Exhibit 10.1

 

AMENDMENT NO. 4 TO LOAN DOCUMENTS

 

SYPRIS SOLUTIONS, INC. (“Holdings”), SYPRIS TECHNOLOGIES, INC. (“Technologies”),
SYPRIS ELECTRONICS, LLC (“Electronics”), SYPRIS DATA SYSTEMS, INC. (“Data
Systems”), SYPRIS TECHNOLOGIES MARION, LLC (“Marion”), SYPRIS TECHNOLOGIES
KENTON, INC. (“Kenton”), SYPRIS TECHNOLOGIES MEXICAN HOLDINGS, LLC (“Mexican
Holdings”), SYPRIS TECHNOLOGIES NORTHERN, INC. (“Northern”), SYPRIS TECHNOLOGIES
SOUTHERN, INC. (“Southern”), and SYPRIS TECHNOLOGIES INTERNATIONAL, INC.
(“International”) (each a “Borrower”, and collectively the “Borrowers”) and PNC
BANK, NATIONAL ASSOCIATION, as Agent (“PNC”, and in such capacity, “Agent”) and
Lender, agree as follows in this Amendment No. 4 to Loan Documents (the
“Amendment”) effective as of September 30, 2015 (the “Effective Date”):

 

1.

Recitals.

 

 

1.1

As of May 12, 2011, Borrowers and PNC, as Lender and Agent, entered into a
Revolving Credit and Security Agreement (as amended, extended, modified, or
restated, the “Loan Agreement”). Capitalized terms used herein and not otherwise
defined will have the meanings given such terms in the Loan Agreement as
amended. The Loan Agreement, the Other Documents, and all related loan and/or
security documents related thereto are referred to herein as the “Loan
Documents”.

 

 

1.2

Borrowers have requested, and Agent and Lenders have agreed, to amend the Loan
Documents, on the terms and subject to the conditions set forth herein.

 

2.

Amendments.

 

 

2.1

New Definition. Section 1.2 of the Loan Agreement is hereby amended to add the
following defined term in alphabetical order:

 

“Fourth Amendment Date” shall mean September 30, 2015.

 

 

2.2

Definition. Section 1.2 of the Loan Agreement is hereby amended by amending and
restating the following defined term:

 

“Maximum Revolving Advance Amount” shall mean $8,500,000.

 

 

2.3

Borrowing Base. Section 2.1 of the Loan Agreement is hereby amended and restated
in its entirety as follows:

 

2.1.     Revolving Advances.

 

(a)     Amount of Revolving Advances. Subject to the terms and conditions set
forth in this Agreement including Section 2.1(b), each Lender, severally and not
jointly, will make Revolving Advances to Borrowers in aggregate amounts
outstanding at any time equal to such Lender’s Commitment Percentage of the
lesser of (x) the Maximum Revolving Advance Amount, minus the Maximum Undrawn
Amount of all Letters of Credit or (y) an amount equal to the sum of:

 

(i)     up to 85% of Eligible Receivables, plus

  

 
 

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(ii)     up to the lesser of (A) 75% of Eligible Finished Goods Inventory, or
(B) 85% of the appraised orderly liquidation value of Eligible Finished Goods
Inventory (as evidenced by an Inventory appraisal satisfactory to Agent in its
Permitted Discretion exercised in good faith), in each case other than Meritor
Guaranteed Inventory, plus

 

(iii)     up to the lesser of (A) 65% of Eligible Raw Material Inventory, or (B)
85% of the appraised orderly liquidation value of Eligible Raw Materials
Inventory (as evidenced by an Inventory appraisal satisfactory to Agent in its
Permitted Discretion exercised in good faith), in each case other than Meritor
Guaranteed Inventory, plus

 

(iv)     up to the lesser of (A) 65% of Eligible Work-In-Process Inventory, (B)
85% of the appraised orderly liquidation value of Eligible Work-In-Process
Inventory (as evidenced by an Inventory appraisal satisfactory to Agent in its
Permitted Discretion exercised in good faith), in each case other than Meritor
Guaranteed Inventory, or (C) $10,000,000 plus

 

(v)     up to 90% of the net book value of Meritor Guaranteed Inventory, minus

 

(vi)     the amount by which the sum of Section 2.1(a)(y)(ii) plus Section
2.1(a)(y)(iii) plus Section 2.1(a)(y)(iv) plus Section 2.1(a)(y)(v) exceeds
$10,000,000, plus

 

(vii)     the Maximum Undrawn Amount of all Letters of Credit, minus

 

(viii)     such reserves as Agent may deem proper and necessary from time to
time in its Permitted Discretion, subject to Section 2.1(b) hereof.

 

The amount derived from the sum of Section 2.1(a)(y) at any time and from time
to time shall be referred to as the “Formula Amount”. The Revolving Advances
shall be evidenced by one or more secured promissory notes (collectively, the
“Revolving Credit Note”) substantially in the form attached hereto as Exhibit
2.1(a).

 

(b)     Discretionary Rights. The Advance Rates may be increased or decreased by
Agent at any time and from time to time in the exercise of its Permitted
Discretion. Each Borrower consents to any such increases or decreases and
acknowledges that decreasing the Advance Rates or increasing or imposing
reserves may limit or restrict Advances requested by Borrowing Agent. The rights
of Agent under this subsection are subject to the provisions of Section 16.2(b).
Notwithstanding the foregoing, Agent agrees not to adjust the Advance Rates in
effect on the Third Amendment Date or institute any new reserves, except to the
extent reasonably required by Exigent Circumstances as determined by Agent in
its Permitted Discretion.

  

 
 

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(c)     Consigned Inventory. In the event that any Inventory supplied by Meritor
after the Third Amendment Date becomes subject to a consignment or consignment
agreement for which Agent has been noticed under applicable law, all Inventory
related to Meritor products, including without limitation, Meritor Guaranteed
Inventory, shall be immediately deemed to be ineligible under the Formula
Amount.

 

 

3.

Representations, Warranties and Covenants. To induce Agent and Lenders to enter
into this Amendment, each Borrower represents, warrants, and covenants, as
applicable, as follows:

 

 

3.1

No Claims. Each Borrower represents and warrants that it has no claims,
counterclaims, setoffs, actions or causes of actions, damages or liabilities of
any kind or nature whatsoever whether at law or in equity, in contract or in
tort, existing as of the date of this Amendment (collectively, “Claims”) against
Agent or Lender, their direct or indirect parent corporations or any direct or
indirect Affiliates of such parent corporations, or any of the foregoing's
respective directors, officers, employees, agents, attorneys and legal
representatives, or the heirs, administrators, successors or assigns of any of
them (collectively, “Lender Parties”) that directly or indirectly arise out of,
are based upon or are in any manner connected with any Prior Related Event
(defined below). As an inducement to Agent and Lender to enter into this
Amendment, each Borrower on behalf of itself, and all of its respective
successors and assigns hereby knowingly and voluntarily releases and discharges
all Lender Parties from any and all Claims, whether known or unknown in
existence as of the date hereof, that directly or indirectly arise out of, are
based upon or are in any manner connected with any Prior Related Event. As used
herein, the term “Prior Related Event” means any transaction, event,
circumstance, action, failure to act, occurrence of any sort or type, whether
known or unknown, which occurred, existed, was taken, permitted or begun at any
time prior to the Effective Date or occurred, existed, was taken, was permitted
or begun in accordance with, pursuant to or by virtue of any of the terms of the
Loan Documents or any documents executed in connection with the Loan Documents
or which was related to or connected in any manner, directly or indirectly to
the relationship between the Borrowers and Agent or Lender or to the extension
of credit represented by the Loan Documents.

 

 

3.2

Authorization. Each Person executing this Amendment on behalf of a Borrower is a
duly elected and acting manager or officer of such Borrower and is duly
authorized by the board of directors, members or managers, as applicable, of
such Borrower to execute and deliver this Amendment on behalf of such Borrower.
The entry into and performance of this Amendment and the related documents have
been duly authorized by each Borrower. Each Borrower has the full right, power
and authority to enter into this Amendment and perform its respective
obligations hereunder.

 

 

3.3

No Misrepresentations. No information or material submitted to Agent in
connection with this Amendment contains any material misstatement or
misrepresentation nor omits to state any material fact or circumstance.

 

 

3.4

No Conflicts. The execution and delivery of this Amendment and all deliveries
required hereunder, and the performance by each Borrower of its obligations
hereunder do not and will not conflict with any provision of law or the
organizational documents of Borrowers or of any agreement binding upon
Borrowers.

  

 
 

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3.5

Enforceability. This Amendment and each of the related documents is a legal and
valid and binding obligation of Borrowers, enforceable against Borrowers in
accordance with its terms.

 

 

3.6

Events of Default. No Default or Event of Default is continuing under any of the
Loan Documents.

 

 

3.7

Ratification. Except as expressly modified herein, the Loan Documents, as
amended, are and remain in full force and effect. The Loan Documents are hereby
ratified and confirmed as the continuing obligation of the Borrowers. The
Borrowers hereby reaffirm and grant to the Agent a security interest in and lien
upon all of the Collateral.

 

4.

Conditions Precedent. The closing and the effectiveness of this Amendment is
subject to the following conditions precedent:

 

 

4.1

Amendment. Agent shall have received this Amendment duly executed by the
Borrowers.

 

 

4.2

Meritor Guaranty. Agent shall have received an amendment to the guaranteed
inventory agreement executed by Meritor, pursuant to which Meritor shall
guaranty to Agent that, subject to the terms and conditions of such amendment,
it shall purchase the Meritor Guaranteed Inventory free and clear of offsets
through November 30, 2015.

 

 

4.3

Amendment Fee. Agent shall have received payment of, or shall have debited from
Borrowers’ Accounts, the $500,000 fee earned in connection with the execution of
Amendment No. 3 to Loan Documents among Borrowers, Lenders, and Agent, dated
June 29, 2015 (“Amendment No. 3”) as set forth in Section 7.16 of such
amendment.

 

 

4.4

Other. All corporate and other proceedings, and all documents, instruments and
other legal matters in connection with this Amendment and the related
documentation shall be satisfactory in form and substance to Agent and its
counsel.

 

5.

Amended and Restated Post-Closing Covenants. The following covenants shall amend
and restate the post-closing conditions contained in Sections 7.14 and 7.15 of
Amendment No. 3:

 

 

5.1

Refinancing Documents. On or before October 20, 2015, the Borrowers shall have
received, and shall have provided to Agent, a set of loan documents
substantially reflecting the mutual agreement in principle of the Borrowers and
its prospective lender (who is reasonably acceptable to Agent based upon its
financial strength metrics and its wherewithal to close such a transaction) in
form and substance reasonably acceptable to Agent, evidencing that upon
execution of such documents, Borrowers shall repay the Obligations in full on or
before October 30, 2015; provided that Borrowers shall immediately notify Agent
in the event that Borrowers are advised at any time and in any manner that the
lenders currently preparing such loan documents have elected to not pursue the
extension of a loan to Borrowers, which event shall be deemed to be an Event of
Default.

 

 

5.2

Repayment. Borrowers shall cause all Obligations to be repaid in full on or
before October 30, 2015.

  

 
 

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6.

Fees

 

 

6.1

Fee Deferral. Agent hereby acknowledges and agrees that the payment of the fee
set forth in Section 7.5.2 of Amendment No. 2 to Loan Documents dated March 12,
2015 among Borrowers, Lenders, and Agent shall be deferred until the earlier of
October 30, 2015 or payment in full of the Obligations.

 

 

6.2

Accommodation Fee. Borrowers hereby agree that Agent shall have earned in full
on October 5, 2015, an accommodation fee in the amount of $500,000 as of the
date hereof, which fee shall be due and payable in full on October 30, 2015;
provided, however, that if the Obligations are paid in full on or before October
30, 2015, such fee shall be waived.

 

7.

Security Interest. As security for the payment and performance of the
Obligations, and satisfaction by the Borrowers of all covenants and undertakings
contained in the Loan Agreement and other Loan Documents, each of the Borrowers
reconfirms the prior grant of the security interest in and first priority,
perfected lien in favor of Agent, for its benefit and the benefit of each
Lender, upon and to, all of its right, title and interest in and to the
Collateral, whether now owned or hereafter acquired, created or arising and
wherever located, and, to the extent not previously granted, hereby grants in
favor of Agent, for its benefit and the benefit of each Lender, a lien and
security interest in each Borrower’s right, title, and interest in and to the
litigation between Dana Limited and Sypris Technologies, Inc., and any
Affiliates.

 

8.

General.

 

 

8.1

This Amendment constitutes an “Other Document” as defined in the Loan Agreement.
The Loan Documents are hereby modified to include this Amendment within the
definition of the term “Other Documents” or “Loan Documents” as used therein.

 

 

8.2

All representations and warranties made by Borrowers herein will survive the
execution and delivery of this Amendment.

 

 

8.3

This Amendment will be binding upon and inure to the benefit of Borrowers,
Agent, and Lender and their respective successors and assigns.

 

 

8.4

This Amendment will in all respects be governed and construed in accordance with
the laws of the State of Ohio.

 

 

8.5

This Amendment and the documents and instruments to be executed hereunder
constitute the entire agreement among the parties with respect to the subject
matter hereof and shall not be amended, modified or terminated except by a
writing signed by the party to be charged therewith.

 

 

8.6

Each Borrower agrees to execute such other instruments and documents and provide
Agent with such further assurances as Agent may reasonably request to more fully
carry out the intent of this Amendment.

 

 

8.7

This Amendment may be executed in a number of identical counterparts. If so,
each such counterpart shall collectively constitute one agreement. Any signature
delivered by a party by facsimile transmission or other electronic means shall
be deemed to be an original signature hereto.

 

 

8.8

No provision of this Amendment is intended or shall be construed to be for the
benefit of any third party.

  

 
 

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8.9

THE PARTIES EACH HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER THIS AMENDMENT.

 

 

8.10

EACH BORROWER WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
SUCH BORROWER MAY HAVE TO CLAIM OR RECOVER FROM THE AGENT OR ANY LENDER IN ANY
LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.

 

Signature Page Follows

  

 
 

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Executed and effective

as of the Effective Date

 

SYPRIS SOLUTIONS, INC.

as Borrower

 

 

By:/s/ John R. McGeeney                        

Name: John R. McGeeney

Title: Vice President, General Counsel, and Secretary

 

SYPRIS TECHNOLOGIES, INC.

SYPRIS ELECTRONICS, LLC

SYPRIS DATA SYSTEMS, INC.

SYPRIS TECHNOLOGIES MARION, LLC

SYPRIS TECHNOLOGIES KENTON, INC.

SYPRIS TECHNOLOGIES MEXICAN HOLDINGS, LLC

SYPRIS TECHNOLOGIES NORTHERN, INC.

SYPRIS TECHNOLOGIES SOUTHERN, INC. SYPRIS TECHNOLOGIES INTERNATIONAL, INC.

as Borrowers

 

 

By:/s/ John R. McGeeney             

Name: John R. McGeeney

Title: General Counsel

 

PNC BANK, NATIONAL ASSOCIATION,

as Lender and Agent

 

 

By: /s/ Jay Danforth                       

Name: Jay Danforth

Title: Vice President

 

 

 

  

 

 

 

 

 

[SIGNATURE PAGE TO AMENDMENT NO. 4 TO LOAN DOCUMENTS]