, INC.
By: Xxxxxx X. Xxxxxxxxxx
--------------------
Xxxxxx X. Xxxxxxxxxx
Chairman & CEO
Date: 6/23/95
-------------------
120
FOURTEENTH AMENDMENT TO CREDIT AGREEMENT
AND RESTATED FORBEARANCE AGREEMENT
NBD Bank, formerly known as NBD Bank, N.A., successor by merger to the
interests of NBD Grand Rapids, N.A. ("NBD" or the "Bank"), Riviera Die & Tool,
Inc. (formerly known as R.D.T., Inc.), a Michigan Corporation (the "Borrower"),
and Riviera Tool Company, a Michigan Corporation ("Riviera") enter into this
Fourteenth Amendment to Credit Agreement and Restated Forbearance Agreement
(the "Agreement") effective as of the 1st day of January, 1996.
RECITALS
A. The Borrower and the Bank entered into a Credit Agreement dated
April 20, 1988, as amended by a First Amendment to Credit Agreement dated
August 31, 1988, a Second Amendment to Credit Agreement dated January 30, 1989,
a Third Amendment to Credit Agreement dated January 30, 1990, a Fourth
Amendment to Credit Agreement dated May 16, 1991, a Fifth Amendment to
Credit Agreement dated July 31, 1992, a Sixth Amendment to Credit Agreement
dated January 31, 1993, a Seventh Amendment to Credit Agreement dated March 31,
1993, an Eighth Amendment to Credit Agreement dated July 26, 1993, a Ninth
Amendment to Credit Agreement dated March 4, 1994, a Forbearance Agreement
dated April 14, 1994 (the "Original Forbearance Agreement"), a Tenth Amendment
to Credit Agreement and Restated Forbearance Agreement dated May 5, 1994, an
Eleventh Amendment to Credit Agreement and Restated Forbearance Agreement dated
as of December 1, 1994, and a Twelfth Amendment to Credit Agreement and
Restated Forbearance Agreement dated as of May 1, 1995 and a Thirteenth
Amendment to Credit Agreement and Restated Forbearance Agreement dated as of
September 1, 1995 (collectively, the "Credit Agreement") by which the Bank has
made certain credit facilities available to the Borrower upon the terms and
subject to the conditions set forth in the Credit Agreement.
B. Pursuant to the Credit Agreement, the Borrower has executed two (2)
promissory notes: (i) the Thirteenth Amended and Restated Working Capital
Revolving Credit Note in the original principal amount of $9,000,000.00
dated as of September 1, 1995 (the "Working Capital Revolving Credit Note");
and (ii) a Fourth Amended and Restated Term Note in the original principal
amount of $816,962.00 dated as of September 1, 1995 (the "Term Note").
C. In connection with the Credit Agreement, Riviera executed and
delivered to the Bank a Guaranty dated April 20, 1988, pursuant to which, among
other things, Riviera guarantied all of the Borrower's obligations (including
the Obligations as defined below) to the Bank, whether then existing or
thereafter arising or created (the "Riviera Guaranty").
D. In addition, Xxxxxxx Xxxxx ("Xxxxx") and Riviera Holding Company
("Holding") (collectively, Xxxxx and Holding may be hereinafter referred to as
the "Limited Guarantors") each executed and delivered Guaranties and Continuing
Pledge Agreements (the "Limited Guaranty Documents") dated August 4, 1992 and
July 26, 1993.
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E. As of January 24, 1996, there was (i) $8,556,624.26 in principal
indebtedness owing by the Borrower under the Working Capital Revolving
Credit Note and (ii) $696,962.00 in principal indebtedness owing by the
Borrower pursuant to the Term Note. These sums, together with accrued but
unpaid interest, costs and expenses (including attorneys' fees), as well as all
other present and future obligations of the Borrower to the Bank, including,
but not limited to, obligations arising under or in connection with the Loan
Documents (as defined below) or any other document executed in connection
therewith or subsequent thereto by the Borrower in favor of the Bank are
hereinafter referred to as the "Obligations".
F. On April 20, 1988, the Borrower executed and delivered to NBD a
Security Agreement (Accounts, General Intangibles and Chattel Paper), a
Security Agreement (Inventory) and a Security Agreement (Equipment), as amended
by a First Amendment to each of the above-described Security Agreements dated
January 30, 1989 (the "Borrower Security Agreements") wherein Borrower granted
to NBD a valid, perfected, indefeasible and enforceable first priority lien and
security interest in favor of the Bank in all of the Borrower's present and
future personal property, including, but not limited to, accounts, chattel
paper, general intangibles, documents, instruments, inventory, equipment,
fixtures and all other tangible and intangible personal property and all
proceeds and products thereof with the exception of certain property described
in Section 5.8 of the Credit Agreement. For convenience, all of the collateral
referred to in the Borrower Security Agreements, together with all other
collateral described in and/or granted in connection with any of the Loan
Documents (as hereinafter defined), together with all collateral heretofore,
simultaneously herewith or hereafter granted to the Bank by the Borrower to
secure any of the Borrower's or any other parties' present or future
obligations to the Bank, is collectively referred to as the "Borrower
Collateral".
G. On April 20, 1988, Riviera executed and delivered to NBD a Security
Agreement (Accounts, General Intangibles and Chattel Paper), a Security
Agreement (Inventory) and a Security Agreement (Equipment) (the "Riviera
Security Agreements") wherein Riviera granted to NBD a valid, perfected,
indefeasible and enforceable first priority lien and security interest in favor
of the Bank in all of Riviera's present and future personal property,
including, but not limited to, accounts, chattel paper, general intangibles,
documents, instruments, inventory, equipment, fixtures and all other tangible
and intangible personal property and all proceeds and products thereof. For
convenience, all of the collateral referred to in the Riviera Security
Agreements, together with all other collateral described in and/or granted in
connection with any of the Loan Documents (as hereinafter defined), together
with all collateral heretofore, simultaneously herewith or hereafter granted to
the Bank by Riviera to secure any of Riviera's or any other parties' present or
future obligations to the Bank, is collectively referred to as the "Riviera
Collateral".
H. The Borrower and Riviera acknowledge and agree that (i) the
Obligations are due the Bank without setoff, recoupment, defense or
counterclaim, in law or equity, of any nature or kind; (ii) the Obligations are
secured by valid, perfected, indefeasible, enforceable first priority
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liens and security interests (except as permitted by Section 5.8 of the Credit
Agreement) in favor of the Bank in, among other things, (a) all of the
Borrower's present and future personal property, including, without limitation,
accounts, chattel paper, general intangibles, documents, instruments,
inventory, equipment, fixtures and all other tangible and intangible personal
property and all proceeds and products thereof, and (b) all of Riviera's
present and future personal property, including, without limitation, accounts,
chattel paper, general intangibles, documents, instruments, inventory,
equipment, fixtures and all other tangible and intangible personal property and
all proceeds and products thereof, and (c) the collateral described in the
Limited Guaranty Documents. For convenience, the Credit Agreement, the Working
Capital Revolving Credit Note, the Term Note (collectively, the "Notes"), the
Borrower Security Agreements, the Riviera Guaranty, the Riviera Security
Agreements, the Limited Guaranty Documents, the Original Forbearance Agreement,
this Agreement and any other document executed therewith or subsequent thereto
by the Borrower in favor of the Bank are hereinafter referred to as the "Loan
Documents". For convenience, all of the Borrower Collateral, the Riviera
Collateral and the collateral referenced in the Limited Guaranty Documents
shall hereinafter be referred to as the "Collateral".
I. The Borrower and Riviera reaffirm, ratify, confirm and approve their
obligations and duties under the Loan Documents as modified by this
Agreement.
J. Borrower and Riviera, jointly, jointly and severally and severally,
reaffirm, ratify and confirm the liens, assignments and security interests
granted to NBD under the Loan Documents and confirm that any and all collateral
granted to NBD by any party for the purpose of securing repayment of all or any
part of the Borrower's or Riviera's obligations (including the Obligations)
owed to NBD, including, but not limited to the Collateral, shall constitute and
serve as collateral for any and all of the obligations and duties of the
Borrower and Riviera to NBD (including the Obligations), whether now existing
or hereafter arising.
K. Borrower and Riviera each acknowledge that prior to November 1, 1995,
there were defaults under the Loan Documents as follows (collectively, the
"Existing Defaults"):
(1) The Working Capital of Riviera and the Borrower, determined on
a consolidated basis, is less than $200,000 (minus $3,083,000 as
of October 31, 1995.
(2) As of December 28, 1995, the aggregate principal amount
outstanding under the Working Capital Revolving Credit, exceeded
the Borrowing Base by ($222,000) (the "Borrowing Base
Deficiency").
Borrower and Riviera represent and warrant that, to the best of their
knowledge, after due inquiry and investigation, they are unaware of any other
Events of Default (as defined in the Credit
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Agreement) or defaults under any of the Loan Documents or this Agreement or of
any event that, with the passage of time, notice, or both, would become an
Event of Default or a default under the Loan Documents or this Agreement.
L. Borrower and Riviera also acknowledge that based on the Existing
Defaults, NBD has the right, without further notice, to accelerate all of the
Obligations, demand payment in full and enforce its rights under the Loan
Documents and applicable law.
M. Borrower and Riviera further acknowledge and agree that the actions
taken by the Bank to date are reasonable and appropriate under the
circumstances, are within NBD's rights under the Loan Documents and applicable
law and do not constitute interference with or control over the business
operations of any of the parties hereto.
N. Borrower and Riviera have requested that NBD continue to forbear from
enforcing its rights and remedies under the Loan Documents and applicable
law for an additional period through June 30, 1996, to afford such parties an
opportunity to consummate a sale of Borrower or its assets or refinancing from
one or more third parties which will result in payment of the Obligations in
full. Borrower has represented to NBD that it has entered into a Letter of
Intent with EWI, Inc. dated June 22, 1995 (which continues in full force and
effect as of the date hereof) to sell substantially all of the assets of
Borrower and is continuing negotiations for the sale of Borrower. Borrower has
further represented that it believes these efforts will result in payment in
full of the Obligations as well as the obligations of New Leap Corporation,
Leap Technologies, Inc. and Riviera Plastic Products Company to NBD.
0. Borrower and Riviera have additionally requested that the Bank extend
the November 30, 1995 maturity date on the Working Capital Revolving Credit
Note and the Term Note until June 30, 1996.
P. The Borrower and Riviera acknowledge and agree that (i) NBD has fully
performed all of its obligations under the Loan Documents and all other
agreements between NBD and such parties; (ii) any future loans will be made at
NBD's sole and unfettered discretion; and (iii) NBD has not made any
representations of any kind or nature that funding in any amount will continue
or that the Forbearance Period (as defined in Section 1 below) will be extended
beyond June 30,1996. NBD HAS INFORMED BORROWER AND RIVIERA THAT IT DOES NOT
INTEND TO EXTEND THE FORBEARANCE PERIOD BEYOND JUNE 30, 1996, AND THAT THEY
SHOULD PAY NBD IN FULL ON OR BEFORE THAT DATE. NBD HAS ADVISED THE PARTIES
THAT FROM AND AFTER JUNE 30,1996, NBD MAY TAKE ANY AND ALL STEPS TO SATISFY THE
OBLIGATIONS INCLUDING, BUT NOT LIMITED TO, ENFORCEMENT PROCEEDINGS, CESSATION
OF ADVANCES OR REDUCTION OF ADVANCE RATES UNDER THE BORROWING BASE, REDUCTION
IN THE CAP ON THE WORKING CAPITAL REVOLVING
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CREDIT, INCREASED INTEREST RATES AND FEES OR SUCH OTHER ACTIONS AS
NBD MAY, IN ITS SOLE DISCRETION, DEEM APPROPRIATE.
NOW, THEREFORE, based on the foregoing Recitals (which are incorporated
in this Agreement as and shall constitute representations, warranties and
covenants of the respective parties to this Agreement, as the case may be), and
for other good and valuable consideration, the parties hereto agree as follows:
1. FORBEARANCE. Subject to the following conditions precedent in this
Section 1 and subject to the other terms of this Agreement, NBD agrees to
forbear from enforcing its rights and remedies based on the Existing Defaults,
through the earlier of (i) a further or additional default or Event of Default
under the Loan Documents (including a worsening of the Existing Defaults); (ii)
a default or Event of Default under this Agreement; or (iii) June 30, 1996 (the
"Forbearance Period"):
(a) Simultaneously with the execution of this Agreement, receipt by
NBD of an executed Fourteenth Amended and Restated Working Capital Revolving
Credit Note in substantially the form attached hereto as Exhibit 1(a);
(b) Simultaneously with the execution of this Agreement, receipt by
NBD of an executed Fifth Amended and Restated Term Note in substantially the
form attached hereto as Exhibit 1(b);
(c) Simultaneously with the execution of this Agreement, receipt by
NBD of an executed copy of the Reaffirmation and Release Agreement in
substantially the form attached hereto as Exhibit 1(c);
(d) Simultaneously with the execution of this Agreement, receipt by
NBD of a fully-executed copy of this Agreement acknowledged by counsel to the
Borrower and Riviera;
(e) Simultaneously with the execution of this Agreement,
Borrower shall make all payments currently due under the Loan Documents.
(f) NBD receives such other additional documentation necessary to
carry out the intent and purposes of this Agreement.
2. ALL OBLIGATIONS DUE. ALL OF THE OBLIGATIONS INCLUDING, WITHOUT
LIMITATION, OBLIGATIONS UNDER THE CREDIT AGREEMENT, THE WORKING CAPITAL
REVOLVING CREDIT NOTE, THE TERM NOTE AND THIS AGREEMENT SHALL BE DUE AND
PAYABLE ON THE EARLIER OF (i) A DEFAULT, AN EVENT OF DEFAULT OR BREACH OF THE
TERMS AND CONDITIONS OF THIS AGREEMENT, OR (ii) JUNE 30, 1996.
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3. NO FURTHER FORBEARANCE IMPLIED. THE BORROWER AND RIVIERA ACKNOWLEDGE
THAT (a) NBD DOES NOT INTEND, NOR DOES NBD HAVE ANY OBLIGATION, TO EXTEND
LOANS, ADVANCES OR OTHER FINANCIAL ACCOMMODATIONS TO THE PARTIES HERETO BEYOND
JUNE 30, 1996, (b) NBD DOES NOT INTEND TO FORBEAR FROM ENFORCING ITS RIGHTS AND
REMEDIES AFTER JUNE 30, 1996, AND NOTHING CONTAINED HEREIN OR OTHERWISE IS
INTENDED TO BE A PROMISE OR AGREEMENT TO MAKE ADVANCES UNDER THE WORKING
CAPITAL REVOLVING CREDIT NOTE AFTER JUNE 30, 1996 OR TO EXTEND THE TERMS OF
THIS AGREEMENT BEYOND JUNE 30, 1996, (c) ALL OF THE OBLIGATIONS ARE DUE, ABSENT
AN EARLIER DEFAULT UNDER THE LOAN DOCUMENTS, ON OR BEFORE JUNE 30, 1996, AND (d)
NBD INTENDS TO TAKE ANY STEPS NECESSARY TO ASSURE SATISFACTION OF THE
OBLIGATIONS IN FULL BY JUNE 30, 1995 OR AS SOON THEREAFTER AS POSSIBLE. THE
BORROWER, RIVIERA, XXXXX AND HOLDING HAVE BEEN ADVISED THAT THEY SHOULD PURSUE
ALTERNATIVE FINANCING SOURCES.
4. BORROWING BASE DEFICIENCY. From the date of this Agreement through
February 15, 1996, Borrower shall not permit or cause the Borrowing Base
Deficiency to increase. Anything to the contrary herein, notwithstanding, by
February 15, 1996, the Borrowing Base deficiency shall be reduced to $0 and
shall remain at $0 for all times thereafter.
5. CONTROLLED DISBURSEMENT. Borrower's controlled disbursement account at
NBD shall be closed immediately.
6. COLLATERAL. As noted in the Recitals, Borrower and Riviera have
granted to NBD a valid, perfected, indefeasible, enforceable first priority
lien and security interest in and to all of their respective personal property
(except as permitted by Section 5.8 of the Credit Agreement). As an
accommodation to the Borrower, NBD, from time to time, has executed and filed
UCC-3 partial releases with respect to certain specific equipment.
Notwithstanding the filing of these partial releases, the Borrower hereby
ratifies and grants to NBD a continuing security interest in all of its
personal property, including such equipment referenced in the UCC-3 partial
releases.
7. AMENDMENTS TO CREDIT AGREEMENT.
(a) AMENDMENT TO REVOLVING CREDIT FACILITY.
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(i) The definition "Acceptable Accounts Receivable" in
Article 1 of the Credit Agreement is hereby amended in its entirety to
read as follows:
"'Acceptable Accounts Receivable' shall mean those trade accounts
receivable of the Borrower, valued at the face amount thereof, other
than those accounts receivable that are (a) more than 120 days past
due; (b) due from any Affiliate of the Borrower, except that for
periods of during which an agreement pursuant to Section 7.1 (j) hereof
is in effect, accounts receivable from Motor Wheel Corporation shall
not be excluded by reason of this subsection (b), (c) subject to any
known offset, (d) related to goods or services sold which have been
rejected or with respect to which the amount is in dispute, (e)
payable by any person located outside the United States or Canada, or
(f) reasonably deemed by the Bank to be otherwise unacceptable.
Notwithstanding the foregoing, the Bank may, upon request by the
Borrower and at the Bank's sole discretion, allow inclusion of
accounts receivable that are more than 120 days past due as Acceptable
Accounts Receivable (the "Extended Accounts"). In no event shall
borrowing availability based on the Extended Accounts include accounts
receivable over 180 days past due, or exceed the aggregate amount of
Four Hundred Thousand Dollars ($400,000) from the date hereof through
April 30, 1996, provided that such $400,000 cap show shall be reduced
by $25,000 each month beginning May 1, 1996 and on the first day of
each month thereafter.
(ii) Article II of the Credit Agreement is hereby amended in its
entirety to read as follows:
"ARTICLE II
Working Capital Revolving Credit Facility
2.1 Loan. Subject to all of the terms and conditions hereof,
the Bank may, in its sole and unfettered discretion, lend to the
Borrower from time to time through June 30, 1996, such sums in
multiples of Twenty-Five Thousand Dollars ($25,000.00) as may
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be requested from time to time by the Borrower in a manner specified
by the Bank, provided that the aggregate principal amount outstanding
at any time pursuant to the provisions of this Section 2.1 shall not
exceed the lesser of Nine Million Five Hundred Thousand Dollars
($9,500,000.00) (the "Working Capital Revolving Credit") or the
Borrowing Base. In the event the principal amount outstanding at any
time shall exceed said amounts, the Borrower shall forthwith pay to
the Bank an amount sufficient to eliminate such excess. Subject to
the terms and conditions of this Agreement, the Borrower may borrow,
prepay pursuant to Section 2.3, and reborrow under this Section 2.1.
Upon the execution of this Agreement, the Borrower shall execute and
deliver to the Bank a revolving credit demand note in the form of
Exhibit 1(a) attached hereto (the "Fourteenth Amended and Restated
Working Capital Revolving Credit Note"), the terms of which are
incorporated herein by reference. All commitments by the Bank on
behalf of the Borrower by way of instrument certification, letter of
credit or similar device shall be considered loans pursuant to this
Section 2.1.
2.2 Use of Proceeds. The proceeds of the loans pursuant to
this Article II shall be used to refinance existing revolving credit
debt and to assist with the working capital needs of the Borrower.
2.3 Payment of Working Capital Revolving Credit Note;
Prepayment. Except as payment of part or all of the principal amount
of the loans outstanding pursuant to this Article II is sooner
required to be made under Section 2.1 or Article VIII hereof, the full
principal amount of the loans outstanding under this Article II and
all accrued interest thereon shall be paid by Borrower on or before
June 30, 1996. The Borrower may prepay all or any part of the
indebtedness under Section 2.1 at any time without penalty provided
any prepayment shall be in a multiple of One Thousand Dollars
($1,000.00).
2.4 Interest. Except as provided in Article VIII hereof, the
Working Capital Revolving Credit Note shall bear interest at the
annual rate of four percent (4%) over the Prime Rate from and after
January 1, 1996. Interest shall be computed daily on the basis of a
Three Hundred Sixty (360) day year and shall be billed to the Borrower
monthly based upon the principal balance outstanding and
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the actual number of days in the preceding month. Interest shall be
due and payable no later than the first day of each month.
2.5 Availability Fee. The Borrower agrees to pay to the
Bank an Availability Fee at a rate equal to three-eighths of one
percent (3/8%) per annum on the average daily unused portion of
the Working Capital Revolving Credit for the period from the date of
this Agreement to and including June 30, 1996, and thereafter until
full payment of the Eleventh Amended and Restated Working Capital
Revolving Credit Note. Accrued availability fees shall be payable
quarterly in arrears on the first day of each January, April, July and
October commencing on the first such day after the date of this
Agreement.
2.6 Facility Fee. The Borrower agrees to pay to the Bank a
facility fee at a rate equal to one-eighth of one percent (1/8%) per
annum on the Working Capital Revolving Credit, whether used or
unused, for the period from the date of this Agreement to and
including June 30, 1996, and thereafter until payment of the
Fourteenth Amended and Restated Working Capital Revolving Credit Note.
The facility fee shall be payable quarterly in arrears on the first
day of each January, April, July and October commencing on the first
such day after the date of this Agreement.
(b) AMENDMENTS TO TERM LOAN.
(iii) Section 3.3 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"3.3 Payment of Term Note; Prepayment. Except as payment of part
or all of the Term Note is sooner required under Section 3.1 or
Article VIII, the principal of the Term Note shall be paid in monthly
installments of $40,000 each on the first day of each month commencing
February 1, 1996, and continuing thereafter up to and including
June 1, 1996 and a final payment on June 30, 1996 consisting of the
entire remaining outstanding principal balance of, all accrued
interest on, and all other sums due under the Term Note. The Borrower
may prepay at any time all or any portion of the Term Note without
premium or penalty provided that any prepayments shall be applied to
principal last maturing."
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(iv) Section 3.4 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"3.4. Interest. Except as provided in Article 8 hereof, the
Term Note shall bear interest at the annual rate of the prime rate
plus 4% from and after January 1, 1996. Interest shall be computed
daily on the basis of a three hundred sixty (360) day year and shall
be billed to the Borrower monthly based upon the principal balance
outstanding in the actual number of days elapsed. Interest shall be
billed to the Borrower monthly beginning February 1, 1996 and shall be
due and payable as indicated by such billing. Xxxxxxxx may estimate
a rate and balance for periods between the billing date and the end of
the period which is covered by such billing and if actual rates and
balances vary from the estimate, actual charges shall be adjusted and
reflected in subsequent xxxxxxxx.
8. NEGATIVE COVENANTS. During the Forbearance Period, without the prior
written consent of the Bank, the Borrower and Riviera shall not:
(a) RESTRICTION ON LIENS. Create or permit to be created or allow to
exist any new, additional or expanded lien upon any property or assets now
owned or acquired in the future by the Borrower and Riviera.
(b) RESTRICTION ON INDEBTEDNESS. Create, incur, assume, suffer to
exist, have outstanding or in any manner become liable in respect of any
indebtedness for money other than the Obligations or indebtedness incurred in
the ordinary course of the business of the Borrower for necessary materials and
services.
(c) CAPITAL ASSET EXPENDITURE. Expend sums for the acquisition of
capital assets, including payments under any new lease of real or personal
property.
(d) SALE AND LEASEBACK. Enter into any new agreement providing for
the leasing by the Borrower of property which has been or is to be sold or
transferred by the Borrower or lessor of the property.
(e) TRANSACTIONS WITH AFFILIATES. Enter into, or permit or suffer to
exist, any transaction or arrangement with any Affiliate, except on terms which
are no less favorable to the Borrower than could be obtained from persons who
are not Affiliates in arm's length transactions.
9. NO OVERDRAFTS. Borrower and Riviera agree that they will not create
any overdrafts in any accounts at NBD. Furthermore, Borrower and Riviera
acknowledge and agree
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that NBD shall not, under any circumstances, be required to honor any checks or
other items presented to NBD for payment for which there are insufficient
available funds in Borrower's account at NBD for payment and NBD may return any
such items so presented. In the event that such items are not returned, this
shall not create any right or expectation that such overdrafts will be
tolerated or permitted in the future.
10. TAXES. Borrower and Riviera represent that they are paying all taxes
on a timely basis except as set forth on Exhibit 11 attached hereto.
11. EVENTS OF DEFAULT. In addition to any other defaults or Events of
Default contained in any of the Loan Documents, the following shall constitute
an Event of Default under this Agreement and each of the Loan Documents:
(a) any further or additional Events of Default, events of
acceleration or defaults provided for in any of the Loan Documents (including a
worsening of any of the Existing Defaults for any reason other than the impact
of the restructuring transaction between the Borrower and Xxxxxx Financial
Leasing, Inc. and Banc One Leasing Corporation entered into in April of 1994);
(b) if any representation or warranty made by Borrower or Riviera in
this Agreement or in connection with the negotiation hereof is untrue as of the
date made or hereafter becomes untrue;
(c) the Borrower and/or Riviera shall at any time fail to observe,
perform or comply with any Dominion of Funds Agreement with NBD;
(d) the Borrowing Base Deficiency increases prior to February 15,
1996, or after February 15, 1996, there shall exist at any time a Borrowing Base
Deficiency;
(e) Any lender, supplier, creditor or lessor shall (i) accelerate any
obligations of the Borrower or Riviera, due to a default by Borrower or Riviera
under any agreement with any creditor in excess of $25,000 to such creditor or
shall otherwise take any action of any kind or nature to enforce or begin
enforcement of its rights or remedies against Borrower or Riviera by reason of
such default, or (ii) receive from Borrower or Riviera any prepayments of
obligations, any extraordinary payments of outstanding indebtedness or fees, or
fees or interest above the level paid to such creditor by Borrower or Riviera as
of January 1, 1994;
(f) Any creditor, including, but not limited to, any governmental
taxing authority, shall cause a lien to be filed on any of the Collateral (other
than a lien for taxes not yet due and payable); and
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12. RELEASE. As of the date hereof, the Borrower and Riviera represent and
warrant that they are aware of, and possess, no claims or causes of action
against the Bank. Notwithstanding this representation and as further
consideration for the agreements and understandings herein, the Borrower and
Riviera, individually, jointly and severally, and on behalf of each of their
respective officers, directors, employees, agents, executors, successors and
assigns, hereby release NBD, its officers, directors, employees, agents,
attorneys, affiliates, subsidiaries, successors and assigns from any liability,
claim, right or cause of action which now exists or hereafter arises, whether
known or unknown, arising from events occurring prior to and in any way related
to facts in existence as of the date hereof. By way of example and not
limitation, the foregoing includes any claims in any way related to actions
taken or omitted to be taken by NBD under the Loan Documents, or this Agreement
and the business relationship with NBD.
13. AUTHORIZATION TO DEBIT ACCOUNT. In the event that any payment called
for by the Loan Documents, this Agreement (or any agreement referred to or
incorporated herein) or any other present or future agreements between NBD or
any of its affiliates and the Borrower and/or Riviera are not paid when and as
called for under the terms of such agreement, then NBD may debit any of such
accounts of the Borrower and/or Riviera at NBD or any of its affiliates for such
amount. In the event of such a debit, NBD or any of its affiliates will use its
best efforts to notify the Borrower and/or Riviera of such debit within two (2)
business days. The fact that NBD or any of its affiliates had debited any of
the accounts of the Borrower and/or Riviera at NBD or any of its affiliates
shall in no way whatsoever waive or diminish any default for failure to make
such payments when and as due.
14. SETOFF. Upon the occurrence of a default, NBD is hereby authorized at
any time and from time to time, without notice to the Borrower or Riviera (any
such notice being expressly waived), to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by NBD to or for the credit or the account
of the Borrower and/or Riviera against any and all of the Obligations, now or
hereafter existing, including those under this Agreement or the Loan Documents
or any of the Notes or any other agreement or instrument, irrespective of
whether or not NBD shall have made any demand under this Agreement or any Note
or otherwise. The Bank agrees to promptly notify the Borrower and/or Riviera
after any such setoff and application provided that the failure to give such
notice shall not affect the validity of such setoff and application and shall
not create any claims or liabilities against NBD. The rights of NBD under this
section shall not require maturity of any indebtedness and are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which NBD may have.
15. VERIFICATION OF ACCOUNTS/AUDITS. The Borrower and Riviera agree that
NBD, through its employees or authorized agents, shall be permitted to send a
letter to and otherwise contact each of its respective account debtors to verify
account receivable balances. In addition, NBD, an accountant or accounting firm
retained by NBD and other advisors, representatives or
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agents of NBD shall be permitted full and complete access to the Borrower's and
Riviera's facilities and books and records to conduct audits as often as NBD
reasonably desires. The reasonable cost of such audits ("Audit Fees"), whether
conducted by NBD (in which case NBD shall be entitled to make a reasonable
charge, plus out-of-pocket costs and expenses), an accountant or accounting firm
retained by NBD or other advisors, representatives or agents of NBD (including,
but not limited to, Xxxxxx Enterprises Inc.) shall be part of the Obligations
and shall be secured by all of the Collateral.
16. EXPENSES, FEES AND COSTS; INDEMNIFICATION. The Borrower and Riviera,
jointly and severally, shall be responsible for the payment of all fees and
out-of-pocket disbursements incurred by NBD, including fees of counsel and court
costs, in any way arising from or in connection with this Agreement, any of the
Collateral, any of the Loan Documents, any of the Obligations or the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand, including, without limitation, (a)
Audit Fees; (b) all fees and expenses (including recording fees and insurance
policy fees) of NBD and counsel for NBD for the preparation, examination,
approval, negotiation, execution and delivery of, or the closing of any of the
transactions contemplated by, this Agreement or any of the Loan Documents; (c)
all fees and out-of-pocket disbursements incurred by NBD, including attorneys'
fees and accountants' fees, in any way arising from or in connection with any
action taken by NBD to monitor, advise, administer, enforce or collect any of
the Obligations (including under this Agreement and the Loan Documents) or any
other obligations of the Borrower or Riviera, whether joint, joint and several,
or several, under this Agreement, any of the Loan Documents or any other
existing or future document or agreement, or arising from or relating to the
business relationship between NBD, on the one hand, and any one or more of the
Borrower, Riviera, Holding or Xxxxx, on the other hand, including any actions to
lift the automatic stay or to otherwise in any way monitor or participate in any
bankruptcy, reorganization or insolvency proceeding of the Borrower or Riviera;
(d) all expenses and fees (including attorneys' fees) incurred in relation to,
in connection with, in defense of and/or in prosecution of any litigation
instituted by any one or more of the Borrower, Riviera, Holding, Xxxxx, NBD or
any third party against or involving NBD arising from, relating to, or in
connection with any of the Obligations or any Guarantor's obligations, this
Agreement, any of the Collateral, any of the Loan Documents or the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand, including any so-called "lender
liability" action, any claim and delivery or other action for possession of, or
foreclosure on, any of the Collateral, post-judgment enforcement of any rights
or remedies including enforcement of any judgments, and prosecution of any
appeals (whether discretionary or as of right and whether in connection with
pre-judgment or post-judgment matters); (e) all costs, expenses and fees
incurred by NBD or its agents in connection with appraisals and reappraisals of
all or any of the Collateral (and the Borrower and Riviera shall fully cooperate
with such appraisers and make their property available for appraisal in
connection with as many appraisals as NBD may request); (f) all costs, expenses
and fees incurred by NBD and/or its counsel in connection with consultants,
expert witnesses or other professionals retained by NBD and/or its counsel in
order to assist, advise
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and/or give testimony with respect to any matter relating to the Collateral, the
Loan Documents, or the business relationship between NBD, on the one hand, and
any one or more of the Borrower, Riviera, Holding or Xxxxx, on the other hand
(and the Borrower and Riviera shall fully cooperate with such consultant, expert
witness or other professional and shall make their premises, books and records,
accounting systems, computer systems and other media for the recordation of
information available to such persons); and (g) all costs, expenses and fees
incurred by NBD in connection with any environmental investigations including
but not limited to Phase I, Phase II and Phase III environmental audits (and the
Borrower and Riviera agree that NBD and/or its agents may enter on their
premises at any time to conduct such environmental investigations). Nothing
contained in this paragraph shall, or is intended to, expand the liability of
Xxxxx and Holding beyond that contained in the Limited Guaranty Documents.
All of the foregoing costs, expenses and reimbursement obligations,
set forth in this section (the "Costs") shall be part of the Obligations, and
shall be secured by all of the Collateral. The costs shall be paid within 10
days of written request from NBD.
For purposes hereof "Claims" shall mean any demand, claim, action or
cause of action, damage, liability, loss, cost, debt, expense, obligation, tax,
assessment, charge, lawsuit, contract, agreement, undertaking or deficiency, of
any kind or nature, whether known or unknown, fixed, actual, accrued or
contingent, liquidated or unliquidated (including interest, penalties,
attorneys' fees and other costs and expenses incident to proceedings or
investigations relating to any of the foregoing or the defense of any of the
foregoing), whether or not litigation has commenced.
17. OTHER DOCUMENTS. The Borrower and Riviera agree to execute and deliver
any and all documents reasonably deemed necessary or appropriate by NBD or
counsel to NBD to carry out the intent of and/or to implement the Loan Documents
or this Agreement, including, but not limited to, such documentation necessary
to grant NBD a lien, mortgage and/or security interest in any assets of the
Borrower and Riviera presently not subject to a lien, mortgage or encumbrance in
favor of NBD to secure the Obligations.
18. CROSS DEFAULT/REMEDIES. An Event of Default under the terms of this
Agreement shall be considered an event of default, an event of acceleration and
a default under each document and agreement comprising the Loan Documents and an
event of default, an event of acceleration or a default under any document or
agreement comprising the Loan Documents, (other than the Existing Defaults),
shall be considered an Event of Default under the terms of this Agreement, and
all of the other Loan Documents. Upon the occurrence of an Event of Default
under this Agreement or any event of default, event of acceleration or default
under any document or agreement comprising the Loan Documents, or any document
executed in connection herewith, or referenced herein, and without prior notice
of or an opportunity to cure such event of default, event of acceleration or
default, except as otherwise provided herein, (a) NBD shall have the right to
exercise any rights or remedies provided in this Agreement, the Loan
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Documents, or applicable law, (including, without limitation, the right to
offset any accounts of the Borrower or Riviera with NBD), (b) NBD may deem the
Forbearance Period to be expired, and (c) upon NBD's election, but without
further notice, all of the Obligations shall be immediately due and payable. IN
ANY EVENT, FROM AND AFTER THE CLOSE OF BUSINESS ON JUNE 30, 1996, NBD MAY
IMMEDIATELY TAKE ACTION TO ENFORCE ALL OF ITS RIGHTS AND REMEDIES UNDER THE LOAN
DOCUMENTS, THIS AGREEMENT OR APPLICABLE LAW, INCLUDING, BUT NOT LIMITED TO,
COLLECTION OF THE BORROWER'S OBLIGATIONS.
19. DOCUMENTS CONTINUE. Except as expressly modified and amended by the
terms of this Agreement, all of the terms and conditions of the Loan Documents
remain in full force and effect and are hereby ratified, confirmed and
approved. If there is an express conflict between the terms of this Agreement
and the terms of the Loan Documents, the terms of this Agreement shall govern
and control.
20. RESERVATION OF RIGHTS/NO WAIVERS. This Agreement grants a conditional
and limited forbearance until June 30, 1996, only, upon the terms and conditions
set forth in this Agreement. Notwithstanding anything to the contrary in this
Agreement, all of NBD's rights and remedies against the Borrower, Riviera, third
parties, and/or the Collateral and/or any rights of NBD under the Limited
Guaranty Documents are expressly reserved, including, without limitation, all
rights and remedies resulting from, or arising in connection with, the Existing
Defaults. Likewise, nothing herein shall be deemed to constitute a waiver of
any defaults existing as of the date hereof, a further worsening of the Existing
Defaults or new events of default, events of acceleration or defaults or shall
in any way prejudice the rights or remedies of NBD under the Loan Documents or
applicable law. Further, NBD shall have the right to waive any conditions set
forth in this Agreement and/or the Loan Documents, in its sole and unfettered
discretion. And any such waiver shall not prejudice, waive or reduce any other
right or remedy which NBD may have against the Borrower or Riviera, or any
rights of NBD under the Limited Guaranty Documents. However, the other parties
to this Agreement and the Loan Documents, understand that no waiver by NBD of
the rights or any condition of this Agreement and/or the Loan Documents shall be
effective unless the same shall be contained in writing signed by an authorized
agent of NBD.
21. CREDIT INQUIRIES. In the event customers, buyers, potential financing
sources or other parties make inquiry of NBD as to the current lending
relationship between NBD, on the one hand, and the Borrower or Riviera, on the
other hand, the parties agree that NBD may refer such inquiries to the Borrower
or Riviera.
22. AUTHORITY. Each party executing this Agreement in a representative
capacity represents and warrants that he or she has authority to execute this
Agreement and legally bind the entity he or she represents.
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23. MISCELLANEOUS.
(a) This Agreement constitutes the entire understanding of the parties
with respect to the subject matter hereof and may be modified or amended only by
a writing signed by the party to be charged.
(b) This Agreement is governed by the internal laws of the State of
Michigan (without regard to conflicts of law principles).
(c) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but together they shall constitute one and the same
instrument, and facsimile copies of signatures shall be treated as original
signatures for all purposes.
(d) This Agreement is binding on each of the Borrower and Riviera and
their respective successors and assigns and shall inure to the benefit of NBD
and its successors and assigns.
(e) If any provision of this Agreement is in conflict with any
applicable statute or rule of law or otherwise unenforceable, such offending
provision shall be null and void only to the extent of such conflict or
unenforceability, but shall be deemed separate from and shall not invalidate any
other provision of this Agreement.
(f) Defined terms used in this Agreement without definition shall have
the meanings given to them under the Credit Agreement.
24. NO OTHER PROMISES OR INDUCEMENTS. There are no promises or inducements
which have been made to any signatory hereto to cause such signatory to enter
into this Agreement other than those which are set forth in this Agreement.
25. WAIVER OF JURY TRIAL AND ACKNOWLEDGEMENT. THE PARTIES HERETO
ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT
THIS RIGHT MAY BE WAIVED. NBD, THE BORROWER AND RIVIERA EACH HEREBY KNOWINGLY,
VOLUNTARILY AND WITHOUT COERCION, WAIVE ALL RIGHTS TO A TRIAL BY JURY OF ALL
DISPUTES BETWEEN NBD AND ANY OTHER PARTY HERETO ARISING OUT OF OR IN ANY
RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS OR RELATIONSHIPS BETWEEN THE
PARTIES. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT OF THIS
WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN INSTRUMENT
SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED.
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EACH OF THE BORROWER AND RIVIERA ACKNOWLEDGES THAT (1) IT HAS BEEN
GIVEN THE OPPORTUNITY TO CONSULT WITH COUNSEL AND OTHER ADVISORS OF ITS CHOICE
AND, AFTER CONSULTING WITH SUCH COUNSEL AND ADVISORS, KNOWINGLY, VOLUNTARILY AND
WITHOUT DURESS, COERCION, UNLAWFUL RESTRAINT, INTIMIDATION OR COMPULSION, ENTERS
INTO THIS AGREEMENT, BASED UPON SUCH ADVICE AND COUNSEL AND IN THE EXERCISE OF
ITS BUSINESS JUDGMENT, (2) THIS AGREEMENT HAS BEEN ENTERED INTO IN EXCHANGE FOR
GOOD AND VALUABLE CONSIDERATION, RECEIPT OF WHICH THE PARTIES HERETO
ACKNOWLEDGE, (3) IT HAS CAREFULLY AND COMPLETELY READ ALL OF THE TERMS AND
PROVISIONS OF THIS AGREEMENT AND IS NOT RELYING ON THE OPINIONS OR ADVICE OF NBD
OR ITS AGENTS OR REPRESENTATIVES IN ENTERING INTO THIS AGREEMENT.
26. STATUTE OF FRAUDS. THIS WRITTEN FORBEARANCE AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
NBD BANK
By: Xxxxxxx X. Xxxxxxxx
---------------------------
Its: Vice President
-----------------------
[Signatures continue on following pages]
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[Signatures continued from previous page]
RIVIERA DIE & TOOL, INC.
By: Xxxxx X. Xxxxxx
------------------------------
Its: C.F.O.
----------------------------
Subscribed and sworn to before me this ____ day of February, 1996.
Xxxxx X. Xxxxxxxx
---------------------------
Notary Public, Kent County, Michigan
My Commission Expires Oct. 5, 2000
RIVIERA TOOL COMPANY
By: Xxxxx X. Xxxxxx
------------------------------
Its: C.F.O.
----------------------------
Subscribed and sworn to before me this 9th day of February, 1996.
Xxxxx X. Xxxxxxxx
---------------------------
Notary Public, Kent County, Michigan
My Commission Expires Oct. 5, 2000
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138
FIFTEENTH AMENDMENT TO CREDIT AGREEMENT
AND RESTATED FORBEARANCE AGREEMENT
NBD Bank, formerly known as NBD Bank, N.A., successor by merger to the
interests of NBD Grand Rapids, N.A. ("NBD" or the "Bank"), Riviera Die & Tool,
Inc. (formerly known as R.D.T., Inc.), a Michigan Corporation (the "Borrower"),
and Riviera Tool Company, a Michigan Corporation ("Riviera") enter into this
Fourteenth Amendment to Credit Agreement and Restated Forbearance Agreement (the
"Agreement") effective as of the 1st day of April, 1996.
RECITALS
A. The Borrower and the Bank entered into a Credit Agreement dated April
20, 1988, as amended by a First Amendment to Credit Agreement dated August 31,
1988, a Second Amendment to Credit Agreement dated January 30, 1989, a Third
Amendment to Credit Agreement dated January 30, 1990, a Fourth Amendment to
Credit Agreement dated May 16, 1991, a Fifth Amendment to Credit Agreement dated
July 31, 1992, a Sixth Amendment to Credit Agreement dated January 31, 1993, a
Seventh Amendment to Credit Agreement dated March 31, 1993, an Eighth Amendment
to Credit Agreement dated July 26, 1993, a Ninth Amendment to Credit Agreement
dated March 4, 1994, a Forbearance Agreement dated April 14, 1994 (the "Original
Forbearance Agreement"), a Tenth Amendment to Credit Agreement and Restated
Forbearance Agreement dated May 5, 1994, an Eleventh Amendment to Credit
Agreement and Restated Forbearance Agreement dated as of December 1, 1994, and a
Twelfth Amendment to Credit Agreement and Restated Forbearance Agreement dated
as of May 1, 1995, a Thirteenth Amendment to Credit Agreement and Restated
Forbearance Agreement dated as of September 1, 1995, and a Fourteenth Amendment
to Credit Agreement and Restated Forbearance Agreement effective as of January
1, 1996 (collectively, the "Credit Agreement") by which the Bank has made
certain credit facilities available to the Borrower upon the terms and subject
to the conditions set forth in the Credit Agreement.
B. Pursuant to the Credit Agreement, the Borrower has executed two (2)
promissory notes: (i) the Fourteenth Amended and Restated Working Capital
Revolving Credit Note in the original principal amount of $9,000,000.00 dated as
of January 1, 1996 (the "Working Capital Revolving Credit Note"); and (ii) a
Fifth Amended and Restated Term Note in the original principal amount of
$816,962.00 dated as of January 1, 1996 (the "Term Note").
C. In connection with the Credit Agreement, Riviera executed and
delivered to the Bank a Guaranty dated April 20, 1988, pursuant to which, among
other things, Riviera guarantied all of the Borrower's obligations (including
the Obligations as defined below) to the Bank, whether then existing or
thereafter arising or created (the "Riviera Guaranty").
D. In addition, Xxxxxxx Xxxxx ("Xxxxx") and Riviera Holding Company
("Holding") (collectively, Xxxxx and Holding may be hereinafter referred to as
the "Limited Guarantors") each
139
executed and delivered Guaranties and Continuing Pledge Agreements (the "Limited
Guaranty Documents") dated August 4, 1992 and July 26, 1993.
E. As of March 25, 1996, there was (i) $9,688,762.66 in principal
indebtedness owing by the Borrower under the Working Capital Revolving Credit
Note and (ii) $576,962.00 in principal indebtedness owing by the Borrower
pursuant to the Term Note. These sums, together with accrued but unpaid
interest, costs and expenses (including attorneys' fees), as well as all other
present and future obligations of the Borrower to the Bank, including, but not
limited to, obligations arising under or in connection with the Loan Documents
(as defined below) or any other document executed in connection therewith or
subsequent thereto by the Borrower in favor of the Bank are hereinafter referred
to as the "Obligations".
F. On April 20, 1988, the Borrower executed and delivered to NBD a
Security Agreement (Accounts, General Intangibles and Chattel Paper), a
Security Agreement (Inventory) and a Security Agreement (Equipment), as amended
by a First Amendment to each of the above-described Security Agreements dated
January 30, 1989 (the "Borrower Security Agreements") wherein Borrower granted
to NBD a valid, perfected, indefeasible and enforceable first priority lien and
security interest in favor of the Bank in all of the Borrower's present and
future personal property, including, but not limited to, accounts, chattel
paper, general intangibles, documents, instruments, inventory, equipment,
fixtures and all other tangible and intangible personal property and all
proceeds and products thereof with the exception of certain property described
in Section 5.8 of the Credit Agreement. For convenience, all of the collateral
referred to in the Borrower Security Agreements, together with all other
collateral described in and/or granted in connection with any of the Loan
Documents (as hereinafter defined), together with all collateral heretofore,
simultaneously herewith or hereafter granted to the Bank by the Borrower to
secure any of the Borrower's or any other parties' present or future
obligations to the Bank, is collectively referred to as the "Borrower
Collateral".
G. On April 20, 1988, Riviera executed and delivered to NBD a Security
Agreement (Accounts, General Intangibles and Chattel Paper), a Security
Agreement (Inventory) and a Security Agreement (Equipment) (the "Riviera
Security Agreements") wherein Riviera granted to NBD a valid, perfected,
indefeasible and enforceable first priority lien and security interest in favor
of the Bank in all of Riviera's present and future personal property, including,
but not limited to, accounts, chattel paper, general intangibles, documents,
instruments, inventory, equipment, fixtures and all other tangible and
intangible personal property and all proceeds and products thereof. For
convenience, all of the collateral referred to in the Riviera Security
Agreements, together with all other collateral described in and/or granted in
connection with any of the Loan Documents (as hereinafter defined), together
with all collateral heretofore, simultaneously herewith or hereafter granted to
the Bank by Riviera to secure any of Riviera's or any other parties' present or
future obligations to the Bank, is collectively referred to as the "Riviera
Xxxxxxxxxx".
0
000
X. The Borrower and Riviera acknowledge and agree that (i) the
Obligations are due the Bank without setoff, recoupment, defense or
counterclaim, in law or equity, of any nature or kind; (ii) the Obligations are
secured by valid, perfected, indefeasible, enforceable first priority liens and
security interests (except as permitted by Section 5.8 of the Credit Agreement)
in favor of the Bank in, among other things, (a) all of the Borrower's present
and future personal property, including, without limitation, accounts, chattel
paper, general intangibles, documents, instruments, inventory, equipment,
fixtures and all other tangible and intangible personal property and all
proceeds and products thereof, and (b) all of Riviera's present and future
personal property, including, without limitation, accounts, chattel paper,
general intangibles, documents, instruments, inventory, equipment, fixtures and
all other tangible and intangible personal property and all proceeds and
products thereof, and (c) the collateral described in the Limited Guaranty
Documents. For convenience, the Credit Agreement, the Working Capital Revolving
Credit Note, the Term Note (collectively, the "Notes"), the Borrower Security
Agreements, the Riviera Guaranty, the Riviera Security Agreements, the Limited
Guaranty Documents, the Original Forbearance Agreement, this Agreement and any
other document executed therewith or subsequent thereto by the Borrower in favor
of the Bank are hereinafter referred to as the "Loan Documents". For
convenience, all of the Borrower Collateral, the Riviera Collateral and the
collateral referenced in the Limited Guaranty Documents shall hereinafter be
referred to as the "Collateral".
I. The Borrower and Riviera reaffirm, ratify, confirm and approve their
obligations and duties under the Loan Documents as modified by this Agreement.
J. Borrower and Riviera, jointly, jointly and severally and severally,
reaffirm, ratify and confirm the liens, assignments and security interests
granted to NBD under the Loan Documents and confirm that any and all collateral
granted to NBD by any party for the purpose of securing repayment of all or any
part of the Borrower's or Riviera's obligations (including the Obligations) owed
to NBD, including, but not limited to the Collateral, shall constitute and serve
as collateral for any and all of the obligations and duties of the Borrower and
Riviera to NBD (including the Obligations), whether now existing or hereafter
arising.
K. Borrower and Riviera each acknowledge that prior to November 1,
1995, there were defaults under the Loan Documents as follows (collectively, the
"Existing Defaults"):
(1) The Working Capital of Riviera and the Borrower,
determined on a consolidated basis, is less than $200,000 (minus
$3,083,000 as of October 31, 1995.
(2) As of December 28, 1995, the aggregate principal amount
outstanding under the Working Capital Revolving Credit,
exceeded the Borrowing Base by ($222,000) (the "Borrowing Base
Deficiency").
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Borrower and Riviera represent and warrant that, to the best of their knowledge,
after due inquiry and investigation, they are unaware of any other Events of
Default (as defined in the Credit Agreement) or defaults under any of the Loan
Documents or this Agreement or of any event that, with the passage of time,
notice, or both, would become an Event of Default or a default under the Loan
Documents or this Agreement.
L. Borrower and Riviera also acknowledge that based on the Existing
Defaults, NBD has the right, without further notice, to accelerate all of the
Obligations, demand payment in full and enforce its rights under the Loan
Documents and applicable law.
M. Borrower and Riviera further acknowledge and agree that the actions
taken by the Bank to date are reasonable and appropriate under the
circumstances, are within NBD's rights under the Loan Documents and applicable
law and do not constitute interference with or control over the business
operations of any of the parties hereto.
N. Borrower and Riviera have requested that NBD continue to forbear from
enforcing its rights and remedies under the Loan Documents and applicable law
for an additional period through June 30, 1996, to afford such parties an
opportunity to consummate a sale of Borrower or its assets or refinancing from
one or more third parties which will result in payment of the Obligations in
full. Borrower has represented to NBD that it has entered into a Letter of
Intent with EWI, Inc. dated June 22, 1995 (which continues in full force and
effect as of the date hereof) to sell substantially all of the assets of
Borrower and is continuing negotiations for the sale of Borrower. Borrower has
further represented that it believes these efforts will result in payment in
full of the Obligations as well as the obligations of New Leap Corporation, Leap
Technologies, Inc. and Riviera Plastic Products Company to NBD.
O. Borrower and Riviera have additionally requested that the Bank extend
the November 30, 1995 maturity date on the Working Capital Revolving Credit Note
and the Term Note until June 30, 1996.
P. The Borrower and Riviera acknowledge and agree that (i) NBD has fully
performed all of its obligations under the Loan Documents and all other
agreements between NBD and such parties; (ii) any future loans will be made at
NBD's sole and unfettered discretion; and (iii) NBD has not made any
representations of any kind or nature that funding in any amount will continue
or that the Forbearance Period (as defined in Section 1 below) will be extended
beyond June 30, 1996. NBD HAS INFORMED BORROWER AND RIVIERA THAT IT DOES NOT
INTEND TO EXTEND THE FORBEARANCE PERIOD BEYOND JUNE 30, 1996, AND THAT THEY
SHOULD PAY NBD IN FULL ON OR BEFORE THAT DATE. NBD HAS ADVISED THE PARTIES THAT
FROM AND AFTER JUNE 30, 1996, NBD MAY TAKE ANY AND ALL STEPS TO SATISFY THE
OBLIGATIONS INCLUDING, BUT NOT LIMITED TO, ENFORCEMENT PROCEEDINGS, CESSATION OF
ADVANCES OR REDUCTION OF ADVANCE RATES UNDER THE BORROWING
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BASE, REDUCTION IN THE CAP ON THE WORKING CAPITAL REVOLVING CREDIT, INCREASED
INTEREST RATES AND FEES OR SUCH OTHER ACTIONS AS NBD MAY, IN ITS SOLE
DISCRETION, DEEM APPROPRIATE,
NOW, THEREFORE, based on the foregoing Recitals (which are incorporated in
this Agreement as and shall constitute representations, warranties and covenants
of the respective parties to this Agreement, as the case may be), and for other
good and valuable consideration, the parties hereto agree as follows:
1. FORBEARANCE. Subject to the following conditions precedent in this
Section 1 and subject to the other terms of this Agreement, NBD agrees to
forbear from enforcing its rights and remedies based on the Existing Defaults,
through the earlier of (i) a further or additional default or Event of Default
under the Loan Documents (including a worsening of the Existing Defaults); (ii)
a default or Event of Default under this Agreement; or (iii) June 30, 1996 (the
"Forbearance Period"):
(a) Simultaneously with the execution of this Agreement, receipt by
NBD of an executed Fifteenth Amended and Restated Working Capital Revolving
Credit Note in substantially the form attached hereto as Exhibit 1(a);
(b) Simultaneously with the execution of this Agreement, receipt by
NBD of an executed copy of the Reaffirmation and Release Agreement in
substantially the form attached hereto as Exhibit 1(c);
(c) Simultaneously with the execution of this Agreement, receipt by
NBD of a fully-executed copy of this Agreement acknowledged by counsel to the
Borrower and Riviera;
(d) Simultaneously with the execution of this Agreement, Borrower
shall make all payments currently due under the Loan Documents.
(e) NBD receives such other additional documentation necessary to
carry out the intent and purposes of this Agreement.
2. ALL OBLIGATIONS DUE. ALL OF THE OBLIGATIONS INCLUDING, WITHOUT
LIMITATION, OBLIGATIONS UNDER THE CREDIT AGREEMENT, THE WORKING CAPITAL
REVOLVING CREDIT NOTE, THE TERM NOTE AND THIS AGREEMENT SHALL BE DUE AND PAYABLE
ON THE EARLIER OF (i) A DEFAULT, AN EVENT OF DEFAULT OR BREACH OF THE TERMS AND
CONDITIONS OF THIS AGREEMENT, OR (ii) JUNE 30, 1996.
3. NO FURTHER FORBEARANCE IMPLIED. THE BORROWER AND RIVIERA ACKNOWLEDGE
THAT (a) NBD DOES NOT INTEND, NOR DOES NBD HAVE ANY
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143
OBLIGATION, TO EXTEND LOANS, ADVANCES OR OTHER FINANCIAL ACCOMMODATIONS TO THE
PARTIES HERETO BEYOND JUNE 30, 1996, (b) NBD DOES NOT INTEND TO FORBEAR FROM
ENFORCING ITS RIGHTS AND REMEDIES AFTER JUNE 30, 1996, AND NOTHING CONTAINED
HEREIN OR OTHERWISE IS INTENDED TO BE A PROMISE OR AGREEMENT TO MAKE ADVANCES
UNDER THE WORKING CAPITAL REVOLVING CREDIT NOTE AFTER JUNE 30, 1996 OR TO EXTEND
THE TERMS OF THIS AGREEMENT BEYOND JUNE 30, 1996, (c) ALL OF THE OBLIGATIONS ARE
DUE, ABSENT AN EARLIER DEFAULT UNDER THE LOAN DOCUMENTS, ON OR BEFORE JUNE 30,
1996, AND (d) NBD INTENDS TO TAKE ANY STEPS NECESSARY TO ASSURE SATISFACTION OF
THE OBLIGATIONS IN FULL BY JUNE 30, 1995 OR AS SOON THEREAFTER AS POSSIBLE. THE
BORROWER, RIVIERA, XXXXX AND HOLDING HAVE BEEN ADVISED THAT THEY SHOULD PURSUE
ALTERNATIVE FINANCING SOURCES.
4. COLLATERAL. As noted in the Recitals, Borrower and Riviera have
granted to NBD a valid, perfected, indefeasible, enforceable first priority lien
and security interest in and to all of their respective personal property
(except as permitted by Section 5.8 of the Credit Agreement). As an
accommodation to the Borrower, NBD, from time to time, has executed and filed
UCC-3 partial releases with respect to certain specific equipment.
Notwithstanding the filing of these partial releases, the Borrower hereby
ratifies and grants to NBD a continuing security interest in all of its personal
property, including such equipment referenced in the UCC-3 partial releases.
5. AMENDMENTS TO CREDIT AGREEMENT.
(i) Section 2.1 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"2.1 Loan. Subject to all of the terms and conditions hereof,
the Bank may, in its sole and unfettered discretion, lend to the
Borrower from time to time through June 30, 1996, such sums in
multiples of Twenty-Five Thousand Dollars ($25,000.00) as may be
requested from time to time by the Borrower in a manner specified by
the Bank, provided that the aggregate principal amount outstanding at
any time pursuant to the provisions of this Section 2.1 shall not
exceed the lesser of (a) through and including May 31, 1996, Ten
Million Five Hundred Thousand Dollars ($10,500,000.00) and (b)
commencing June 1, 1996 and continuing thereafter, Nine Million
Dollars ($9,000,000.00) (the "Working Capital Revolving Credit") or
the Borrowing Base. In the event the principal amount outstanding at
any time shall exceed said amounts, the Borrower shall forthwith pay
to the Bank an amount
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144
sufficient to eliminate such excess. Subject to the terms and
conditions of this Agreement, the Borrower may borrow, prepay
pursuant to Section 2.3, and reborrow under this Section 2.1. Upon the
execution of this Agreement, the Borrower shall execute and deliver to
the Bank a revolving credit demand note in the form of Exhibit 1(a)
attached hereto (the "Fifteenth Amended and Restated Working Capital
Revolving Credit Note"), the terms of which are incorporated herein by
reference. All commitments by the Bank on behalf of the Borrower by
way of instrument certification, letter of credit or similar device
shall be considered loans pursuant to this Section 2.1."
6. NEGATIVE COVENANTS. During the Forbearance Period, without the prior
written consent of the Bank, the Borrower and Riviera shall not:
(a) RESTRICTION ON LIENS. Create or permit to be created or allow to
exist any new, additional or expanded lien upon any property or assets now owned
or acquired in the future by the Borrower and Riviera.
(b) RESTRICTION ON INDEBTEDNESS. Create, incur, assume, suffer to
exist, have outstanding or in any manner become liable in respect of any
indebtedness for money other than the Obligations or indebtedness incurred in
the ordinary course of the business of the Borrower for necessary materials and
services.
(c) CAPITAL ASSET EXPENDITURE. Expend sums for the acquisition of
capital assets, including payments under any new lease of real or personal
property.
(d) SALE AND LEASEBACK. Enter into any new agreement providing for
the leasing by the Borrower of property which has been or is to be sold or
transferred by the Borrower or lessor of the property.
(e) TRANSACTIONS WITH AFFILIATES. Enter into, or permit or suffer to
exist, any transaction or arrangement with any Affiliate, except on terms which
are no less favorable to the Borrower than could be obtained from persons who
are not Affiliates in arm's length transactions.
7. NO OVERDRAFTS. Borrower and Riviera agree that they will not create
any overdrafts in any accounts at NBD. Furthermore, Borrower and Riviera
acknowledge and agree that NBD shall not, under any circumstances, be required
to honor any checks or other items presented to NBD for payment for which there
are insufficient available funds in Borrower's account at NBD for payment and
NBD may return any such items so presented. In the event that
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such items are not returned, this shall not create any right or expectation
that such overdrafts will be tolerated or permitted in the future.
8. TAXES. Borrower and Riviera represent that they are paying all
taxes on a timely basis except as set forth on Exhibit 9 attached hereto.
9. EVENTS OF DEFAULT. In addition to any other defaults or Events of
Default contained in any of the Loan Documents, the following shall constitute
an Event of Default under this Agreement and each of the Loan Documents:
(a) any further or additional Events of Default, events of
acceleration or defaults provided for in any of the Loan Documents (including a
worsening of any of the Existing Defaults for any reason other than the impact
of the restructuring transaction between the Borrower and Xxxxxx Financial
Leasing, Inc. and Banc One Leasing Corporation entered into in April of 1994);
(b) if any representation or warranty made by Borrower or Riviera
in this Agreement or in connection with the negotiation hereof is untrue as of
the date made or hereafter becomes untrue;
(c) the Borrower and/or Riviera shall at any time fail to observe,
perform or comply with any Dominion of Funds Agreement with NBD;
(d) there shall exist at any time a Borrowing Base Deficiency;
(e) any lender, supplier, creditor or lessor shall (i) accelerate any
obligations of the Borrower or Riviera, due to a default by Borrower or Riviera
under any agreement with any creditor in excess of $25,000 to such creditor or
shall otherwise take any action of any kind or nature to enforce or begin
enforcement of its rights or remedies against Borrower or Riviera by reason of
such default, or (ii) receive from Borrower or Riviera any prepayments of
obligations, any extraordinary payments of outstanding indebtedness or fees, or
fees or interest above the level paid to such creditor by Borrower or Riviera
as of January 1, 1994;
(f) any creditor, including, but not limited to, any governmental
taxing authority, shall cause a lien to be filed on any of the Collateral
(other than a lien for taxes not yet due and payable); and
10. RELEASE. As of the date hereof, the Borrower and Riviera represent
and warrant that they are aware of, and possess, no claims or causes of action
against the Bank. Notwithstanding this representation and as further
consideration for the agreements and understandings herein, the Borrower and
Riviera, individually, jointly and severally, and on behalf of each of their
respective officers, directors, employees, agents, executors, successors and
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assigns, hereby release NBD, its officers, directors, employees, agents,
attorneys, affiliates, subsidiaries, successors and assigns from any liability,
claim, right or cause of action which now exists or hereafter arises, whether
known or unknown, arising from events occurring prior to and in any way related
to facts in existence as of the date hereof. By way of example and not
limitation, the foregoing includes any claims in any way related to actions
taken or omitted to be taken by NBD under the Loan Documents, or this Agreement
and the business relationship with NBD.
11. AUTHORIZATION TO DEBIT ACCOUNT. In the event that any payment
called for by the Loan Documents, this Agreement (or any agreement referred to
or incorporated herein) or any other present or future agreements between NBD
or any of its affiliates and the Borrower and/or Riviera are not paid when and
as called for under the terms of such agreement, then NBD may debit any of
such accounts of the Borrower and/or Riviera at NBD or any of its affiliates
for such amount. In the event of such a debit, NBD or any of its affiliates
will use its best efforts to notify the Borrower and/or Riviera of such debit
within two (2) business days. The fact that NBD or any of its affiliates had
debited any of the accounts of the Borrower and/or Riviera at NBD or any of
its affiliates shall in no way whatsoever waive or diminish any default for
failure to make such payments when and as due.
12. SETOFF. Upon the occurrence of a default, NBD is hereby authorized at
any time and from time to time, without notice to the Borrower or Riviera (any
such notice being expressly waived), to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by NBD to or for the credit or the account
of the Borrower and/or Riviera against any and all of the Obligations, now or
hereafter existing, including those under this Agreement or the Loan Documents
or any of the Notes or any other agreement or instrument, irrespective of
whether or not NBD shall have made any demand under this Agreement or any Note
or otherwise. The Bank agrees to promptly notify the Borrower and/or Riviera
after any such setoff and application provided that the failure to give such
notice shall not affect the validity of such setoff and application and shall
not create any claims or liabilities against NBD. The rights of NBD under this
section shall not require maturity of any indebtedness and are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which NBD may have.
13. VERIFICATION OF ACCOUNTS/AUDITS. The Borrower and Riviera agree
that NBD, through its employees or authorized agents, shall be permitted to
send a letter to and otherwise contact each of its respective account debtors
to verify account receivable balances. In addition, NBD, an accountant or
accounting firm retained by NBD and other advisors, representatives or agents
of NBD shall be permitted full and complete access to the Borrower's and
Riviera's facilities and books and records to conduct audits as often as NBD
reasonably desires. The reasonable cost of such audits ("Audit Fees"), whether
conducted by NBD (in which case NBD shall be entitled to make a reasonable
charge, plus out-of-pocket costs and expenses), an accountant or accounting
firm retained by NBD or other advisors, representatives or agents of
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NBD (including, but not limited to, Xxxxxx Enterprises Inc.) shall be part of
the Obligations and shall be secured by all of the Collateral.
14. EXPENSES, FEES AND COSTS; INDEMNIFICATION. The Borrower and Riviera,
jointly and severally, shall be responsible for the payment of all fees and
out-of-pocket disbursements incurred by NBD, including fees of counsel and
court costs, in any way arising from or in connection with this Agreement, any
of the Collateral, any of the Loan Documents, any of the Obligations or the
business relationship between NBD, on the one hand, and any one or more of the
Borrower, Riviera, Holding or Xxxxx, on the other hand, including, without
limitation, (a) Audit Fees; (b) all fees and expenses (including recording fees
and insurance policy fees) of NBD and counsel for NBD for the preparation,
examination, approval, negotiation, execution and delivery of, or the closing
of any of the transactions contemplated by, this Agreement or any of the Loan
Documents; (c) all fees and out-of-pocket disbursements incurred by NBD,
including attorneys' fees and accountants' fees, in any way arising from or in
connection with any action taken by NBD to monitor, advise, administer, enforce
or collect any of the Obligations (including under this Agreement and the Loan
Documents) or any other obligations of the Borrower or Riviera, whether joint,
joint and several, or several, under this Agreement, any of the Loan Documents
or any other existing or future document or agreement, or arising from or
relating to the business relationship between NBD, on the one hand, and any one
or more of the Borrower, Riviera, Holding or Xxxxx, on the other hand,
including any actions to lift the automatic stay or to otherwise in any way
monitor or participate in any bankruptcy, reorganization or insolvency
proceeding of the Borrower or Riviera; (d) all expenses and fees (including
attorneys' fees) incurred in relation to, in connection with, in defense of
and/or in prosecution of any litigation instituted by any one or more of the
Borrower, Riviera, Holding, Xxxxx, NBD or any third party against or involving
NBD arising from, relating to, or in connection with any of the Obligations or
any Guarantor's obligations, this Agreement, any of the Collateral, any of the
Loan Documents or the business relationship between NBD, on the one hand, and
any one or more of the Borrower, Riviera, Holding or Xxxxx, on the other hand,
including any so-called "lender liability" action, any claim and delivery or
other action for possession of, or foreclosure on, any of the Collateral,
post-judgment enforcement of any rights or remedies including enforcement of
any judgments, and prosecution of any appeals (whether discretionary or as of
right and whether in connection with pre-judgment or post-judgment matters);
(e) all costs, expenses and fees incurred by NBD or its agents in connection
with appraisals and reappraisals of all or any of the Collateral (and the
Borrower and Riviera shall fully cooperate with such appraisers and make their
property available for appraisal in connection with as many appraisals as NBD
may request); (f) all costs, expenses and fees incurred by NBD and/or its
counsel in connection with consultants, expert witnesses or other professionals
retained by NBD and/or its counsel in order to assist, advise and/or give
testimony with respect to any matter relating to the Collateral, the Loan
Documents, or the business relationship between NBD, on the one hand, and any
one or more of the Borrower, Riviera, Holding or Xxxxx, on the other hand (and
the Borrower and Riviera shall fully cooperate with such consultant, expert
witness or other professional and shall make their premises, books and records,
accounting systems, computer systems and other media for the
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recordation of information available to such persons); and (g) all costs,
expenses and fees incurred by NBD in connection with any environmental
investigations including but not limited to Phase I, Phase II and Phase III
environmental audits (and the Borrower and Riviera agree that NBD and/or its
agents may enter on their premises at any time to conduct such environmental
investigations). Nothing contained in this paragraph shall, or is intended to,
expand the liability of Xxxxx and Holding beyond that contained in the Limited
Guaranty Documents.
All of the foregoing costs, expenses and reimbursement
obligations, set forth in this section (the "Costs") shall be part of the
Obligations, and shall be secured by all of the Collateral. The costs shall be
paid within 10 days of written request from NBD.
For purposes hereof "Claims" shall mean any demand, claim, action or
cause of action, damage, liability, loss, cost, debt, expense, obligation,
tax, assessment, charge, lawsuit, contract, agreement, undertaking or
deficiency, of any kind or nature, whether known or unknown, fixed, actual,
accrued or contingent, liquidated or unliquidated (including interest,
penalties, attorneys' fees and other costs and expenses incident to proceedings
or investigations relating to any of the foregoing or the defense of any of the
foregoing), whether or not litigation has commenced.
15. OTHER DOCUMENTS. The Borrower and Riviera agree to execute and
deliver any and all documents reasonably deemed necessary or appropriate by NBD
or counsel to NBD to carry out the intent of and/or to implement the Loan
Documents or this Agreement, including, but not limited to, such documentation
necessary to grant NBD a lien, mortgage and/or security interest in any assets
of the Borrower and Riviera presently not subject to a lien, mortgage or
encumbrance in favor of NBD to secure the Obligations.
16. CROSS DEFAULT/REMEDIES. An Event of Default under the terms of this
Agreement shall be considered an event of default, an event of acceleration and
a default under each document and agreement comprising the Loan Documents and an
event of default, an event of acceleration or a default under any document or
agreement comprising the Loan Documents, (other than the Existing Defaults),
shall be considered an Event of Default under the terms of this Agreement, and
all of the other Loan Documents. Upon the occurrence of an Event of Default
under this Agreement or any event of default, event of acceleration or default
under any document or agreement comprising the Loan Documents, or any document
executed in connection herewith, or referenced herein, and without prior notice
of or an opportunity to cure such event of default, event of acceleration or
default, except as otherwise provided herein, (a) NBD shall have the right to
exercise any rights or remedies provided in this Agreement, the Loan Documents,
or applicable law, (including, without limitation, the right to offset any
accounts of the Borrower or Riviera with NBD), (b) NBD may deem the Forbearance
Period to be expired, and (c) upon NBD's election, but without further notice,
all of the Obligations shall be immediately due and payable. IN ANY EVENT, FROM
AND AFTER THE CLOSE OF BUSINESS ON JUNE 30, 1996, NBD MAY IMMEDIATELY TAKE
ACTION TO ENFORCE
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ALL OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS, THIS AGREEMENT OR
APPLICABLE LAW, INCLUDING, BUT NOT LIMITED TO, COLLECTION OF THE BORROWER'S
OBLIGATIONS.
17. DOCUMENTS CONTINUE. Except as expressly modified and amended by
the terms of this Agreement, all of the terms and conditions of the Loan
Documents remain in full force and effect and are hereby ratified, confirmed
and approved. If there is an express conflict between the terms of this
Agreement and the terms of the Loan Documents, the terms of this Agreement
shall govern and control.
18. RESERVATION OF RIGHTS/NO WAIVERS. This Agreement grants a conditional
and limited forbearance until June 30, 1996, only, upon the terms and
conditions set forth in this Agreement. Notwithstanding anything to the
contrary in this Agreement, all of NBD's rights and remedies against the
Borrower, Riviera, third parties, and/or the Collateral and/or any rights of
NBD under the Limited Guaranty Documents are expressly reserved, including,
without limitation, all rights and remedies resulting from, or arising in
connection with, the Existing Defaults. Likewise, nothing herein shall be
deemed to constitute a waiver of any defaults existing as of the date hereof, a
further worsening of the Existing Defaults or new events of default, events of
acceleration or defaults or shall in any way prejudice the rights or remedies
of NBD under the Loan Documents or applicable law. Further, NBD shall have the
right to waive any conditions set forth in this Agreement and/or the Loan
Documents, in its sole and unfettered discretion. And any such waiver shall
not prejudice, waive or reduce any other right or remedy which NBD may have
against the Borrower or Riviera, or any rights of NBD under the Limited
Guaranty Documents. However, the other parties to this Agreement and the Loan
Documents, understand that no waiver by NBD of the rights or any condition of
this Agreement and/or the Loan Documents shall be effective unless the same
shall be contained in writing signed by an authorized agent of NBD.
19. CREDIT INQUIRIES. In the event customers, buyers, potential financing
sources or other parties make inquiry of NBD as to the current lending
relationship between NBD, on the one hand, and the Borrower or Riviera, on the
other hand, the parties agree that NBD may refer such inquiries to the Borrower
or Riviera.
20. AUTHORITY. Each party executing this Agreement in a representative
capacity represents and warrants that he or she has authority to execute this
Agreement and legally bind the entity he or she represents.
21. MISCELLANEOUS.
(a) This Agreement constitutes the entire understanding of
the parties with respect to the subject matter hereof and may be modified or
amended only by a writing signed by the party to be charged.
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(b) This Agreement is governed by the internal laws of the
State of Michigan (without regard to conflicts of law principles).
(c) This Agreement may be executed in counterparts, each of
which shall be deemed an original, but together they shall constitute one and
the same instrument, and facsimile copies of signatures shall be treated as
original signatures for all purposes.
(d) This Agreement is binding on each of the Borrower and
Riviera and their respective successors and assigns and shall inure to the
benefit of NBD and its successors and assigns.
(e) If any provision of this Agreement is in conflict with
any applicable statute or rule of law or otherwise unenforceable, such
offending provision shall be null and void only to the extent of such conflict
or unenforceability, but shall be deemed separate from and shall not invalidate
any other provision of this Agreement.
(f) Defined terms used in this Agreement without definition shall
have the meanings given to them under the Credit Agreement.
22. NO OTHER PROMISES OR INDUCEMENTS. There are no promises or
inducements which have been made to any signatory hereto to cause such
signatory to enter into this Agreement other than those which are set forth in
this Agreement.
23. WAIVER OF JURY TRIAL AND ACKNOWLEDGEMENT. THE PARTIES HERETO
ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT
THIS RIGHT MAY BE WAIVED. NBD, THE BORROWER AND RIVIERA EACH HEREBY KNOWINGLY,
VOLUNTARILY AND WITHOUT COERCION, WAIVE ALL RIGHTS TO A TRIAL BY JURY OF ALL
DISPUTES BETWEEN NBD AND ANY OTHER PARTY HERETO ARISING OUT OF OR IN ANY
RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS OR RELATIONSHIPS BETWEEN THE
PARTIES. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT OF THIS
WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN INSTRUMENT
SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED.
EACH OF THE BORROWER AND RIVIERA ACKNOWLEDGES THAT (1) IT HAS BEEN
GIVEN THE OPPORTUNITY TO CONSULT WITH COUNSEL AND OTHER ADVISORS OF ITS CHOICE
AND, AFTER CONSULTING WITH SUCH COUNSEL AND ADVISORS, KNOWINGLY, VOLUNTARILY
AND WITHOUT DURESS, COERCION, UNLAWFUL RESTRAINT, INTIMIDATION OR COMPULSION,
ENTERS INTO THIS AGREEMENT, BASED UPON SUCH ADVICE AND COUNSEL AND IN THE
EXERCISE OF ITS BUSINESS JUDGMENT, (2) THIS AGREEMENT HAS BEEN
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ENTERED INTO IN EXCHANGE FOR GOOD AND VALUABLE CONSIDERATION, RECEIPT OF WHICH
THE PARTIES HERETO ACKNOWLEDGE, (3) IT HAS CAREFULLY AND COMPLETELY READ ALL OF
THE TERMS AND PROVISIONS OF THIS AGREEMENT AND IS NOT RELYING ON THE OPINIONS
OR ADVICE OF NBD OR ITS AGENTS OR REPRESENTATIVES IN ENTERING INTO THIS
AGREEMENT.
24. STATUTE OF FRAUDS. THIS WRITTEN FORBEARANCE AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
NBD BANK
By: [SIG]
------------------------
Its: Vice President
--------------------
RIVIERA DIE & TOOL, INC.
By: [SIG]
------------------------
Its: C.F.O.
--------------------
Subscribed and sworn to before me this 27th day of March, 1996.
Xxxxx X. Xxxxxxxx
--------------------
Notary Public, Kent County,
------ ----
My Commission expires:
----------
[Signatures continue on following pages]
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[Signatures continued from prior page]
RIVIERA TOOL COMPANY
By: [SIG]
------------------------
Its: C.F.O.
--------------------
Subscribed and sworn to before me this 27th day of March, 1996.
Xxxxx X. Xxxxxxxx
--------------------
Notary Public, Kent County,
----- ----
My Commission expires:
----------
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SIXTEENTH AMENDMENT TO CREDIT AGREEMENT
AND RESTATED FORBEARANCE AGREEMENT
NBD Bank, formerly known as NBD Bank, N.A., successor by merger to the
interests of NBD Grand Rapids, N.A. ("NBD" or the "Bank"), Riviera Die & Tool,
Inc. (formerly known as R.D.T., Inc.), a Michigan Corporation (the "Borrower")
and Riviera Tool Company, a Michigan Corporation ("Riviera") enter into this
Sixteenth Amendment to Credit Agreement and Restated Forbearance Agreement (the
"Agreement") dated as of the 4th day of October, 1996.
RECITALS
A. The Borrower and the Bank entered into a Credit Agreement dated April
20, 1988, as amended by a First Amendment to Credit Agreement dated August 31,
1988, a Second Amendment to Credit Agreement dated January 30, 1989, a Third
Amendment to Credit Agreement dated January 30, 1990, a Fourth Amendment to
Credit Agreement dated May 16, 1991, a Fifth Amendment to Credit Agreement
dated July 31, 1992, a Sixth Amendment to Credit Agreement dated January 31,
1993, a Seventh Amendment to Credit Agreement dated March 31, 1993, an Eighth
Amendment to Credit Agreement dated July 26, 1993, a Ninth Amendment to Credit
Agreement dated March 4, 1994, a Forbearance Agreement dated April 14, 1994 (the
"Original Forbearance Agreement"), a Tenth Amendment to Credit Agreement and
Restated Forbearance Agreement dated May 5, 1994, an Eleventh Amendment to
Credit Agreement and Restated Forbearance Agreement dated as of December 1,
1994, and a Twelfth Amendment to Credit Agreement and Restated Forbearance
Agreement dated as of May 1, 1995, a Thirteenth Amendment to Credit Agreement
and Restated Forbearance Agreement dated as of September 1, 1995, a Fourteenth
Amendment to Credit Agreement and Restated Forbearance Agreement effective as of
January 1, 1996, and a Fifteenth Amendment to Credit Agreement and Restated
Forbearance Agreement dated effective as of April 1, 1996, as amended by a
letter agreement dated September 24, 1996 (collectively, the "Credit Agreement")
by which the Bank has made certain credit facilities available to the Borrower
upon the terms and subject to the conditions set forth in the Credit Agreement.
B. Pursuant to the Credit Agreement, the Borrower has executed two (2)
promissory notes: (i) the Fifteenth Amended and Restated Working Capital
Revolving Credit Note in the original principal amount of $10,500,000.00 dated
as of April 1, 1996 (the "Working Capital Revolving Credit Note"); and (ii) a
Fifth Amended and Restated Term Note in the original principal amount of
$696,962.00 dated as of January 1, 1996 (the "Term Note").
C. In connection with the Credit Agreement, Riviera executed and
delivered to the Bank a Guaranty dated April 20, 1988, pursuant to which, among
other things, Riviera guarantied all of the Borrower's obligations (including
the Obligations as defined below) to the Bank, whether then existing or
thereafter arising or created (the "Riviera Guaranty").
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D. In addition, Xxxxx and Holding (collectively, Xxxxx and Holding may be
hereinafter referred to as the "Limited Guarantors") each executed and delivered
Guaranties and Continuing Pledge Agreements dated August 4, 1992 and July 26,
1993 (the "Limited Guaranty Documents").
E. As of October 7, 1996, there was (i) $10,045,885.36 in principal
indebtedness owing by the Borrower under the Working Capital Revolving Credit
Note and (ii) $296,962.00 in principal indebtedness owing by the Borrower
pursuant to the Term Note. These sums, together with accrued but unpaid
interest, costs and expenses (including attorneys' fees), as well as all other
present and future obligations of the Borrower to the Bank, including, but not
limited to, obligations arising under or in connection with the Loan Documents
(as defined below) or any other document executed in connection therewith or
subsequent thereto by the Borrower in favor of the Bank are hereinafter referred
to as the "Obligations".
F. On April 20, 1988, the Borrower executed and delivered to NBD a
Security Agreement (Accounts, General Intangibles and Chattel Paper), a Security
Agreement (Inventory) and a Security Agreement (Equipment), as amended by a
First Amendment to each of the above-described Security Agreements dated January
30, 1989 (the "Borrower Security Agreements") wherein Borrower granted to NBD a
valid, perfected, indefeasible and enforceable first-priority lien and security
interest in favor of the Bank in all of the Borrower's present and future
personal property, including, but not limited to, accounts, chattel paper,
general intangibles, documents, instruments, inventory, equipment, fixtures and
all other tangible and intangible personal property and all proceeds and
products thereof with the exception of certain property described in Section 5.8
of the Credit Agreement. For convenience, all of the collateral referred to in
the Borrower Security Agreements, together with all other collateral described
in and/or granted in connection with any of the Loan Documents (as hereinafter
defined), together with all collateral heretofore, simultaneously herewith or
hereafter granted to the Bank by the Borrower to secure any of the Borrower's or
any other parties' present or future obligations to the Bank, is collectively
referred to as the "Borrower Collateral".
G. On April 20, 1988, Riviera executed and delivered to NBD a Security
Agreement (Accounts, General Intangibles and Chattel Paper), a Security
Agreement (Inventory) and a Security Agreement (Equipment) (the "Riviera
Security Agreements") wherein Riviera granted to NBD a valid, perfected,
indefeasible and enforceable first priority lien and security interest in favor
of the Bank in all of Riviera's present and future personal property, including,
but not limited to, accounts, chattel paper, general intangibles, documents,
instruments, inventory, equipment, fixtures and all other tangible and
intangible personal property and all proceeds and products thereof. For
convenience, all of the collateral referred to in the Riviera Security
Agreements, together with all other collateral described in and/or granted in
connection with any of the Loan Documents (as hereinafter defined), together
with all collateral heretofore, simultaneously herewith or hereafter granted to
the Bank by Riviera to secure any of Riviera's
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or any other parties' present or future obligations to the Bank, is collectively
referred to as the "Riviera Collateral".
H. The Borrower and Riviera acknowledge and agree that (i) the
Obligations are due the Bank without setoff, recoupment, defense or
counterclaim, in law or equity, of any nature or kind; (ii) the Obligations are
secured by valid, perfected, indefeasible, enforceable first priority liens and
security interests (except as permitted by Section 5.8 of the Credit Agreement)
in favor of the Bank in, among other things, (a) all of the Borrower's present
and future personal property, including, without limitation, accounts, chattel
paper, general intangibles, documents, instruments, inventory, equipment,
fixtures and all other tangible and intangible personal property and all
proceeds and products thereof, and (b) all of Riviera's present and future
personal property, including, without limitation, accounts, chattel paper,
general intangibles, documents, instruments, inventory, equipment, fixtures and
all other tangible and intangible personal property and all proceeds and
products thereof, and (c) the collateral described in the Limited Guaranty
Documents. For convenience, the Credit Agreement, the Working Capital Revolving
Credit Note, the Term Note (collectively, the "Notes"), the Borrower Security
Agreements, the Riviera Guaranty, the Riviera Security Agreements, the Limited
Guaranty Documents, the Original Forbearance Agreement, this Agreement and any
other document executed therewith or subsequent thereto by the Borrower in favor
of the Bank are hereinafter referred to as the "Loan Documents". For
convenience, all of the Borrower Collateral, the Riviera Collateral and the
collateral referenced in the Limited Guaranty Documents shall hereinafter be
referred to as the "Collateral".
I. The Borrower and Riviera reaffirm, ratify, confirm and approve their
obligations and duties under the Loan Documents as modified by this Agreement.
J. Borrower and Riviera, jointly, jointly and severally and severally,
reaffirm, ratify and confirm the liens, assignments and security interests
granted to NBD under the Loan Documents and confirm that any and all collateral
granted to NBD by any party for the purpose of securing repayment of all or any
part of the Borrower's or Riviera's obligations (including the Obligations) owed
to NBD, including, but not limited to the Collateral, shall constitute and serve
as collateral for any and all of the obligations and duties of the Borrower and
Riviera to NBD (including the Obligations), whether now existing or hereafter
arising.
K. Borrower and Riviera each acknowledge that currently there are
defaults under the Loan Documents as follows (collectively, the "Existing
Defaults"):
1. Consolidated working capital was ($2,335,297.00) as of July 31,
1996 instead of not less than $1,000,000.00 as required by the Loan Documents.
2. Tangible Net Worth was $5,662,833.00 as of July 31, 1996 instead
of not less than $6,000,000.00.
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3. Leverage Ratio was 3.06:1 as of July 31, 1996 instead of not
greater than 2.25:1.
4. The amount outstanding under the Working Capital Revolving Credit
Note did not permanently reduce to $9,000,000.00 or below by May 31, 1996.
5. The Obligations were not satisfied in full by June 30, 1996.
Borrower and Riviera represent and warrant that, to the best of their knowledge,
after due inquiry and investigation, they are unaware of any other Events of
Default (as defined in the Credit Agreement) or defaults under any of the Loan
Documents or this Agreement or of any event that, with the passage of time,
notice, or both, would become an Event of Default or a default under the Loan
Documents or this Agreement.
L. Borrower and Riviera also acknowledge that based on the Existing
Defaults, NBD has the right, without further notice, to accelerate all of the
Obligations, demand payment in full and enforce its rights under the
Loan Documents and applicable law.
M. Borrower and Riviera further acknowledge and agree that the actions
taken by the Bank to date are reasonable and appropriate under the
circumstances, are within NBD's rights under the Loan Documents and applicable
law and do not constitute interference with or control over the business
operations of any of the parties hereto.
N. Around June 1996, Borrower and Riviera contacted NBD to discuss their
desire to merge Borrower into Riviera, with Riviera to be the surviving entity,
in accordance with the Agreement of Merger attached as Exhibit N hereto (the
"Merger"). Borrower and Riviera have since confirmed to NBD their desire to
complete the Merger. As part of this Merger, Holding will be issued a
certificate representing 730,000 shares of common stock in the post-merger
Riviera, representing 50% of all issued common stock immediately after the
Merger, in exchange for its current 50% ownership of Riviera. This new stock in
Riviera shall be subject to the Continuing Pledge Agreement given by Holding in
favor of NBD dated May 5, 1994, as well as all covenants regarding stock issued
or held by Borrower, Riviera or Holding under the Loan Documents. Borrower and
Riviera have additionally informed NBD that, subject to NBD's consent, they hope
ultimately to issue and sell publicly new stock in Riviera, and apply the
proceeds of such sale, together with the proceeds of the refinancing of the
Obligations with a new lender, to satisfy the Borrower's Obligations in full.
O. Borrower and Riviera acknowledge that, under the terms of the Loan
Documents, the Merger will constitute a default absent NBD's consent. Borrower
and Riviera acknowledge that currently NBD has agreed to consent only to the
Merger, and has not consented to the issuance or public sale of new stock of
Riviera, as survivor of the Merger.
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P. Borrower and Riviera have requested that NBD continue to forbear from
enforcing its rights and remedies under the Loan Documents and applicable law
for an additional period through November 30, 1996, to afford such parties an
opportunity to complete the contemplated Merger. Borrower has further
represented that it believes these efforts will ultimately result in payment in
full of the Obligations.
Q. Borrower and Riviera have additionally requested that the Bank extend
the October 4, 1996 maturity date on the Working Capital Revolving Credit Note
and the Term Note until November 30, 1996.
R. The Borrower and Riviera acknowledge and agree that (i) NBD has fully
performed all of its obligations under the Loan Documents and all other
agreements between NBD and such parties; (ii) any future loans will be made at
NBD's sole and unfettered discretion; and (iii) NBD has not made any
representations of any kind or nature that funding in any amount will continue
or that the Forbearance Period (as defined in Section 1 below) will be extended
beyond November 30, 1996. NBD HAS INFORMED BORROWER AND RIVIERA THAT IT DOES
NOT INTEND TO EXTEND THE FORBEARANCE PERIOD BEYOND NOVEMBER 30, 1996, AND THAT
THEY SHOULD PAY NBD IN FULL ON OR BEFORE THAT DATE. NBD HAS ADVISED THE PARTIES
THAT FROM AND AFTER NOVEMBER 30,1996, NBD MAY TAKE ANY AND ALL STEPS TO SATISFY
THE OBLIGATIONS INCLUDING, BUT NOT LIMITED TO, ENFORCEMENT PROCEEDINGS,
CESSATION OF ADVANCES OR REDUCTION OF ADVANCE RATES UNDER THE BORROWING BASE,
REDUCTION IN THE CAP ON THE WORKING CAPITAL REVOLVING CREDIT, INCREASED INTEREST
RATES AND FEES OR SUCH OTHER ACTIONS AS NBD MAY, IN ITS SOLE DISCRETION, DEEM
APPROPRIATE.
Based on the foregoing Recitals (which are incorporated in this Agreement
as and shall constitute representations, warranties and covenants of the
respective parties to this Agreement, as the case may be), and for other good
and valuable consideration, the parties hereto agree as follows:
AGREEMENT
1. FORBEARANCE. Subject to the following conditions precedent in this
Section 1 and subject to the other terms of this Agreement, NBD agrees to
forbear from enforcing its rights and remedies based on the Existing Defaults,
until the earlier of (i) a further or additional default or Event of Default
under the Loan Documents (including a worsening of the Existing Defaults); (ii)
a default or Event of Default under this Agreement; or (iii) November 30, 1996
(the "Forbearance Period"):
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(a) Simultaneously with the execution of this Agreement, receipt by
NBD of an executed Sixteenth Amended and Restated Working Capital Revolving
Credit Note in substantially the form attached hereto as Exhibit 1(a);
(b) Simultaneously with the execution of this Agreement, receipt by
NBD of an executed Sixth Amended and Restated Term Note in substantially the
form attached hereto as Exhibit 1(b);
(c) Simultaneously with the execution of this Agreement, receipt
by NBD of each additional document listed on the Preliminary Closing List
attached as Exhibit 1(c) hereto, in form and substance satisfactory to NBD and
fully executed as appropriate;
(d) Simultaneously with the execution of this Agreement, receipt by
NBD of a fully-executed copy of this Agreement acknowledged by counsel to the
Borrower and Riviera;
(e) Simultaneously with the execution of this Agreement, receipt by
NBD of UCC-3 terminations for all UCC financing statements filed by Comerica
Bank against Borrower or Riviera.
(f) Simultaneously with the execution of this Agreement, Borrower
shall make all payments currently due under the Loan Documents, and shall
additionally pay to NBD the $50,000.00 forbearance fee and the $25,000,00 fee
for non-reduction of working capital borrowings, both as discussed more fully in
Paragraph 11 below.
(g) Simultaneously with the execution of this Agreement, receipt by
NBD of insurance policies on the life of Xxxxx assigned to NBD aggregating
$2,500,000.00.
(h) Simultaneously with the execution of this Agreement, receipt by
NBD of evidence of updated insurance covering the assets of Borrower naming NBD
as lender loss payee.
(i) NBD receives such other additional documentation necessary to
carry out the intent and purposes of this Agreement.
2. ASSUMPTION OF OBLIGATIONS.
(a). By signing below Riviera acknowledges and assumes all of the
Obligations of Borrower under the Loan Documents. Riviera acknowledges that it
shall be solely liable for such obligations as if it had been the original
signatory to the Loan Documents. Notwithstanding this assignment and
assumption, Riviera Die & Tool, Inc. shall remain liable for any and all of the
Obligations to the extent they are determined not to be the responsibility of
Riviera.
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(b). All references to "Borrower" in the Loan Documents (including
this Sixteenth Amendment) shall be deemed to be references to Borrower and
Riviera, as successor by merger to Borrower.
(c). Subject to the terms and effectiveness of this Sixteenth
Amendment, Lender consents to the Merger of Riviera as contemplated by the
Agreement of Merger attached as Exhibit 2(c) hereto insofar as required by the
Loan Documents.
3. ALL OBLIGATIONS DUE. ALL OF THE OBLIGATIONS INCLUDING, WITHOUT
LIMITATION, OBLIGATIONS UNDER THE CREDIT AGREEMENT, THE WORKING CAPITAL
REVOLVING CREDIT NOTE, THE TERM NOTE AND THIS AGREEMENT SHALL BE DUE AND PAYABLE
ON THE EARLIER OF (i) A DEFAULT, AN EVENT OF DEFAULT OR BREACH OF THE TERMS AND
CONDITIONS OF THIS AGREEMENT, OR (ii) NOVEMBER 30, 1996.
4. NO FURTHER FORBEARANCE IMPLIED. THE BORROWER AND RIVIERA ACKNOWLEDGE
THAT (a) NBD DOES NOT INTEND, NOR DOES NBD HAVE ANY OBLIGATION, TO EXTEND LOANS,
ADVANCES OR OTHER FINANCIAL ACCOMMODATIONS TO THE PARTIES HERETO BEYOND NOVEMBER
30, 1996, (b) NBD DOES NOT INTEND TO FORBEAR FROM ENFORCING ITS RIGHTS AND
REMEDIES AFTER NOVEMBER 30, 1996, AND NOTHING CONTAINED HEREIN OR OTHERWISE IS
INTENDED TO BE A PROMISE OR AGREEMENT TO MAKE ADVANCES UNDER THE WORKING CAPITAL
REVOLVING CREDIT NOTE AFTER NOVEMBER 30, 1996 OR TO EXTEND THE TERMS OF THIS
AGREEMENT BEYOND NOVEMBER 30, 1996, (c) ALL OF THE OBLIGATIONS ARE DUE, ABSENT
AN EARLIER DEFAULT UNDER THE LOAN DOCUMENTS, ON OR BEFORE NOVEMBER 30, 1996, AND
(d) NBD INTENDS TO TAKE ANY STEPS NECESSARY TO ASSURE SATISFACTION OF THE
OBLIGATIONS IN FULL BY NOVEMBER 30, 1996 OR AS SOON THEREAFTER AS POSSIBLE. THE
BORROWER, RIVIERA, XXXXX AND HOLDING HAVE BEEN ADVISED THAT THEY SHOULD PURSUE
ALTERNATIVE FINANCING SOURCES.
5. COLLATERAL. As noted in the Recitals, Borrower and Riviera have
granted to NBD a valid, perfected, indefeasible, enforceable first priority lien
and security interest in and to all of their respective personal property
(except as permitted by Section 5.8 of the Credit Agreement). As an
accommodation to the Borrower, NBD, from time to time, has executed and filed
UCC-3 partial releases with respect to certain specific equipment.
Notwithstanding the filing of these partial releases, the Borrower hereby
ratifies and grants to NBD a continuing security interest in all of its personal
property, including such equipment referenced in the UCC-3 partial releases.
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6. AMENDMENTS TO CREDIT AGREEMENT.
(i) Section 2.1 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"2.1 Loan. Subject to all of the terms and conditions hereof,
the Bank may, in its sole and unfettered discretion, lend to the
Borrower from time to time through November 30, 1996, such sums in
multiples of Twenty-Five Thousand Dollars ($25,000.00) as may be
requested from time to time by the Borrower in a manner specified by
the Bank, provided that the aggregate principal amount outstanding at
any time pursuant to the provisions of this Section 2.1 shall not
exceed the lesser of (1)(a) through and including October 31, 1996,
Ten Million Five Hundred Thousand Dollars ($10,500,000.00) and (b)
commencing November 1, 1996 and continuing thereafter, Nine Million
Dollars ($9,000,000.00) (the "Working Capital Revolving Credit") and
(2) the Borrowing Base. If the principal amount outstanding at any
time exceeds said amounts, the Borrower shall forthwith pay to
the Bank an amount sufficient to eliminate such excess. Subject to
the terms and conditions of this Agreement, the Borrower may borrow,
prepay pursuant to Section 2.3, and reborrow under this Section 2.1.
Upon the execution of the Sixteenth Amendment to Credit Agreement and
Restated Forbearance Agreement, the Borrower shall execute and
deliver to the Bank a revolving credit demand note in the form of
Exhibit l(a) attached hereto (the "Sixteenth Amended and Restated
Working Capital Revolving Credit Note"), the terms of which are
incorporated herein by reference. All commitments by the Bank on
behalf of the Borrower by way of instrument certification, letter of
credit or similar device shall be considered loans pursuant to this
Section 2.1."
7. NEGATIVE COVENANTS. During the Forbearance Period, without the prior
written consent of the Bank, the Borrower and Riviera shall not:
(a) RESTRICTION ON LIENS. Create or permit to be created or allow
to exist any new, additional or expanded lien upon any property or assets now
owned or acquired in the future by the Borrower and Riviera.
(b) RESTRICTION ON INDEBTEDNESS. Create, incur, assume, suffer to
exist, have outstanding or in any manner become liable in respect of any
indebtedness for money other than
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the Obligations or indebtedness incurred in the ordinary course of the business
of the Borrower for necessary materials and services.
(c) CAPITAL ASSET EXPENDITURE. Expend sums for the acquisition of
capital assets, including payments under any new lease of real or personal
property.
(d) SALE AND LEASEBACK. Enter into any new agreement providing for
the leasing by the Borrower of property which has been or is to be sold or
transferred by the Borrower or lessor of the property.
(e) TRANSACTIONS WITH AFFILIATES. Enter into, or permit or suffer
to exist, any transaction or arrangement with any Affiliate, except on terms
which are no less favorable to the Borrower than could be obtained from persons
who are not Affiliates in arm's length transactions.
(f) STOCK. Issue any new stock of any class in Borrower, or offer
any stock of Borrower for sale publicly.
8. NO OVERDRAFTS. Borrower and Riviera agree that they will not create
any overdrafts in any accounts at NBD. Furthermore, Borrower and Riviera
acknowledge and agree that NBD shall not, under any circumstances, be required
to honor any checks or other items presented to NBD for payment for which there
are insufficient available funds in Borrower's account at NBD for payment and
NBD may return any such items so presented. In the event that such items are
not returned, this shall not create any right or expectation that such
overdrafts will be tolerated or permitted in the future.
9. TAXES. Borrower and Riviera represent that they are paying all
taxes on a timely basis except as set forth on Exhibit 9 attached hereto.
10. EVENTS OF DEFAULT. In addition to any other defaults or Events of
Default contained in any of the Loan Documents, the following shall constitute
an Event of Default under this Agreement and each of the Loan Documents:
(a) any further or additional Events of Default, events of
acceleration or defaults provided for in any. of the Loan Documents (including a
worsening of any of the Existing Defaults for any reason other than the impact
of the restructuring transaction between the Borrower and Xxxxxx Financial
Leasing, Inc. and Banc One Leasing Corporation entered into in April of 1994);
(b) if any representation or warranty made by Borrower or Riviera
in this Agreement or in connection with the negotiation hereof is untrue as of
the date made or hereafter becomes untrue;
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(c) the Borrower and/or Riviera shall at any time fail to observe,
perform or comply with any Dominion of Funds Agreement with NBD;
(d) there shall exist at any time a Borrowing Base Deficiency;
(e) any lender, supplier, creditor or lessor shall (i) accelerate
any obligations of the Borrower or Riviera, due to a default by Borrower or
Riviera under any agreement with any creditor in excess of $25,000 to such
creditor or shall otherwise take any action of any kind or nature to enforce or
begin enforcement of its rights or remedies against Borrower or Riviera by
reason of such default, or (ii) receive from Borrower or Riviera any prepayments
of obligations, any extraordinary payments of outstanding indebtedness or fees,
or fees or interest above the level paid to such creditor by Borrower or Riviera
as of January 1, 1994;
(f) any creditor, including, but not limited to, any governmental
taxing authority, shall cause a lien to be filed on any of the Collateral (other
than a lien for taxes not yet due and payable); and
11. CREDIT FEES. As partial consideration for NBD's agreement to extend
the Forbearance Period as provided hereunder, Borrower and Riviera shall pay to
NBD a $50,000.00 forbearance fee simultaneously with execution of this
Agreement, and shall pay an additional $50,000.00 forbearance fee on or before
October 31, 1996; provided, however that the $50,000.00 fee due and payable on
October 31, 1996 shall be deferred to November 30, 1996 if on or prior to
October 31, 1996 Borrower has presented to NBD a commitment letter satisfactory
to NBD at its discretion providing new financing in an amount sufficient to
satisfy all of the Obligations in full on or before November 30, 1996; provided
further that if the Obligations are satisfied in full on or before November 30,
1996, the $50,000.00 fee otherwise owing on that date shall then be waived.
Borrower and Riviera must additionally pay to NBD an additional $25,000.00 fee
simultaneous with execution of this Agreement since borrowings under the Working
Capital Revolving Credit did not permanently reduce to $9,000,000.00 or below on
or before September 30, 1996 as previously agreed by Borrower.
12. RELEASE. AS OF THE DATE HEREOF, THE BORROWER AND RIVIERA REPRESENT AND
WARRANT THAT THEY ARE AWARE OF, AND POSSESS, NO CLAIMS OR CAUSES OF ACTION
AGAINST THE BANK. NOTWITHSTANDING THIS REPRESENTATION AND AS FURTHER
CONSIDERATION FOR THE AGREEMENTS AND UNDERSTANDINGS HEREIN, THE BORROWER AND
RIVIERA, INDIVIDUALLY, JOINTLY AND SEVERALLY, AND ON BEHALF OF EACH OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, EXECUTORS, SUCCESSORS AND
ASSIGNS, HEREBY RELEASE NBD, ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
ATTORNEYS, AFFILIATES, SUBSIDIARIES, SUCCESSORS AND ASSIGNS FROM ANY LIABILITY,
CLAIM,
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RIGHT OR CAUSE OF ACTION WHICH NOW EXISTS OR HEREAFTER ARISES, WHETHER KNOWN OR
UNKNOWN, ARISING FROM EVENTS OCCURRING PRIOR TO AND IN ANY WAY RELATED TO FACTS
IN EXISTENCE AS OF THE DATE HEREOF. BY WAY OF EXAMPLE AND NOT LIMITATION, THE
FOREGOING INCLUDES ANY CLAIMS IN ANY WAY RELATED TO ACTIONS TAKEN OR OMITTED TO
BE TAKEN BY NBD UNDER THE LOAN DOCUMENTS, OR THIS AGREEMENT AND THE BUSINESS
RELATIONSHIP WITH NBD.
13. AUTHORIZATION TO DEBIT ACCOUNT. In the event that any payment called
for by the Loan Documents, this Agreement (or any agreement referred to or
incorporated herein) or any other present or future agreements between NBD or
any of its affiliates and the Borrower and/or Riviera are not paid when and as
called for under the terms of such agreement, then NBD may debit any of such
accounts of the Borrower and/or Riviera at NBD or any of its affiliates for such
amount. In the event of such a debit, NBD or any of its affiliates will use its
best efforts to notify the Borrower and/or Riviera of such debit within two (2)
business days. The fact that NBD or any of its affiliates had debited any of
the accounts of the Borrower and/or Riviera at NBD or any of its affiliates
shall in no way whatsoever waive or diminish any default for failure to make
such payments when and as due.
14. SETOFF. Upon the occurrence of a default, NBD is hereby authorized at
any time and from time to time, without notice to the Borrower or Riviera (any
such notice being expressly waived), to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by NBD to or for the credit or the account
of the Borrower and/or Riviera against any and all of the Obligations, now or
hereafter existing, including those under this Agreement or the Loan Documents
or any of the Notes or any other agreement or instrument, irrespective of
whether or not NBD shall have made any demand under this Agreement or any Note
or otherwise. The Bank agrees to promptly notify the Borrower and/or Riviera
after any such setoff and application provided that the failure to give such
notice shall not affect the validity of such setoff and application and shall
not create any claims or liabilities against NBD. The rights of NBD under this
section shall not require maturity of any indebtedness and are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which NBD may have.
15. VERIFICATION OF ACCOUNTS/AUDITS. The Borrower and Riviera agree that
NBD, through its employees or authorized agents, shall be permitted to send a
letter to and otherwise contact each of its respective account debtors to verify
account receivable balances. In addition, NBD, an accountant or accounting firm
retained by NBD and other advisors, representatives or agents of NBD shall be
permitted full and complete access to the Borrower's and Riviera's facilities
and books and records to conduct audits as often as NBD reasonably desires. The
reasonable cost of such audits ("Audit Fees"), whether conducted by NBD (in
which case NBD shall be entitled to make a reasonable charge, plus out-of-pocket
costs and expenses), an accountant or accounting firm retained by NBD or other
advisors, representatives or agents of
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NBD (including, but not limited to, Xxxxxx Enterprises Inc.) shall be part of
the Obligations and shall be secured by all of the Collateral.
16. EXPENSES, FEES AND COSTS; INDEMNIFICATION. The Borrower and Riviera,
jointly and severally, shall be responsible for the payment of all fees and
out-of-pocket disbursements incurred by NBD, including fees of counsel and court
costs, in any way arising from or in connection with this Agreement, any of the
Collateral, any of the Loan Documents, any of the Obligations or the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand, including, without limitation, (a)
Audit Fees; (b) all fees and expenses (including recording fees and insurance
policy fees) of NBD and counsel for NBD for the preparation, examination,
approval, negotiation, execution and delivery of, or the closing of any of the
transactions contemplated by, this Agreement or any of the Loan Documents; (c)
all fees and out-of-pocket disbursements incurred by NBD, including attorneys'
fees and accountants' fees, in any way arising from or in connection with any
action taken by NBD to monitor, advise, administer, enforce or collect any of
the Obligations (including under this Agreement and the Loan Documents) or any
other obligations of the Borrower or Riviera, whether joint, joint and several,
or several, under this Agreement, any of the Loan Documents or any other
existing or future document or agreement, or arising from or relating to the
business relationship between NBD, on the one hand, and any one or more of the
Borrower, Riviera, Holding or Xxxxx, on the other hand, including any actions to
lift the automatic stay or to otherwise in any way monitor or participate in any
bankruptcy, reorganization or insolvency proceeding of the Borrower or Riviera;
(d) all expenses and fees (including attorneys' fees) incurred in relation to,
in connection with, in defense of and/or in prosecution of any litigation
instituted by any one or more of the Borrower, Riviera, Holding, Xxxxx, NBD or
any third party against or involving NBD arising from, relating to, or in
connection with any of the Obligations or any Guarantor's obligations, this
Agreement, any of the Collateral, any of the Loan Documents or the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand, including any so-called "lender
liability" action, any claim and delivery or other action for possession of, or
foreclosure on, any of the Collateral, post-judgment enforcement of any rights
or remedies including enforcement of any judgments, and prosecution of any
appeals (whether discretionary or as of right and whether in connection with
pre-judgment or post-judgment matters); (e) all costs, expenses and fees
incurred by NBD or its agents in connection with appraisals and reappraisals of
all or any of the Collateral (and the Borrower and Riviera shall fully
cooperate with such appraisers and make their property available for appraisal
in connection with as many appraisals as NBD may request); (f) all costs,
expenses and fees incurred by NBD and/or its counsel in connection with
consultants, expert witnesses or other professionals retained by NBD and/or its
counsel in order to assist, advise and/or give testimony with respect to any
matter relating to the Collateral, the Loan Documents, or the business
relationship between NBD, on the one hand, and any one or more of the Borrower,
Riviera, Holding or Xxxxx, on the other hand (and the Borrower and Riviera
shall fully cooperate with such consultant, expert witness or other
professional and shall make their premises, books and records, accounting
systems, computer systems and other media for the
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recordation of information available to such persons); and (g) all costs,
expenses and fees incurred by NBD in connection with any environmental
investigations including but not limited to Phase I, Phase II and Phase III
environmental audits (and the Borrower and Riviera agree that NBD and/or its
agents may enter on their premises at any time to conduct such environmental
investigations). Nothing contained in this paragraph shall, or is intended to,
expand the liability of Xxxxx or Holding beyond that contained in the Limited
Guaranty Documents.
All of the foregoing costs, expenses and reimbursement obligations,
set forth in this section (the "Costs") shall be part of the Obligations, and
shall be secured by all of the Collateral. The costs shall be paid within 10
days of written request from NBD.
For purposes hereof "Claims" shall mean any demand, claim, action or
cause of action, damage, liability, loss, cost, debt, expense, obligation, tax,
assessment, charge, lawsuit, contract, agreement, undertaking or deficiency, of
any kind or nature, whether known or unknown, fixed, actual, accrued or
contingent, liquidated or unliquidated (including interest, penalties,
attorneys' fees and other costs and expenses incident to proceedings or
investigations relating to any of the foregoing or the defense of any of the
foregoing), whether or not litigation has commenced.
17. OTHER DOCUMENTS. The Borrower and Riviera agree to execute and deliver
any and all documents reasonably deemed necessary or appropriate by NBD or
counsel to NBD to carry out the intent of and/or to implement the Loan Documents
or this Agreement, including, but not limited to, such documentation necessary
to grant NBD a lien, mortgage and/or security interest in any assets of the
Borrower and Riviera presently not subject to a lien, mortgage or encumbrance in
favor of NBD to secure the Obligations.
18. CROSS DEFAULT/REMEDIES. An Event of Default under the terms of this
Agreement shall be considered an event of default, an event of acceleration and
a default under each document and agreement comprising the Loan Documents and an
event of default, an event of acceleration or a default under any document or
agreement comprising the Loan Documents, (other than the Existing Defaults),
shall be considered an Event of Default under the terms of this Agreement, and
all of the other Loan Documents. Upon the occurrence of an Event of Default
under this Agreement or any event of default, event of acceleration or default
under any document or agreement comprising the Loan Documents, or any document
executed in connection herewith, or referenced herein, and without prior notice
of or an opportunity to cure such event of default, event of acceleration or
default, except as otherwise provided herein, (a) NBD shall have the right to
exercise any rights or remedies provided in this Agreement, the Loan Documents,
or applicable law, (including, without limitation, the right to offset any
accounts of the Borrower or Riviera with NBD), (b) NBD may deem the Forbearance
Period to be expired, and (c) upon NBD's election, but without further notice,
all of the Obligations shall be immediately due and payable. IN ANY EVENT, FROM
AND AFTER THE CLOSE OF BUSINESS ON NOVEMBER 30, 1996, NBD MAY IMMEDIATELY TAKE
ACTION TO
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ENFORCE ALL OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS, THIS AGREEMENT
OR APPLICABLE LAW, INCLUDING, BUT NOT LIMITED TO, COLLECTION OF THE BORROWER'S
OBLIGATIONS.
19. DOCUMENTS CONTINUE. Except as expressly modified and amended by the
terms of this Agreement, all of the terms and conditions of the Loan Documents
remain in full force and effect and are hereby ratified, confirmed and approved.
If there is an express conflict between the terms of this Agreement and the
terms of the Loan Documents, the terms of this Agreement shall govern and
control.
20. RESERVATION OF RIGHTS/NO WAIVERS. This Agreement grants a conditional
and limited forbearance until November 30, 1996, only, upon the terms and
conditions set forth in this Agreement. Notwithstanding anything to the
contrary in this Agreement, all of NBD's rights and remedies against the
Borrower, Riviera, third parties, and/or the Collateral and/or any rights of NBD
under the Limited Guaranty Documents are expressly reserved, including, without
limitation, all rights and remedies resulting from, or arising in connection
with, the Existing Defaults. Likewise, nothing herein shall be deemed to
constitute a waiver of any defaults existing as of the date hereof, a further
worsening of the Existing Defaults or new events of default, events of
acceleration or defaults or shall in any way prejudice the rights or remedies of
NBD under the Loan Documents or applicable law. Further, NBD shall have the
right to waive any conditions set forth in this Agreement and/or the Loan
Documents, in its sole and unfettered discretion. And any such waiver shall not
prejudice, waive or reduce any other right or remedy which NBD may have against
the Borrower or Riviera, or any rights of NBD under the Limited Guaranty
Documents. However, the other parties to this Agreement and the Loan Documents,
understand that no waiver by NBD of the rights or any condition of this
Agreement and/or the Loan Documents shall be effective unless the same shall be
contained in writing signed by an authorized agent of NBD.
21. CREDIT INQUIRIES. In the event customers, buyers, potential financing
sources or other parties make inquiry of NBD as to the current lending
relationship between NBD, on the one hand, and the Borrower or Riviera, on the
other hand, the parties agree that NBD may refer such inquiries to the Borrower
or Riviera.
22. AUTHORITY. Each party executing this Agreement in a representative
capacity represents and warrants that he or she has authority to execute this
Agreement and legally bind the entity he or she represents.
23. MISCELLANEOUS.
(a) This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof and may be modified or amended
only by a writing signed by the party to be charged.
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(b) This Agreement is governed by the internal laws of the State
of Michigan (without regard to conflicts of law principles).
(c) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but together they shall constitute one and the same
instrument, and facsimile copies of signatures shall be treated as original
signatures for all purposes.
(d) This Agreement is binding on each of the Borrower and Riviera
and their respective successors and assigns and shall inure to the benefit of
NBD and its successors and assigns.
(e) If any provision of this Agreement is in conflict with any
applicable statute or rule of law or otherwise unenforceable, such offending
provision shall be null and void only to the extent of such conflict or
unenforceability, but shall be deemed separate from and shall not invalidate any
other provision of this Agreement.
(f) Defined terms used in this Agreement without definition shall
have the meanings given to them under the Credit Agreement.
24. NO OTHER PROMISES OR INDUCEMENTS. There are no promises or inducements
which have been made to any signatory hereto to cause such signatory to enter
into this Agreement other than those which are set forth in this Agreement.
25. REAFFIRMATION OF GUARANTY. Riviera hereby reaffirms each and every
term of its Guaranty (as more fully described herein) as it relates to the
payment and performance of the Obligations of Borrower owing to NBD, and further
affirms that the terms of its Guaranty extend to payment and performance of any
Obligations of Borrower that may remain after its merger with and into Riviera.
26. WAIVER OF JURY TRIAL AND ACKNOWLEDGEMENT. THE PARTIES HERETO
ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT
THIS RIGHT MAY BE WAIVED. NBD, THE BORROWER AND RIVIERA EACH HEREBY KNOWINGLY,
VOLUNTARILY AND WITHOUT COERCION, WAIVE ALL RIGHTS TO A TRIAL BY JURY OF ALL
DISPUTES BETWEEN NBD AND ANY OTHER PARTY HERETO ARISING OUT OF OR IN ANY
RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS OR RELATIONSHIPS BETWEEN THE
PARTIES. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT OF THIS
WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN INSTRUMENT
SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED.
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EACH OF THE PARTIES ACKNOWLEDGE THAT (1) IT HAS BEEN GIVEN THE
OPPORTUNITY TO CONSULT WITH COUNSEL AND OTHER ADVISORS OF ITS CHOICE AND, AFTER
CONSULTING WITH SUCH COUNSEL AND ADVISORS, KNOWINGLY, VOLUNTARILY AND WITHOUT
DURESS, COERCION, UNLAWFUL RESTRAINT, INTIMIDATION OR COMPULSION, ENTERS INTO
THIS AGREEMENT, BASED UPON SUCH ADVICE AND COUNSEL AND IN THE EXERCISE OF ITS
BUSINESS JUDGMENT, (2) THIS AGREEMENT HAS BEEN ENTERED INTO IN EXCHANGE FOR GOOD
AND VALUABLE CONSIDERATION, RECEIPT OF WHICH THE PARTIES HERETO ACKNOWLEDGE, (3)
IT HAS CAREFULLY AND COMPLETELY READ ALL OF THE TERMS AND PROVISIONS OF THIS
AGREEMENT AND IS NOT RELYING ON THE OPINIONS OR ADVICE OF NBD OR ITS AGENTS OR
REPRESENTATIVES IN ENTERING INTO THIS AGREEMENT.
27. STATUTE OF FRAUDS. THIS WRITTEN FORBEARANCE AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
28. CONDITIONS PRECEDENT. The following sections of this Agreement and
additional documents executed in connection herewith shall be effective only
following effectuation of the Merger: Section 2, Amendment to Stock Pledge
Agreement of Xxxxxxx Xxxxx, Amendment to Stock Pledge Agreement of Riviera
Holding Company, and Amended and Restated Security Agreement. Additionally, the
Borrower shall notify NBD (and counsel to the Borrower shall notify counsel to
NBD) immediately following effectuation of the Merger, and shall sign
replacement notes in the name of the post-Merger entity immediately upon receipt
of same from NBD.
NBD BANK
By:
--------------------------
Its:
---------------------
[Signatures continued on next page]
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[Signatures continued from previous page]
RIVIERA DIE & TOOL, INC.
By: Xxxxx X. Xxxxxx
------------------------------
Its: C.F.O.
-----------------------------
Subscribed and sworn to before me this 31st day of October, 1996.
Xxxxx X. Xxxxxxxx
----------------------------------
Notary Public, County,
--------- ---
My Commission expires:
XXXXX X. XXXXXXXX
Notary Public, Kent County, Michigan
My Commission Expires Oct 5, 2000
RIVIERA TOOL COMPANY
By: Xxxxx X. Xxxxxx
------------------------------
Its: C.F.O.
-----------------------------
Subscribed and sworn to before me this 31st day of October, 1996.
Xxxxx X. Xxxxxxxx
----------------------------------
Notary Public, County,
--------- ---
My Commission expires:
XXXXX X. XXXXXXXX
Notary Public, Kent County, Michigan
My Commission Expires Oct 5, 2000
17
170
SIXTEENTH AMENDED AND RESTATED
WORKING CAPITAL REVOLVING CREDIT NOTE
$10,500,000.00 Grand Rapids, Michigan
Maturity Date: November 30, 1996 As of June 30, 1996
FOR VALUE RECEIVED, the undersigned promises to pay to the order of NBD
BANK, formerly known as NBD BANK, N.A., a national banking association (the
"Bank"), at 000 Xxxxxx Xxxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000, or at such
other place as the holder hereof may from time to time designate in writing,
the principal sum of Ten Million Five Hundred Thousand Dollars
($10,500,000.00), or so much of such sum as has been advanced and is
outstanding, plus accrued but unpaid interest thereon as specified below, on
September 30, 1996. The indebtedness outstanding hereunder from time to time
prior to maturity (whether by acceleration or otherwise) or the occurrence of
an Event of Default under the Loan Agreements (as hereinafter defined) shall
bear interest in lawful money of the United States, on the basis of a year of
360 days for the actual number of days elapsed in a month, at the rate
of 4 percentage points in excess of the Prime Rate; and after maturity or the
occurrence of an Event of Default under the Loan Agreements, at the rate of 7
percentage points in excess of the Prime Rate, until paid; however, in no event
shall the rate of interest be in excess of the highest rate permitted by law.
For purposes hereof, the "Prime Rate" is that rate of interest which the Bank
shall from time to time announce to be the Bank's Prime Rate. The Prime Rate
is set by the Bank based upon various factors, including its costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans. The Bank may make loans at, above or
below the Prime Rate. Any change in the Prime Rate shall immediately effect a
change in the rate of interest payable hereunder.
The undersigned shall pay all accrued interest monthly, commencing on July
1, 1996 and continuing on the first day of each month thereafter until and
including September 30, 1996, when the entire outstanding principal balance
plus all accrued but unpaid interest shall be due and payable in full.
Principal of and interest on this Sixteenth Amended and Restated Working
Capital Revolving Credit Note (this "Note") shall be payable in lawful money
of the United States of America. The undersigned agrees to pay all costs of
collection and enforcement of this Note, including reasonable attorneys' fees
and court costs.
This Note is given pursuant to, and is subject to the terms and conditions
of, a Credit Agreement dated April 20, 1988, as amended by a First Amendment to
Credit Agreement dated August 31, 1988, a Second Amendment to Credit Agreement
dated January 30, 1989, a Third Amendment to Credit Agreement dated January 30,
1990, a Fourth Amendment to Credit Agreement dated May 16, 1991, a Fifth
Amendment to Credit Agreement dated July 31, 1992, a Sixth Amendment to Credit
Agreement dated January 31, 1993, a Seventh Amendment to Credit Agreement dated
March 31, 1993, an Eighth Amendment to Credit Agreement dated July 26, 1993, a
Ninth Amendment to Credit Agreement dated March 4, 1994, Forbearance Agreement
dated April 14, 1994, a Tenth Amendment to Credit Agreement and Restated
171
Forbearance Agreement dated May 5, 1994, an Eleventh Amendment to Credit
Agreement and Restated Forbearance Agreement dated as of December 1, 1994, a
Twelfth Amendment to Credit Agreement and Restated Forbearance Agreement dated
as of May 1, 1995, a Thirteenth Amendment to Credit Agreement and Restated
Forbearance Agreement dated as of September 1, 1995, a Fourteenth Amendment to
Credit Agreement and Forbearance Agreement dated as of January 1, 1996, a
Fifteenth Amendment to Credit Agreement and Restated Forbearance Agreement
dated effective as of January 1, 1996 and a Sixteenth Amendment to Credit
Agreement and Restated Forbearance Agreement dated as of June 30, 1996
(collectively, as they may be further modified, amended, and restated from time
to time, referred to as the "Loan Agreements"). Capitalized terms used but not
defined in this Note shall have the same meanings as in the Loan Agreements.
This Note is secured by, among other collateral, the collateral granted to the
Bank under the terms of the Loan Agreements (and all agreements referred to or
incorporated therein). The failure to make any payment when due under this
Note or the occurrence of any default under the Loan Agreements (or any other
agreements referred to or incorporated therein) shall be deemed a default
hereunder, and in any such events, the holder of this Note shall be entitled to
accelerate the maturity of the debt evidenced hereby and have all rights and
remedies afforded by law or available under the Loan Agreements (and all other
agreements referred to or incorporated therein).
This Note is in substitution and exchange for the Fifteenth Amended and
Restated Working Capital Revolving Credit Note dated as of April 1,
1996, in the original principal amount of $10,500,000.00 (the "Old Note") and
shall not in any circumstances be deemed a novation or to have paid,
terminated, extinguished or discharged the undersigned's indebtedness evidenced
by the Loan Agreements, all of which indebtedness shall continue under and be
evidenced and governed by this Note. The Old Note is consolidated, amended and
restated in this Note. Any reference in any other document or instrument
including but not limited to the Loan Agreements (and any agreement referred to
or incorporated therein) to the Old Note shall constitute a reference to this
Note.
The undersigned, and all endorsers and guarantors, hereby severally waive
valuation and appraisement, presentment, protest and demand, notice of
protest, demand and dishonor and nonpayment of this Note, and expressly agree
that the maturity of this Note, or any payment due under this Note, may be
extended from time to time without in any way affecting the liability of the
undersigned or said endorsers or guarantors.
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This Note, made in the State of Michigan, shall be governed and construed
according to the internal laws of Michigan.
RIVIERA TOOL COMPANY,
successor by merger to Riviera Die & Tool, Inc. f/k/a
R.D.T., Inc., a Michigan corporation
By: Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------
Title: CFO
-------------------------
0000 Xxxxxxxxx Xxxxxxx X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
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SIXTH AMENDED AND RESTATE TERM NOTE
$296,962.00 Grand Rapids, Michigan
Maturity Date: November 30, 1996 As of June 30, 1996
FOR VALUE RECEIVED, the undersigned promises to pay to the order of NBD
BANK, formerly known as NBD BANK, N.A., a national banking association (the
"Bank"), at 000 Xxxxxx Xxxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000, or at such
other place as the holder hereof may from time to time designate in writing,
the principal sum of Two Hundred Ninety-Six Thousand Nine Hundred Sixty-Two and
00/100 ($296,962.00), plus interest as specified below, payable in equal
consecutive monthly installments of principal of $40,000 each, commencing on
July 1, 1996, plus all accrued and unpaid interest thereon, and continuing on
the first day of each month thereafter through and including September 1, 1996,
with a final installment equal to the then outstanding principal balance plus
all accrued and unpaid interest, on September 30, 1996, the Maturity Date.
The indebtedness outstanding hereunder from time to time prior to maturity
(whether by acceleration or otherwise) or the occurrence of a default under
the Loan Agreements (as hereinafter defined) shall bear interest in lawful
money of the United States, on the basis of a year of 360 days for the actual
number of days elapsed in a month, at the per annum rate of 4 percentage points
in excess of the Prime Rate, and after maturity or the occurrence of a default
under the Loan Agreements, at the per annum rate of 7 percentage points in
excess of the Prime Rate, until paid. However, in no event shall the rate of
interest be in excess of the highest rate permitted by law. For purposes
hereof, the "Prime Rate" is that rate of interest which the Bank shall from
time to time announce to be the Bank's Prime Rate. The Prime Rate is set by
the Bank based upon various factors, including its costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans. The Bank may make loans at, above or below the Prime
Rate. Any change in the Prime Rate shall immediately effect a change in the
rate of interest payable hereunder.
Principal of and interest on this Sixth Amended and Restated Term Note
(this "Note") shall be payable in lawful money of the United States of
America. The undersigned agrees to pay all costs of collection and enforcement
of this Note including reasonable attorneys' fees and court costs.
At maturity of this Note, a balloon payment will be due. The Bank has
made no representations or promises to the undersigned, expressed or implied,
that the Bank will extend or postpone the due date of this Note or provide the
undersigned with any other loan or alternative financing with respect to the
balloon payment due at the maturity of this Note.
This Note is given pursuant to, and is subject to the terms and conditions
of, a Credit Agreement dated April 20, 1988, as amended by a First Amendment
to Credit Agreement dated August 31, 1988, a Second Amendment to Credit
Agreement dated January 30, 1989, a Third Amendment to Credit Agreement dated
January 30, 1990, a Fourth Amendment to Credit
174
Agreement dated May 16, 1991, a Fifth Amendment to Credit Agreement dated
July 31, 1992, a Sixth Amendment to Credit Agreement dated January 31, 1993, a
Seventh Amendment to Credit Agreement dated March 31, 1993, an Eighth Amendment
to Credit Agreement dated July 26, 1993, a Ninth Amendment to Credit Agreement
dated March 4, 1994, Forbearance Agreement dated April 14, 1994, a Tenth
Amendment to Credit Agreement and Restated Forbearance Agreement dated May 5,
1994, an Eleventh Amendment to Credit Agreement and Restated Forbearance
Agreement dated as of December 1, 1994, a Twelfth Amendment to Credit Agreement
and Restated Forbearance Agreement dated as of May 1, 1995, a Thirteenth
Amendment to Credit Agreement and Restated Forbearance Agreement dated as of
September 1, 1995, a Fourteenth Amendment to Credit Agreement and Forbearance
Agreement dated as of January 1, 1996, a Fifteenth Amendment to Credit
Agreement dated effective as of April 1, 1996 and a Sixteenth Amendment to
Credit Agreement and Restated Forbearance Agreement dated as of June 30, 1996
(collectively, as they may be further modified, amended and restated from time
to time, referred to as the "Loan Agreements"). Capitalized terms used but not
defined in this Note shall have the same meanings as in the Loan Agreements.
This Note is secured by, among other collateral, the collateral granted to the
Bank under the terms of the Loan Agreements (and all agreements referred to or
incorporated therein). The failure to make any payment when due under this
Note or the occurrence of any default under the Loan Agreements (or any
other agreements referred to or incorporated therein) shall be deemed a default
hereunder, and in any such events, the holder of this Note shall be entitled to
accelerate the maturity of the debt evidenced hereby and have all rights and
remedies afforded by law or available under the Loan Agreements (and all other
agreements referred to or incorporated therein).
This Note is in substitution and exchange for a Fifth Amended and Restated
Term Note dated as of January 1, 1996, in the original principal amount
of $696,962.00 (the "Old Note"), and shall not be deemed a novation or to have
paid, terminated, extinguished or discharged the undersigned's indebtedness
evidenced by the Old Note, all of which indebtedness shall continue under and
be evidenced and governed by this Note. The Old Note is amended and restated
in its entirety by this Note. Any reference in any other document or
instrument (including but not limited to the Loan Agreements) to the Old Note
shall constitute a reference to this Note.
This Note may be prepaid in whole or in part at any time. All partial
prepayments shall be applied to the scheduled installments of principal
in inverse order of maturity.
The undersigned, and all endorsers and guarantors, hereby severally waive
valuation and appraisement, presentment, protest and demand, notice of
protest, demand and dishonor and nonpayment of this Note, and expressly agree
that the maturity of this Note, or any payment due under this Note, may be
extended from time to time without in any way affecting the liability of the
undersigned or said endorsers or guarantors.
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This Note, made in the State of Michigan, shall be governed and construed
according to the internal laws of Michigan.
RIVIERA TOOL COMPANY,
successor by merger to Riviera Die & Tool, Inc. f/k/a
R.D.T., Inc., a Michigan corporation
By: /s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------
Title: CFO
-----------------
0000 Xxxxxxxxx Xxxxxxx X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
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AMENDED AND RESTATED
GENERAL SECURITY AGREEMENT
(All Business Collateral)
RECITALS
A. On or about April 20, 1988, Riviera Die & Tool, Inc., formerly
known as R.D.T., Inc. ("Die"), and Riviera Tool Company, formerly known
as Riviera Die & Tool, Inc. ("Riviera") each separately executed each of the
following documents in favor of NBD Bank, formerly know as NBD Bank, N.A.
("NBD"), granting a first priority, properly perfected security interest in
substantially all of their respective personal property:
1. Security Agreement (Accounts, General Intangibles and Chattel
Paper);
2. Security Agreement (Inventory); and
3. Security Agreement (Equipment).
The foregoing are collectively referred to as the "Original Security
Documents".
B. In or about June 1996, Die and Riviera, Die's parent corporation
and guarantor of Die's obligations to NBD, contacted NBD to request that
NBD consent to a merger of Die and Riviera, with Riviera to be the surviving
corporation. NBD consented to this merger pursuant to the terms of a Sixteenth
Amendment to Credit Agreement and Restated Forbearance Agreement (the
"Sixteenth Amendment") of even date herewith.
C. As a condition of the Sixteenth Amendment, NBD, Die and Riviera
desire to enter into this Amended and Restated General Security
Agreement (All Business Collateral) in the name of both Die and Riviera to
continue the grant of security under the Original Security Documents and
to clarify that NBD continues to hold a security interest in and against any
and all personal property that Die may continue to own individually after its
merger into Riviera, and any and all personal property that Riviera may
continue to own individually after the merger.
WHEREFORE, based on the foregoing land other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Die and Riviera hereby agree as follows:
1. GRANT OF SECURITY INTEREST
The undersigned, Riviera Tool Company, a Michigan corporation, as
successor by merger to Riviera Die & Tool, Inc., f/k/a R.D.T., Inc., with
offices at 0000 Xxxxxxxxx Xxxxxxx X.X., Xxxxx Xxxxxx, Xxxxxxxx, 00000
(hereinafter collectively referred to as "Debtor"), grants to NBD Bank, a
Michigan banking corporation, with offices at 000 Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx
177
48226 (hereinafter referred to as "NBD"), a first lien and security interest in
all of Debtor's now owned and hereafter acquired or arising: goods, equipment,
vehicles, fixtures, inventory, documents, general intangibles (including all
federal and state tax refunds, royalty payments such as under patent, trade
xxxx or other licensing arrangements, patents, trademarks and copyrights
[including but not limited to the patents, trademarks and copyrights listed on
Exhibit A attached to and made a part of this Agreement], proceeds of
condemnation, awards, proceeds of judgments and proceeds of fire and other
property insurance, such as business interruption insurance, all causes of
action (including, without limitation, causes of action and recoveries under 11
U.S.C. Sections 542 - 550 and 553), and all earned and unearned insurance
premium refunds) accounts, accounts receivable, contract rights, chattel paper,
choses in action and instruments, and all additions and accessions to, all
spare and repair parts, special tools, equipment and replacements for, all
returned or repossessed goods, the sale of which gave rise to, and all proceeds
and products of the foregoing wherever located ("Collateral") to secure all
Debtor's present and future debts, obligations and liabilities to NBD, its
parent corporation, its subsidiaries, and its affiliates (including NBD
Equipment Finance, Inc.) (each, an "NBD Affiliate" and collectively, the "NBD
Affiliates"), or any one or more of the foregoing, howsoever evidenced,
including, without limitation (1) all of Debtor's obligations to NBD under a
Credit Agreement, executed by Die, dated April 20, 1988, a Sixteenth Amendment
to Credit Agreement and Restated Forbearance Agreement, executed by Debtor,
dated June 30, 1996 (as may be amended or restated from time to time, and along
with all prior amendments and/or restatements, the "Loan Agreement") and under
all documents executed in connection therewith or referred to or incorporated
therein or other agreements between Debtor and NBD (and/or NBD Affiliates) of
even date or given hereafter; (2) all obligations now or hereafter guaranteed
or endorsed by Debtor; and (3) all costs of enforcement of the rights granted
to NBD under this General Security Agreement (this "Agreement"), such as
reasonable attorneys' fees and court costs (all of Debtor's obligations to NBD
and NBD Affiliates described in this paragraph are referred to
collectively as the "Obligations").
2. DEBTOR'S WARRANTIES
Debtor warrants that while any of the Obligations are unpaid:
(a) OWNERSHIP. Debtor is the owner of the Collateral free of all
encumbrances and security interests (except NBD's security interest and
Permitted Liens as defined in the Loan Agreement), and chattel paper
constituting Collateral evidences a perfected security interest in the goods
covered by it, free from all other encumbrances and security interests, and no
financing statement (other than NBD's or Permitted Liens) is on file covering
the Collateral or any of it. If inventory is represented or covered by
documents of title, Debtor is the owner of the documents, free of all
encumbrances and security interests other than NBD's security interest and
warehouseman's charges, if any, not delinquent.
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(b) SALE OF GOODS OR SERVICES RENDERED. Each account and chattel paper
constituting Collateral arose from the performance of services by Debtor or
from a bona fide sale or lease of goods, which have been delivered or shipped
to the account debtor and for which Debtor has genuine invoices, shipping
documents or receipts.
(c) ENFORCEABILITY. Each account, contract right and chattel paper
constituting Collateral is genuine and enforceable against the account
debtor according to its terms. It and the transaction out of which it arose
comply with all applicable laws and regulations. The amount represented by
Debtor to NBD as owing by each account debtor is the amount actually owing, and
is not subject to setoff, credit, allowance or adjustment, except discount for
prompt payment, nor has any account debtor returned the goods or disputed
liability.
(d) DUE DATE. No payment on any account or chattel paper constituting
Collateral is more than 60 days overdue, there has been no default
according to the terms of any such Collateral and no step has been taken to
foreclose the security interest it evidences or otherwise enforce its payment.
(e) FINANCIAL CONDITION OF ACCOUNT DEBTOR. Debtor has no notice or
knowledge of anything which might impair the credit standing of any account
debtor.
(f) CONDITION. The inventory constituting Collateral is in good
condition and, in the case of goods held for sale (other than trade-ins
or repossessed goods), is new and unused except as NBD may otherwise consent in
writing.
(g) OTHER AGREEMENTS. Debtor is not in default under any agreement for
the payment of money.
(h) AUTHORITY TO CONTRACT. The execution and delivery of this
Agreement and any instruments evidencing Obligations will not violate or
constitute a breach of Debtor's Articles of Incorporation, Bylaws or any
agreement or restriction to which Debtor is a party or is subject.
(i) ACCURACY OF INFORMATION. All information, certificates or
statements given to NBD pursuant to this Agreement shall be true and
complete in all material respects, when given.
(j) ADDRESSES. The address of Debtor's chief executive office,
is as set forth above. The other address(es) of Debtor's
businesses, if any are ______________________________________. Such locations
shall not be changed without prior written consent of NBD, but the
Collateral, wherever located, is covered by this Agreement.
(k) CHANGE OF NAME OR ADDRESS. Debtor shall provide NBD 30 days prior
written notice of any change in its name or address.
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(l) FIXTURES. All fixtures, if any, will be affixed to real
estate, the legal description of which is contained on Exhibit B attached
hereto and made a part hereof, and the name of the record owner thereof, if not
Debtor, is specified on Exhibit B.
3. SALE AND COLLECTIONS
(a) SALE OF INVENTORY. So long as no event of default exists as to any
of the Obligations or under this Agreement, Debtor may: (i) sell inventory in
the ordinary course of Debtor's business; or (ii) with the prior written
consent of NBD, lease inventory on terms approved by NBD.
(b) VERIFICATION AND NOTIFICATION. NBD may verify Collateral in any
manner, at any time, and from time to time, and Debtor shall assist NBD in
so doing. Anything contained herein to the contrary notwithstanding, NBD may
at any time, and Debtor shall, thereafter, upon request of NBD, notify the
account debtors to make payment directly to NBD, and NBD may enforce collection
of, settle, compromise, extend or renew the indebtedness of such account
debtors. Until account debtors are otherwise notified, Debtor, as agent
for NBD, shall make collections on the Collateral. NBD may also, at any time,
notwithstanding any other provision of this Agreement, notify the bailee of any
Inventory of its security interest therein.
(c) DEPOSIT WITH NBD. If an Event of Default has occurred and notice of
such Event of Default has been given in writing to Debtor, then all proceeds of
Collateral received by Debtor shall be held by Debtor upon an express trust for
NBD, shall not be commingled with any other funds or property of Debtor, and
shall be turned over to NBD in precisely the form received (but endorsed by
Debtor if necessary for collection) not later than the business day following
the day of their receipt. If Debtor fails to endorse any item NBD, as Debtor's
attorney in fact, may endorse all such items. All proceeds of Collateral
received by NBD directly or from Debtor shall be applied against the
Obligations in such order and at such times as NBD shall determine.
(d) CLEARANCE OF CHECKS. All checks and other items shall be credited
to Debtor's account after allowing two (2) business days for clearance
thereof.
4. DEBTOR'S COVENANTS
Debtor agrees:
(a) MAINTENANCE OF COLLATERAL. Debtor shall: maintain the Collateral in
good condition and repair and not permit its value to be impaired; keep it free
from all liens, encumbrances and security interests (other than NBD's security
interest and Permitted Liens);
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180
defend it against all claims and legal proceedings by persons other than NBD;
pay and discharge when due all taxes, license fees, levies and other
charges upon it; not sell, lease or otherwise dispose of it or permit it to
become a fixture or an accession to other goods, except for sales or leases of
inventory as provided in this Agreement; not permit it to be used in violation
of any applicable law, regulation or policy of insurance; and, as to Collateral
consisting of instruments and chattel paper, preserve rights in it against
prior parties. Loss of or damage to the Collateral shall not release Debtor
from any of the Obligations.
(b) INSURANCE. Debtor shall keep the Collateral and NBD's interest in
it insured under policies with such provisions, for such amounts and by
such insurers as shall be satisfactory to NBD from time to time, and shall
furnish duplicate originals of all such policies of insurance to NBD, with
lender's loss payable or standard mortgagee endorsements showing NBD's interest
in such form as NBD shall approve. If an insured casualty has occurred then
(i) Debtor assigns (and directs any insurer to pay) to NBD the proceeds of all
such insurance and any premium refund, (ii) authorizes NBD to endorse in the
name of Debtor any instrument for such proceeds or refunds and, at the option
of NBD, to apply such proceeds and refunds to any unpaid balance of the
Obligations, whether or not due, and/or to restoration of the Collateral,
returning any excess to Debtor, and (iii) authorizes NBD, in the name of Debtor
or otherwise, to make, adjust and/or settle claims under any credit insurance
financed by NBD or any insurance on the Collateral, or cancel the same. All
such insurance policies shall contain a provision that no cancellation or
material alteration therein may be effected without giving NBD 30 days prior
written notice thereof.
(c) MAINTENANCE OF SECURITY INTEREST. Debtor shall pay all expenses,
and, upon request, take any action reasonably deemed advisable by NBD to
preserve the Collateral or to establish, determine priority of, perfect,
continue perfected, terminate and/or enforce NBD's interest in it or rights
under this Agreement.
(d) COLLATERAL RECORDS AND STATEMENTS. Debtor shall keep accurate
and complete records respecting the Collateral. At such times as NBD may
require, Debtor shall furnish to NBD a statement certified by the chief
financial officer of Debtor, and in such form and containing such information
as may be prescribed by NBD, showing the current status and value of the
Collateral.
(e) INSPECTION OF COLLATERAL. At reasonable times, during business
hours, NBD may examine the Collateral and Debtor's records pertaining to it,
wherever located, and make copies of records. Debtor shall assist NBD in so
doing.
(f) UNITED STATES CONTRACTS. If any accounts or contract rights
constituting Collateral arose out of contracts with the United States or any of
its departments, agencies or instrumentalities, Debtor will notify NBD and
execute writings required by NBD in order that all money due or to become due
under such contracts shall be assigned to NBD and proper notice of the
assignment given under the Federal Assignment of Claims Act, as amended, or
similar law now or hereafter in force.
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181
(g) MODIFICATIONS. Without the prior written consent of NBD, Debtor
shall not alter, modify, extend, renew or cancel any Collateral.
(h) RETURNS AND REPOSSESSIONS. Debtor shall promptly notify NBD of the
return to or repossession by Debtor of goods underlying any Collateral and if
requested by NBD, Debtor shall hold and dispose of them only as NBD directs.
5. RIGHTS OF NBD
(a) AUTHORITY TO PERFORM FOR DEBTOR. Upon the occurrence of an Event
of Default or if Debtor fails to perform any of Debtor's duties set forth in
this Agreement or in any evidence of or document or agreement relating to the
Obligations, NBD is authorized, in Debtor's name or otherwise, to take any such
action including, without limitation, signing Debtor's name or paying any
amount so required, and the cost shall be one of the Obligations secured by
this Agreement and shall be payable by Debtor upon demand, with interest at the
default rate specified in the Loan Agreement .
(b) POWERS OF ATTORNEY. Debtor irrevocably appoints any officer of NBD
as Debtor's attorney, with power to receive, open and dispose of all mail
addressed to Debtor; to notify the Post Office authorities to change the
address for delivery of all mail addressed to Debtor to such address as NBD may
designate; and to endorse the name of Debtor upon any instruments which may
come into NBD's possession. Debtor agrees that Obligations may be created by
drafts drawn on NBD by shippers of inventory to Debtor. Debtor authorizes NBD
to honor any such draft when accompanied by invoices aggregating the amount of
the draft and describing inventory to be shipped to Debtor. Debtor irrevocably
appoints any employee of NBD as Debtor's attorney, with full power to sign
Debtor's name on any instrument evidencing an Obligation, or any renewals or
extensions, for the amount of such drafts honored by NBD. Such instruments may
be payable at fixed times or on demand, and shall bear interest at the rate
from time to time fixed by NBD. Debtor agrees, upon request of NBD, to execute
any such instruments. All such powers of attorney being coupled with an
interest shall be irrevocable so long as any Obligation remains outstanding
to NBD. All acts of any such attorney are ratified and approved, and he or she
will not be liable for any act or omission or for any error of judgment or
mistake of fact or law.
(c) LEASE OF LEDGERS. In addition to NBD's other Collateral, Debtor
hereby grants NBD a lease and first security interest in all of Debtor's books
of accounts, ledgers, computer software, computer printouts and other
computerized records and cabinets in which there are reflected or maintained
the Collateral in which NBD has a security interest, or which relate to any
other Collateral NBD may hold from Debtor and all supporting evidence and
documents relating to such security in the form of written applications, credit
information, account cards, payment records, correspondence, delivery and
installation certificates, invoice copies, delivery receipts, notes and other
evidences of indebtedness, insurance certificates and the
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like. For convenience, these documents are called "Business Records".
The Business Records, presently included in this Agreement, are described as
follows:
accounts receivable subsidiary ledger including unpaid invoice file,
cash receipts journal, cash disbursements journal and filing cabinets
containing : customer orders, correspondence, paid invoice file and
any other books and records, filing cabinets, or places of storage of
data and information, including all computer storage facilities,
records and software usually located at 0000 Xxxxxxxxx Xxxxxxx
X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000 or elsewhere.
(d) NON-LIABILITY OF NBD. NBD has no duty to determine the validity of
any invoice, the authority of any shipper to ship goods to Debtor or compliance
with any order of Debtor. NBD has no duty to protect, insure, collect or
realize upon the Collateral or preserve rights in it against prior parties.
Debtor releases NBD from any liability for any act or omission relating to the
Obligations, the Collateral or this Agreement, except NBD's willful misconduct.
6. EVENTS OF DEFAULT
The occurrence of an Event of Default or a default under (1) the Loan
Agreement or (2) under any other agreement between Debtor and NBD or Debtor and
any NBD Affiliate shall be deemed a default hereunder, as shall the
non-performance or inability to perform any of the covenants and agreements of
the Debtor in this Agreement. After the occurrence of default, all of the
Obligations due from the Debtor to NBD and each NBD Affiliate shall be
immediately due and payable at NBD's discretion.
7. REMEDIES
Upon the occurrence of an Event of Default, NBD shall have all rights and
remedies for default provided by the Uniform Commercial Code ("UCC") as well
as any other applicable law and any evidence of or document or agreement
relating to the Obligations. With respect to such rights and remedies:
(a) ASSEMBLING COLLATERAL. NBD may require Debtor to assemble
the Collateral and to make it available to NBD at any convenient place
designated by NBD.
(b) NOTICE OF DISPOSITION. Written notice, when required by law, sent
to any address of Debtor, shown as provided for in this Agreement, at least 15
calendar days (counting
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the day of sending) before the date of a proposed disposition of the
Collateral is reasonable notice.
(c) EXPENSES AND APPLICATION OF PROCEEDS. Debtor shall reimburse NBD
for any expense incurred by NBD in protecting or enforcing its rights under
this Agreement, including, without limitation, reasonable attorneys' fees and
court costs, and all expenses of taking possession, holding, preparing for
disposition and disposing of the Collateral. After deduction of such expenses,
NBD may apply the proceeds of disposition to the Obligations in such order and
amounts as it elects.
(d) WAIVER. NBD may permit Debtor to remedy any default without waiving
the default so remedied, and NBD may waive any default without waiving any
other subsequent or prior default by Debtor.
8. PERSONS BOUND
This Agreement benefits NBD, its successors and assigns, and binds the
Debtor and its personal representatives, successors and assigns. Neuter terms
as used herein shall also refer, where applicable, to the feminine
gender and the masculine gender and the singular reference shall also include
the plural of any word if the context so requires.
9. INTERPRETATION
To the extent permissible under the UCC, the validity, construction and
enforcement of this Agreement shall be determined and governed by the internal
laws of Michigan. All terms not otherwise defined have the meanings
assigned to them by the Michigan Uniform Commercial Code. Invalidity of
any provision of this Agreement shall not affect the validity of any other
provision.
10. LOAN AGREEMENT CONTROLS
Anything contained in this Agreement to the contrary notwithstanding, in
the event of an express conflict between the terms hereof and the terms of the
Loan Agreement, the terms and provisions of the Loan Agreement shall govern and
control. Terms defined in the Loan Agreement shall have the same meaning in
this Agreement.
Signed and delivered this ___ day of__________, 1996.
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RIVIERA DIE & TOOL, INC. RIVIERA TOOL COMPANY, successor by
merger to Riviera Die & Tool, Inc., f/k/a
R.D.T., Inc.
By: Xxxxx X. Xxxxxx By: Xxxxx X. Xxxxxx
------------------------ ---------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
----------------- --------------------------
Title: CFO Title: CFO
---------------- -------------------------
ACCEPTED AT DETROIT, MICHIGAN
ON THE DATE WRITTEN ABOVE:
NBD BANK
a Michigan bank corporation
By:
----------------------------
Name:
---------------------
Title:
-------------------
Exhibit A - List of Patents, Trademarks, and Copyrights
Exhibit B - Legal Description and Name of Record Owner
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