Document:

ex10-2.htm

Exhibit 10.2

 

FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT

 

FIRST AMENDMENT (this “Amendment”), dated as of February 25, 2016 to that certain Loan and Security Agreement dated as of October 30, 2015 (as may be amended, restated, supplemented or modified from time to time, the (“Loan Agreement”) among Sypris Solutions, Inc., a Delaware corporation (“Solutions”), Sypris Data Systems, Inc., a Delaware corporation (“Systems”), Sypris Electronics, LLC, a Delaware limited liability company (“Electronics”), Sypris Technologies, Inc., a Delaware corporation (“Technologies”), Sypris Technologies International, Inc., a Delaware corporation (“International”), Sypris Technologies Kenton, Inc., a Delaware corporation (“Kenton”), Sypris Technologies Marion, LLC, a Delaware limited liability company (“Marion”), Sypris Technologies Mexican Holdings, LLC, a Delaware limited liability company (“Mexican Holdings”), Sypris Technologies Northern, Inc., a Delaware corporation (“Northern”) and Sypris Technologies Southern, Inc., a Delaware corporation (“Southern”, and together with Solutions, Systems, Electronics, Technologies, International, Kenton, Marion, Mexican Holdings and Northern, individually or collectively as the context may require, “Borrower”), each of Sypris Technologies Toluca, S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable (“Toluca”) and Sypris Technologies México, S. de R.L. de C.V., a Mexican Sociedad de Responsabilidad Limitada de Capital Variable (“Mexico”, and together with Toluca, collectively, the “Guarantors”), and Great Rock Capital Partners Management, LLC, as administrative agent, and together with Great Rock Capital Partners Fund I, LLC, collectively, “Lender”). Terms which are capitalized in this Amendment and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement.

 

WHEREAS, Borrower has requested and Lender has agreed to amend the Loan Agreement on the terms and subject to the conditions contained in this Amendment.

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

Section One. Amendments.      Effective upon the satisfaction of the conditions set forth in Section Two hereof, the Loan Agreement is hereby amended as follows:

 

(a)     Each of the defined terms “Fixed Charge Test Commencement Date”, “Permitted Indebtedness” and “Subordinated Debt” shall be amended and restated in its entirety and the defined term “Retained Net Cash Proceeds” shall be added as follows:

 

“Fixed Charge Test Commencement Date” means the first day after the First Amendment Effective Date upon which Borrowers’ Excess Availability is less than $3,000,000 provided that if the Permitted Sale-Leaseback Transaction shall not be consummated (pursuant to documentation in form and substance satisfactory to Lender delivered to Lender provided that such documentation shall provide for a closing where sale proceeds are paid and distributed simultaneously with Lender’s release of the mortgage encumbering the Toluca Property) on or prior to March 11, 2016, then, the $3,000,000 threshold shall automatically increase to $4,000,000. 

 

 

 

 

 

 

“Permitted Indebtedness” means: (i) the Obligations: (ii) the Indebtedness existing on the date hereof described in Section 6 of the Disclosure Schedule; in each case along with extensions, refinancings, modifications, amendments and restatements thereof, provided, that (a) the principal amount thereof is not increased, (b) if such Indebtedness is subordinated to any or all of the Obligations, the applicable subordination terms shall not be modified without the prior written consent of Agent, and (c) the terms thereof are not modified to impose more burdensome terms upon any Loan Party; (iii) capitalized leases and purchase money Indebtedness secured by Permitted Liens in an aggregate amount not exceeding $100,000 at any time outstanding; (iv) Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business; (v) the Subordinated Debt owing by the Borrower in an aggregate amount not exceeding $6,500,000 (plus interest, less the aggregate amount of any payments made thereon after the Closing Date) at any time outstanding and then solely to the extent the Subordinated Debt is subject to, and permitted by, the Subordinated Debt Subordination Agreement; (vi) so long as it is subject to the Intercreditor Agreement, the ABL Permitted Indebtedness; and (vii) so long as such Indebtedness is on terms and conditions satisfactory to Agent and subject to a subordination agreement in form and substance satisfactory to Agent, additional subordination indebtedness in an original principal amount not to exceed the sum of (y) up to $5,000,000 but only to the extent incurred to satisfy the funding requirement with respect to the Cash Collateral Account set forth in clause (e)(ii) of the definition of Permitted Sale-Leaseback Milestones (and actually deposited in such Cash Collateral Account) plus (z) up to $1,500,000, but only to the extent incurred and contributed as a Curative Investment pursuant to the terms of Section 7.4.

 

“Retained Net Cash Proceeds” means the balance of the Net Cash Proceeds from the Permitted Sale-Leaseback Transaction, after distribution of Net Cash Proceeds from the Permitted Sale-Leaseback Transaction of Six Million Dollars ($6,000,000) to Lender’s Cash Collateral Account currently estimated in accordance with Exhibit A (Estimation of Toluca Net Cash Proceeds), and subject to changes in applicable currency exchange rates or actual expense variations from such estimates, plus an amount up to $1,000,000 of such Net Cash Proceeds to be released by Lender from the Cash Collateral Account subject to the satisfaction by the Borrowers of certain milestones set by Lender in connection with the Turnaround Plan, which satisfaction shall be in Lender’s sole discretion.

 

“Subordinated Debt” means (a) that indebtedness evidenced by that certain Amended and Restated Promissory Note dated on or about February 24, 2016 and issued by Borrowers in favor of Gill Family Capital Management, Inc., a Delaware corporation in an original principal amount equal to $6,500,000 and (b) all other unsecured Indebtedness subordinated in right of payment to the Obligations on terms acceptable to Lender in its Permitted Discretion.

 

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(b)     Interest Rate: Section 2.1 of the Loan Agreement shall be amended as follows: “ 9.0%” shall be deleted and replaced with “10.0%”.

 

(c)     Financial Advisor. Section 5.28 of the Loan Agreement shall be amended and restated in its entirety as follows:

 

“On or before February 26, 2016, Borrower shall, at its sole cost and expense, engage a financial advisor (the “FA”), acceptable to Lender in its reasonable discretion, pursuant to an engagement letter, the scope and terms of which shall be acceptable to Lender in its reasonable discretion, until such time as the Obligations have been indefeasibly paid in full or such earlier time upon mutual agreement of Lender and Borrower. The FA’s responsibilities shall be consistent with the updated engagement letter, dated as of the date hereof and be authorized by and the FA shall report directly to the Audit Committee (the “Audit Committee”) of the Board which is and shall be composed solely of “Independent Directors” (as defined in applicable NASDAQ listing requirements). The FA shall review the Borrower’s existing business plan and make recommendations in the form of a turnaround plan (the “Turnaround Plan”) which Turnaround Plan, including updated forecasts and projections shall be completed and delivered before March 11, 2016. Lender is authorized to communicate directly with the FA (including, without limitation, without Borrower being present) regarding all matters relating to the services to be rendered by the FA to Borrower, including, without limitation, to discuss all financial reports, business information, findings, recommendations and opinions of the FA. The FA is authorized and directed to communicate directly with Lender (including, without limitation, without Borrower being present) regarding all matters relating to the services to be rendered by the FA to Borrower, including, without limitation, to discuss all financial reports, business information, and all findings, recommendations and opinions of the FA. The FA shall be authorized and directed by Borrower to provide Lender with copies of all reports and other information prepared or reviewed by the FA. Lender may rely on any information provided by the FA as if provided directly by Borrower. The Borrower shall implement all actions reasonably recommended and deemed advisable by the FA, and approved by the Audit Committee and the Board of Directors, in connection with the Turnaround Plan.

 

 

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(d)     Optional Partial Prepayments: Section 1.8 (g) of the Loan Agreement shall be amended and restated in its entirety as follows: 

 

“(g) Optional Partial Prepayments of the Term Loan. Borrower shall be permitted to voluntarily prepay $6,000,000 of the Term Loan (or $5,000,000 in the event the Borrowers achieve the milestones referenced in the First Amendment) to the extent that such amounts are held in the Cash Collateral Account, in whole or in part, on or prior to the first anniversary of the First Amendment Effective Date. Borrower may, upon at least ten Business Days prior written notice to Agent, prepay the principal of the Term Loan in part. Each prepayment made pursuant to this Section 1.8 shall be accompanied by the payment of accrued interest to the date of such payment on the amount prepaid. Each such prepayment shall be applied against the remaining installments of principal due on the Term Loan in the inverse order of maturity (for the avoidance of doubt, any amount that is due and payable on the Maturity Date shall constitute an installment). Any payment pursuant to this Section 1.8(g) shall be accompanied by payment by Borrower of any Early Payment/Termination Premium then required as a result of such prepayment under the terms of the Fee Letter under the heading “Early Termination Fee”. 

 

(e)     Voluntary Termination of Facility: Section 1.8 (h) of the Loan Agreement shall be amended and restated in its entirety as follows: 

 

“(h)     Voluntary Termination of Facility. Borrower shall be permitted to voluntarily prepay $6,000,000 of the Term Loan (or $5,000,000 in the event the Borrowers achieve the milestones referenced in the First Amendment) to the extent that such amounts are held in the Cash Collateral Account, in whole or in part, on or prior to the first anniversary of the First Amendment Effective Date. Borrower may, on at least thirty days prior written notice received by Agent, terminate this Agreement and any commitments hereunder by repaying all of the outstanding Obligations in full in cash, including all principal, interest and fees with respect to the Term Loan and any Protective Advances, and an Early Payment/Termination Premium in the amount specified in the Fee Letter under the heading “Early Termination Fee”. From and after such date of termination, no Lender shall have any obligation whatsoever to extend any extensions of credit hereunder and all of its lending commitments hereunder (if any) shall be terminated.

 

(f) Mandatory prepayment of Cash Collateral: Section 5.17(c) shall be amended and restated in its entirety as follows: 

 

“(c)     Upon occurrence of (i) an Event of Default, (ii) the failure to consummate the Permitted Sale-Leaseback Transaction on or prior to August 31, 2016, or (iii) the failure of Borrower to have Excess Availability plus Qualified Cash (other than amounts on deposit in the Cash Collateral Account) of at least $5,000,000 at any time, Agent is authorized to instruct the bank maintaining the Cash Collateral Account to pay or transfer the balance of such Cash Collateral Account to or for the benefit of Agent, for application by Agent to repay the Obligations, to be allocated as a prepayment of the outstanding principal amount of the Term Loan (to be applied in the inverse order of maturity of the installments thereunder (for the avoidance of doubt, the amount that is due and payable on the Maturity Date constitutes an installment) and payment by Borrower of an Early Payment/Termination Premium which would then be required in connection therewith at such time under the terms of the Fee Letter under the heading “Early Termination Fee”.

 

 

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(f)     Revised Forecast and 13-week Budget. Schedule D to the Great Rock Loan Agreement shall be amended by adding the following weekly requirement: 

 

“On or before February 15, 2016 and thereafter, on or before the close of business each Thursday of each week, Borrower shall deliver to Lender a 13 week rolling cash flow model, prepared in good faith based upon assumptions which Borrower believes to be reasonable, including (i) a weekly cash flow forecast in reasonable detail satisfactory to Lender including receipts, disbursements and such line item detail as satisfactory to Lender, (ii) a weekly Borrowing Base calculation, (iii) weekly cumulative variance report, detailing and reconciling forecasted results and actual results (iv) an Accounts rollforward, prepared and delivered by either Borrower or the FA on a monthly basis (no later than the 15th day of each fiscal month).”

 

“On or before February 15, 2016 and thereafter, on or before the close of business on the 15th day of each calendar month thereafter, Borrower shall deliver to Lender an Inventory rollforward, prepared by either Borrower or the FA.”

 

(g)     Events of Default. Notwithstanding anything to the contrary in the Loan Agreement or any other Loan Document, failure by Borrower to satisfy any of the foregoing covenants and amended sections of the Loan Agreement within the applicable time frames set forth above (or such later date as Lender may agree in its sole discretion) shall constitute an immediate Event of Default under the Loan Agreement. The resignation of the FA without the replacement of the FA from a list of at least three (3) FA’s provided to Borrower within two (2) Business Days which are acceptable to Lender in its sole discretion, promptly, but in no event later than ten (10) Business Days after such list is provided to Borrower, shall be deemed an immediate Event of Default.

 

 

 

Section Two. Covenants. 

 

(a)     Borrower and Lender shall work cooperatively and in good faith to agree upon execution copies of all documents, in form and substance satisfactory to Lender and Borrower related to the sale of the Toluca Property, including amended documentation with respect to such sale, in form and substance satisfactory to Lender and Borrower; and

 

 

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(b)     Proceeds of Permitted Sale Leaseback Transaction. Lenders shall provide any written consent reasonably required by Borrowers to permit Borrowers and Mexico to receive directly in connection with the Permitted Sale Leaseback Transaction the Retained Net Cash Proceeds, provided however, if the Toluca Property is not sold on or before March 15, 2016, or if the Net Cash Proceeds transferred to the Lender’s Cash Collateral Account are less than $6,000,000, Borrowers shall promptly distribute any Net Cash Proceeds received from any disposition of assets to the Lender’s Cash Collateral Account until the amount deposited therein is equal to $6,000,000. Lender hereby agrees and waives any claim to the contrary, that the requirements of subsection (d) of the definition of “Permitted Sale-Leaseback Milestones” in Section 1(a) of the Side Letter have been satisfied and/or waived.

 

(c)     Howard Street Prepayment. Lender hereby agrees, and waives any claim to the contrary, that the requirements of Section 1.8(i) have been satisfied and/or waived.

 

Section Three: Conditions Precedent to Amendment. The satisfaction (or waiver in writing by Agent) of each of the following shall constitute conditions precedent to the effectiveness of the Amendment (such date being the “First Amendment Effective Date”):

 

(a)     The First Amendment Effective Date shall occur prior to February 26, 2016;

 

(b)     Agent shall have received (i) this Amendment, duly executed by the parties hereto, (ii) the first amendment to the ABL Loan Agreement in respect of the ABL Documents, duly executed by the parties thereto, and (iii) the reaffirmation and consent of each Guarantor attached hereto as Exhibit B, duly executed by the parties hereto;

 

(c)     Lender shall have received that certain Second Amended and Restated Fee Letter, dated as of the date hereof (the “Fee Letter”), in form and substance satisfactory to Agent, duly executed and delivered by the parties thereto and such Fee Letter shall be in full force and effect;

 

(d)     No Default or Event of Default shall have occurred or be continuing on the date hereof nor shall either result from the consummation of the transactions contemplated herein;

 

(e)     Borrower shall have paid, or made arrangements for the payment simultaneously herewith to Lender of all reasonable and documented out-of-pocket third party expenses (including legal fees and other disbursements and expenses of Paul Hastings LLP and CREEL, GARCÍA-CUÉLLAR, AIZA Y ENRÍQUEZ) incurred by Lender (i) prior to the date hereof and (ii) in connection with all this Amendment; 

 

(f)     After giving effect to this Amendment, the representations and warranties contained herein, in the Loan Agreement, and in the other Loan Documents, in each case shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on and as of such date (except to the extent that such representation and warranties related solely to an earlier date, in which case such representations and warranties shall continue to be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date); and

 

 

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(g)     Lender shall have received (i) evidence satisfactory to Lender that Borrower has received cash in an amount not less than $1,000,000 from Gill Family Capital Management, Inc. in the form of the proceeds of a subordinated loan constituting Subordinated Debt, (ii) copies of the executed Subordinated Debt Documents evidencing such Subordinated Debt, and (iii) a Second Amended and Restated Subordination Agreement between Lender and Gill Family Capital Management, Inc. in respect of the increased amount of Subordinated Debt.

 

Section Four:    Representations and Warranties. Each Borrower represents and warrants to Lender as follows: 

 

(a)     Each Borrower has the corporate, limited liability or limited partnership power, authority and legal right to execute, deliver and perform this Amendment and the other instruments, agreements, documents and transactions contemplated hereby to which it is a party, and has taken all actions necessary to authorize the execution, delivery and performance of this Amendment and the other instruments, agreements, and documents to which it is a party and the transactions contemplated hereby and thereby;

 

(b)     No consent of any Governmental Authority or any other Person is required in connection with the execution, delivery and performance by any Borrower, or the validity or enforceability against any Borrower, of this Amendment and the other instruments, agreements, documents and transactions contemplated hereby to which it is a party;

 

(c)     This Amendment has been duly executed and delivered on behalf of each Borrower, by its duly authorized officer, and constitutes the legal, valid and binding obligation of each Borrower, enforceable in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the rights of creditors generally or equitable remedies (whether arising in a proceeding at law or in equity);

 

(d)     No Default or Event of Default has occurred and is continuing on the date hereof; 

 

(e)     No amendments or modifications to the terms of the sale of the Toluca Property have been made that (i) are not in writing between the parties to such documents, and (ii) have not been subject of written documentation, copies of which have been delivered to Lender;

 

(f)     All of the representations and warranties contained in the Loan Agreement continue to be true and correct in all material respects as of the date hereof, as if repeated as of the date hereof (other than any representation or warranty that specifically relates to an earlier date in which case such representation or warranty shall be true and correct as of such date); and

 

(g)     The execution and delivery of this Amendment, the consummation of the transactions herein contemplated, and compliance with the provisions hereof (i) will not contravene the terms of any Borrower’s by-laws or certificate of incorporation/operating agreement or certificate of formation or limited partnership agreement, as applicable, or other applicable documents relating to any Borrower’s formation or to the conduct of any Borrower’s business or of any material agreement or undertaking to which any Borrower is a party or by which any Borrower is bound, (ii) will not conflict with or violate any law or regulation, or any judgment, order or decree of any Governmental Authority, (iii) will not require the consent of any Governmental Authority or any other Person and (iv) will not conflict with, nor result in any breach in any of the provisions of or constitute a default under or result in the creation of any Lien except Permitted Liens upon any asset of any Borrower under the provisions of any agreement, charter document, instrument, by-law, operating agreement or other instrument to which any Borrower is a party or by which it or its property is a party or by which it may be bound.

 

 

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Section Five.  General Provisions.

 

(a)     Release. Effective on the date hereof, each Borrower and each Guarantor, for itself and on behalf of its successors, assigns, and officers, directors, employees, agents and attorneys, and any Person acting for or on behalf of, or claiming through it, hereby waives, releases, remises and forever discharges Agent and each Lender, each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom any member of the Lenders would be liable if such persons or entities were found to be liable to such Borrower or such Guarantor (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which such Borrower or such Guarantor ever had from the beginning of the world, now has, or might hereafter have against any such Releasee which relates, directly or indirectly to the Loan Agreement, any other Loan Document, or to any acts or omissions of any such Releasee with respect to the Loan Agreement or any other Loan Document, or to the lender-borrower relationship evidenced by the Loan Documents, except for the duties and obligations set forth in this Amendment. As to each and every Claim released hereunder, each Borrower and each Guarantor hereby represents that it has received the advice of legal counsel with regard to the releases contained herein, and having been so advised, specifically waives the benefit of the provisions of Section 1542 of the Civil Code of California which provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

As to each and every Claim released hereunder, each Borrower and each Guarantor also waives the benefit of each other similar provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Borrower and each Guarantor acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts. Each Borrower and each Guarantor understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

 

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(b)     Each Borrower and each Guarantor, for itself and on behalf of its successors, assigns, and officers, directors, employees, agents and attorneys, and any Person acting for or on behalf of, or claiming through it, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Person pursuant to the above release. Each Borrower and each Guarantor further agrees that it shall not dispute the validity or enforceability of the Loan Agreement or any of the other Loan Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Agent’s Lien on any item of Collateral under the Loan Agreement or the other Loan Documents. If any Borrower, any Guarantor, or any of their respective successors, assigns, or officers, directors, employees, agents or attorneys, or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, such Person, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

(c)     CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION. THIS AMENDMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE PROVISION SET FORTH IN SECTION 10.15 OF THE LOAN AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

 

(d)     Amendments. This Amendment cannot be altered, amended, changed or modified in any respect except in accordance with Section 10.5 of the Loan Agreement.

 

(e)     Counterpart Execution. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

 

(f)     Effect on Loan Documents. The Loan Agreement, as amended hereby, and each of the other Loan Documents shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a modification or waiver of any right, power, or remedy of Agent or any Lender under the Loan Agreement or any other Loan Document. Except for the amendments to the Loan Agreement expressly set forth herein, the Loan Agreement and the other Loan Documents shall remain unchanged and in full force and effect. To the extent that any terms or provisions of this Amendment conflict with those of the Loan Agreement or the other Loan Documents, the terms and provisions of this Amendment shall control.

 

 

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(g)     Upon and after the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Loan Agreement, and each reference in the other Loan Documents to “the Loan Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as modified and amended hereby.

 

(h)     To the extent that any of the terms and conditions in any of the Loan Documents shall contradict or be in conflict with any of the terms or conditions of the Loan Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Loan Agreement as modified [or amended] hereby.

 

(i)     This Amendment is a Loan Document.

 

(j)     Loan Agreement and the other Loan Documents constitute the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede any and all prior or contemporaneous amendments or understandings with respect to the subject matter hereof, whether express or implied, oral or written.

 

(k)     Integration. This Amendment, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.

 

(l)     Reaffirmation of Obligations. Each Borrower hereby (a) acknowledges and reaffirms its obligations owing to Agent and Lender, and (b) agrees that each of the Loan Documents to which it is a party is and shall remain in full force and effect. Each Borrower hereby (i) further ratifies and reaffirms the validity and enforceability of all of the Liens and security interests heretofore granted, pursuant to and in connection with the Loan Agreement or any other Loan Document to Agent, on behalf and for the benefit of Lender as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and (ii) acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof (including, without limitation, from after giving effect to this Amendment).

 

(m)     Ratification. Each Borrower hereby restates, ratifies and reaffirms each and every term and condition set forth in the Loan Agreement and the Loan Documents effective as of the date hereof and as modified hereby.

 

  

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

 

	
 
	
Agent:
	
 

	 	 	 
	 	GREAT ROCK CAPITAL PARTNERS MANAGEMENT, LLC,
	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
  /s/ Stuart Armstrong
	
 

	
 
	
 
	
Stuart Armstrong
	
 

	
 
	
 
	
Authorized Signatory
	
 

	
 
	
 

 
	
 

	 	Lender:	 
	 	 	 
	 	GREAT ROCK CAPITAL PARTNERS MANAGEMENT, LLC,
	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
  /s/ Stuart Armstrong
	
 

	
 
	
 
	
Stuart Armstrong
	
 

	
 
	
 
	
Authorized Signatory
	
 

 

 

 

 

 

 

 

	
 
	
SYPRIS SOLUTIONS, INC.
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill 
	
 

	
 
	
 
	
Name: Jeffrey T. Gill
Its: President & CEO
	
 

	
 
	
 
	
 
	
 

 

 

 

	
 
	
SYPRIS DATA SYSTEMS, INC.
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill  
	
 

	
 
	
 
	
Name: Jeffrey T. Gill 
	
 

	
 
	
 
	
Its: Chairman of the Board
	
 

 

 

	
 
	
 SYPRIS ELECTRONICS, LLC
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill  
	
 

	
 
	
 
	
Name: Jeffrey T. Gill 
	
 

	
 
	
 
	
Its: Chairman of the Board
	
 

 

 

	
 
	
 SYPRIS TECHNOLOGIES, INC.
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill  
	
 

	
 
	
 
	
Name: Jeffrey T. Gill 
	
 

	
 

 
	
 
	
Its: Chairman of the Board & President
	
 

 

	
 
	
SYPRIS TECHNOLOGIES NORTHERN, INC.
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill  
	
 

	 	 	Name: Jeffrey T. Gill 	 
	
 
	
 
	
Its: Chairman of the Board & President
	
 

 

 

 

 

 

	
 
	
SYPRIS TECHNOLOGIES SOUTHERN, INC.
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill  
	
 

	 	 	Name: Jeffrey T. Gill 	 
	
 
	
 
	
Its: Chairman of the Board & President
	
 

 

 

	
 
	
SYPRIS TECHNOLOGIES INTERNATIONAL, INC.
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill  
	
 

	
 
	
 
	
Name: Jeffrey T. Gill 
	
 

	
 
	
 
	
Its: Chairman of the Board & President
	
 

 

 

 

	
 
	
 SYPRIS TECHNOLOGIES KENTON, INC
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill  
	
 

	
 
	
 
	
Name: Jeffrey T. Gill 
	
 

	
 
	
 
	
Its: Chairman of the Board & President
	
 

 

 

 

	
 
	
SYPRIS TECHNOLOGIES MARION, LLC
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill  
	
 

	
 
	
 
	
Name: Jeffrey T. Gill 
	
 

	
 
	
 
	
Its: Chairman of the Board & President
	
 

 

 

	
 
	
SYPRIS TECHNOLOGIES MEXICAN HOLDINGS, LLC
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill  
	
 

	
 
	
 
	
Name: Jeffrey T. Gill 
	
 

	
 
	
 
	
Its: Chairman of the Board & Presidentex10-3.htm

Exhibit 10.3

 

THIS INSTRUMENT, AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY, ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN THIRD AMENDED AND RESTATED SUBORDINATION AGREEMENT DATED FEBRUARY 25, 2016 BETWEEN SIENA LENDING GROUP LLC, AS LENDER, AND GILL FAMILY CAPITAL MANAGEMENT, INC., AND CONSENTED TO BY THE BORROWERS DEFINED THEREIN.

 

THIS INSTRUMENT, AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY, ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN AMENDED AND RESTATED SUBORDINATION AGREEMENT DATED FEBRUARY 25, 2016 BETWEEN GREAT ROCK CAPITAL PARTNERS MANAGEMENT, LLC, AS AGENT, AND GILL FAMILY CAPITAL MANAGEMENT, INC., AND CONSENTED TO BY THE BORROWERS DEFINED THEREIN.

 

AMENDED AND RESTATED PROMISSORY NOTE

 

This Amended and Restated Promissory Note represents an amendment and restatement of, and not a novation of, that certain Amended and Restated Promissory Note made by Makers in favor of the Lender dated effective October 30, 2015, as heretofore amended, restated, modified and supplemented from time to time, in the maximum principal amount of $5,500,000.00.

 

 

$6,500,000.00     

 

Louisville, Kentucky

February 25, 2016

 

FOR VALUE RECEIVED, each of the undersigned, Sypris Solutions, Inc., a Delaware corporation (“Solutions”), Sypris Technologies, Inc., a Delaware corporation (“Technologies”), Sypris Electronics, LLC, a Delaware limited liability company (“Electronics”), SYPRIS DATA SYSTEMS, INC., a Delaware corporation (“Data Systems”), SYPRIS TECHNOLOGIES MARION, LLC, a Delaware limited liability company, SYPRIS TECHNOLOGIES KENTON, INC., a Delaware corporation, SYPRIS TECHNOLOGIES MEXICAN HOLDINGS, LLC, a Delaware limited liability company, SYPRIS TECHNOLOGIES NORTHERN, INC., a Delaware corporation, SYPRIS TECHNOLOGIES SOUTHERN, INC., a Delaware corporation, and SYPRIS TECHNOLOGIES INTERNATIONAL, INC., a Delaware corporation (each a “Maker” and collectively, the “Makers”), hereby jointly and severally promise and agree to pay to the order of GILL FAMILY CAPITAL MANAGEMENT, INC., a Delaware corporation with principal office and place of business at 101 Bullitt Lane, Suite 450, Louisville, Kentucky 40222 (the “Lender”), the principal sum of up to SIX MILLION FIVE HUNDRED THOUSAND DOLLARS ($6,500,000.00) (the “Loan”), together with interest thereon as provided below. The terms and provisions of this Amended and Restated Promissory Note (this “Note”) are as follows:

 

1.     Calculation of Interest. From the date hereof to and until January 30, 2019, which date shall be the maturity date of this Note (the “Maturity Date”), the outstanding principal balance of this Note shall bear interest at the fixed rate per annum equal to eight percent (8.00%).

 

2.     Payment of Principal and Interest. The entire unpaid principal balance of and all accrued and unpaid interest on this Note, together with all other amounts due and owing under this Note, shall be due and payable in full on the Maturity Date. 

 

3.     Interest Calculated on 30-Day Month. All accrued interest on this Note shall be calculated on the basis of the actual number of days elapsed over twelve (12) assumed months consisting of thirty (30) days each.

 

 

 

 

 

4.     Default Rate. Commencing five (5) days after written notice from the Lender (by facsimile transmission or otherwise) to the Makers to the effect that any installment of principal of and/or accrued interest on this Note is overdue (provided such notice shall be given no earlier than five (5) days after the due date of any such installment), such overdue installment of principal and/or accrued interest, provided it remains unpaid, shall commence to bear interest at the ten percent (10%) per annum (the “Default Rate”), and such overdue installment of principal and/or accrued interest together with all interest accrued thereon at the rate set forth herein shall continue to be immediately due and payable in full to the Lender. In the event the Lender accelerates the maturity date of this Note due to the occurrence of any Event of Default hereunder, the entire unpaid principal balance of this Note together with all accrued and unpaid interest thereon shall, beginning five (5) days after notice of acceleration of the maturity date of this Note has been given to the Makers, commence to bear interest at the Default Rate, and all such unpaid principal together with all interest accrued and unpaid thereon, including, without limitation, all interest accrued and accruing thereon as provided in this sentence, shall continue to be immediately due and payable in full to the Lender.

 

5.     Place of Payment. All payments of principal and interest on this Note shall be made to the Lender in legal tender of the United States of America at its offices located at 101 Bullitt Lane, Suite 450, Louisville, Kentucky 40222, or to such other person or such other place as may be designated in writing by the Lender.

 

6.     Security Agreements; Mortgages; Security for Note; Subordination Agreement. This Note is secured by, among other instruments, each of the following: [i] that certain Amended and Restated Security Agreement dated as of February 25, 2016 by and between the Makers and the Lender (as amended from time to time, the “General Security Agreement”), [ii] that certain Amended and Restated Patent Security Agreement dated as of February 25, 2016 by and among Technologies, Electronics and the Lender (as amended from time to time, the “Patent Security Agreement”), [iii] that certain Amended and Restated Trademark Security Agreement dated as of February 25, 2016 by and between Electronics and the Lender (as amended from time to time, the “Amended and Restated Electronics Trademark Security Agreement”), [iv] that certain Amended and Restated Trademark Security Agreement dated as of February 25, 2016 by and among Solutions, Technologies and the Lender (as amended from time to time, the “Amended and Restated Trademark Security Agreement”) (the General Security Agreement, the Patent Security Agreement, the Amended and Restated Electronics Trademark Security Agreement and the Amended and Restated Trademark Security Agreement are collectively referred to herein as the “Security Agreements”), and [v] that certain Amended and Restated Mortgage and Security Agreement with Assignment of Rents and Fixture Financing Statement dated as of February 25, 2016made by Technologies for the benefit of Lender with respect to the Property described therein (as amended from time to time, collectively, the “Mortgage”) (the Security Agreements, Mortgage, and this Note may be referred to individually as a “Loan Instrument” and collectively as the “Loan Instruments”). This Note is subject to the respective terms and provisions of (i) that certain Third Amended and Restated Subordination Agreement of even date herewith by and between the Lender and Siena Lending Group LLC (“Siena”), as consented to by the Makers (the “Siena Subordination Agreement”), and (ii) that certain Amended and Restated Subordination Agreement of even date herewith by and between the Lender and Great Rock Capital Partners Management, LLC, as Agent (“Great Rock”), as consented to by the Makers (the “Great Rock Subordination Agreement”) (Siena and Great Rock are each referred to herein individually as a “Senior Lender” and collectively as the “Senior Lenders”) (the Siena Subordination Agreement and the Great Rock Subordination Agreement are each referred to herein individually as a “Subordination Agreement” and collectively as the “Subordination Agreements”). 

 

 

 

 

 

7.     Representations and Warranties. Each Maker hereby jointly and severally represents and warrants to the Lender, as follows, which representations and warranties shall survive the execution and delivery of this Note and the making of the disbursement of Loan proceeds hereunder:

 

7.1     Maker’s Existence. Each Maker is a duly organized or incorporated and validly existing corporation or limited liability company, as applicable, in good standing under the laws of the State of Delaware and has all requisite authority to own its property and to carry on its business as presently conducted. Each Maker is duly qualified to transact business and is validly existing and in good standing as a foreign entity in every foreign jurisdiction where the failure to so qualify would materially and adversely affect such Maker’s business or its properties. 

 

7.2     Authority of Maker. The obtaining of the Loan by each Maker from the Lender and the execution, delivery and performance by each Maker of this Note, the Security Agreements, the Mortgages and the other Loan Instruments to which it is a party are within the organizational powers of each Maker, have been duly authorized by all of the Directors or Members of such Maker, are not in contravention of the Certificate of Incorporation, Certificate of Formation, Bylaws or Operating Agreement of such Maker, as applicable, or the terms of any indenture, agreement or undertaking to which such Maker is a party or by which it or any of its property is bound, and do not contravene the provisions of, or constitute a default under, or result in the creation of any lien (except as expressly contemplated herein) upon the property of such Maker under any indenture, mortgage, contract or other agreement to which such Maker is a party or by which it or any of its properties is bound. Each Maker is duly qualified to do business as a foreign limited liability company in each state in which it is so required to be qualified.

 

7.3     Taxes. Each Maker has filed or caused to be filed all federal, state and local tax returns which, to the knowledge of its Members or Directors, are required to be filed, and each Maker has paid or caused to be paid all taxes as shown on such returns, on any assessment received by such Maker. Each Maker has established reserves which are believed to be adequate for the payment of additional taxes for years that have not been audited by the respective tax authorities.

 

7.4     Enforceability. This Note, the Security Agreements, the Mortgages and the other Loan Instruments to which any Maker is a party constitute valid and legally binding obligations of each such Maker, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency or similar laws affecting the rights of creditors generally and to general principles of equity, whether asserted in an action at law or in equity.

 

8.     Affirmative Covenants. Each Maker hereby jointly and severally agrees that until the Loan and other secured indebtedness has been paid in full to the Lender and this Note has been terminated, each Maker, shall perform and observe all of the following provisions:

 

8.1     Financial Statements. Each Maker shall furnish to the Lender all financial statements and other financial information in form and at the times required to be furnished to either Senior Lender under its respective Loan Agreement (as defined in either Subordination Agreement). 

 

8.2     Inspection. Each Maker covenants that it will permit the Lender and its employees and agents, at the Lender’s expense (unless an Event of Default or Unmatured Event of Default has occurred hereunder, in which event the same shall be at the expense of said Maker) to examine corporate books and financial records of said Maker, and to discuss the affairs, finances and accounts of the Maker at such reasonable times and as often as the Lender may reasonably request. 

 

 

 

 

 

8.3     Maker’s Existence. Each Maker shall preserve its existence as a limited liability company or corporation, as applicable, under the laws of the State of Delaware.

 

8.4     Further Assurances. Each Maker shall execute and deliver to the Lender all agreements, documents and instruments, shall pay all filing fees and taxes in connection therewith and shall take such further actions as the Lender may reasonably request or as may be necessary or appropriate to effectuate the intent of this Note and the other Loan Instruments.

 

8.5     Notice of Default. The Makers shall promptly notify the Lender in writing of the occurrence of any Event of Default, specifying in connection with such notification all actions proposed to be taken to remedy such circumstance.

 

8.6     Notice of Legal Proceedings. The Makers shall, promptly upon becoming aware of the existence thereof, notify the Lender in writing of the institution of any litigation, legal proceeding, or dispute with any person or tribunal, that might materially and adversely affect the condition, financial or otherwise, or the earnings, affairs, business prospects or properties of any Maker.

 

8.7     Maintenance of Qualification and Assets. Each Maker shall at all times maintain: (i) its qualification to transact business and good standing as a foreign entity in all jurisdictions where the failure to so qualify would materially and adversely affect the nature of its properties or the conduct of its businesses; and (ii) all franchises, licenses, rights and privileges necessary for the proper conduct of its businesses.

 

8.8     Payment of Taxes and Claims. Each Maker shall pay all taxes imposed upon it or upon any of its properties or with respect to its franchises, business, income or profits before any material penalty or interest accrues thereon. Each Maker shall also pay all material claims (including without limitation claims for labor, services, materials and supplies) for sums which have or shall become due and payable and which by law have or might become a vendors lien or a mechanics, laborers’, materialmen’s, statutory or other lien affecting any of its properties; provided, however, that the respective Maker shall not be required to pay any such taxes or claims if (i) the amount, applicability or validity thereof is being contested in good faith by appropriate legal proceedings promptly initiated and diligently conducted and (ii) each Maker shall have set aside on its books reserves (segregated to the extent required by generally accepted accounting principles) adequate with respect thereto.

 

 

 

 

 

9.     Acceleration; Offset; Special Rights Relating to Collateral. Each of the following events shall constitute an “Event of Default” under this Note: (a) the Makers shall fail to pay the principal of and/or any accrued interest on this Note when due and such failure shall continue for more than five (5) days after such due date; (b) a representation contained herein or in any of the Security Agreements, Mortgages or other Loan Instruments shall be untrue or any Maker shall violate any of the other terms or covenants contained in this Note or in any of the Security Agreements, Mortgages or other Loan Instruments and such failure shall continue for a period of thirty (30) days after receipt by such Maker of notice thereof from the Lender; (c) any Maker shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code or any other federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law, (ii) consent to the institution of, or fail to contravene in a timely and appropriate manner, in any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally, to pay its debts as they become due, or (vii) take any action for the purpose of effecting any of the foregoing; (d) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of said Maker or of a substantial part of the property or assets of said Maker under Title 11 of the United States Code or any other federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar, law or (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official of said Maker, or of a substantial part of the property or assets of said Maker; and any such proceeding or petition shall continue undismissed for sixty (60) consecutive days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for sixty (60) consecutive days; then, and in each such event (other than an event described in subsections (c) or (d) above); or (e) if there occurs any other “Event of Default” as defined in the Security Agreements, the Mortgages, any of the other Loan Instruments or in either Loan Agreement (as defined in either Subordination Agreement) or any of the other agreements or documents executed in connection with the Senior Debt (as defined in either Subordination Agreement) and the same continues past any applicable grace period. After the occurrence and continuation of any Event of Default, the Lender shall have full power and authority at any time or times to exercise, at its sole option, all or any one or more of the rights and remedies of a secured party under the Uniform Commercial Code of the Commonwealth of Kentucky (the “Kentucky UCC”), the Uniform Commercial Code of the State of Delaware (the “Delaware UCC”) and/or all other applicable laws, including without limitation, declare the entire unpaid principal balance of and all accrued and unpaid interest on this Note to be, whereupon the same shall be, immediately due and payable in full to the Lender (unless the Event of Default is of the type referred to in subsection (c) or (d) above, in which event the entire unpaid principal balance of and all accrued and unpaid interest on this Note shall automatically be due and payable in full to the Lender without notice or demand). If any Event of Default shall occur and be continuing, the Lender shall have the right then, or at any time thereafter, to set off against, and appropriate and apply toward the payment of the unpaid principal of and/or accrued and unpaid interest on this Note in such order as the Lender may select in its sole and absolute discretion, whether or not this Note shall then have matured or be due and payable and whether or not the Lender has declared this Note to be in default and immediately due and payable, any and all deposit balances and other sums and indebtedness and other property then held or owed by the Lender to or for the credit or account of the Makers, and in and on all of which the Makers hereby grant the Lender a first priority security interest in and lien on to secure the payment of this Note, all without prior notice to or demand upon the Makers or any other Person, all such prior notices and demands being hereby expressly waived by the Makers. Any requirement of the Kentucky UCC or the Delaware UCC for reasonable notice shall be met if such notice is mailed, postage pre-paid, to the Makers at least five (5) days prior to the time of the event given rise to the requirement of notice. Notice shall be mailed to the address of the Makers as shown on the records of the Lender maintained with respect to the Loan. The Lender shall have no responsibility for the collection or protection of the Collateral or any part thereof or to exercise (or give notice to the Makers of) any option, privilege or right with respect to the Collateral, all of which are waived by the Makers. The Lender, at its option, may transfer or register all or any part of the Collateral into its or its nominee’s name without any indication of security interest, without notice in either before or after the maturity of this Note. The Lender may transfer this Note, and deliver the Collateral to the transferee, and the transferee shall become vested with all powers and rights given to the Lender with respect to the Collateral.

 

10.     Rights Under Security Instruments; Cumulative Rights. Upon the occurrence of any Event of Default, the Lender shall have all of the rights and remedies under this Note, the Mortgages, the Security Agreements, the other Loan Instruments and at law or in equity. All of the rights and remedies of the Lender upon the occurrence of an Event of Default hereunder shall be cumulative to the greatest extent permitted by law.

 

 

 

 

 

11.     Indemnity. The Makers shall jointly and severally indemnify and hold harmless the Lender, its successors, assigns, officers, shareholders, agents and employees, from and against any and all claims, actions, suits, proceedings, costs, expenses, damages, fines, penalties and liabilities, including, without limitation, reasonable attorneys’ fees and costs, arising out of, connected with or resulting from (a) this Note or any of the other Loan Instruments, (b) the Lender’s preservation or attempted preservation of any of the collateral taken pursuant to any of the Loan Instruments, and/or (c) any failure of the security interests and liens granted to the Lender pursuant to the Loan Instruments to be or to remain perfected or to have the priority as contemplated herein and in the Loan Instrument; provided, however, the Makers shall not have any obligation to indemnify the Lender for any such claims, actions, suits, proceedings, costs, expenses, damages, fines, penalties and/or liabilities to the extent the same have been caused by or have arisen solely and completely from any gross negligence or willful misconduct committed by the Lender. At the Lender’s request, the Makers shall, at their own cost and expense, defend or cause to be defended any and all such actions or suits that may be brought against the Lender and, in any event, shall satisfy, pay and discharge any and all judgments, awards, penalties, costs and fines that may be recovered against the Lender in any such action, plus all attorneys’ fees and costs related thereto to the extent permitted by applicable law; provided, however, that the Lender shall give the Makers (to the extent the Lender seeks indemnification from the Makers under this section) prompt written notice of any such claim, demand or suit after the Lender has received written notice thereof, and the Lender shall not settle any such claim, demand or suit, if the Lender seeks indemnification therefor from the Makers, without first giving notice to the Makers of the Lender’s desire to settle and obtaining the consent of the Makers to the same, which consent the Makers hereby agree not to unreasonably withhold. All obligations of the Makers under this section shall survive the payment of the Note.

 

12     Invalidity. If any part of this Note shall be adjudged invalid or unenforceable, whether in general or in any particular circumstance, then such partial invalidity or enforcement shall not cause the remainder of this Note to be or to become invalid or unenforceable, and if a provision hereof is held invalid or unenforceable, and if a provision hereof is held invalid or unenforceable in one or more of its applications, the Lender and the Makers hereby agree that said provision shall remain in effect in all valid applications that are severable from the invalid or unenforceable application or applications.

 

13.     Assignment. This Note may not be assigned by any or all of the Makers. This Note and the other Loan Instruments may be assigned by the Lender. All rights of the Lender hereunder shall inure to the benefit of its successors and assigns, and all obligations, covenants and agreements of the Makers shall bind its successors and assigns, if any.

 

14.     Entire Agreement. This Note and the other Loan Instruments constitute the entire agreement between the Lender and the Makers with respect to the subject matter hereof.

 

15.     Costs and Expenses. The Makers jointly and severally agree to pay: (a) the reasonable fees of Lender’s counsel, including all out-of-pocket expenses incurred by such counsel, including costs incurred on behalf of the Lender in the negotiation, preparation, printing, documentation, review and execution of this Note and other Loan Instruments, and (b) all other charges, out-of-pocket costs and expenses incurred by the Lender or Lender’s counsel including, without limitation, including all documentary stamp or other tax liabilities, recording fees and costs of lien searches, certified documents and flood zone verifications. All obligations of the Makers under this section shall survive the termination or cancellation of this Note for any reason whatsoever. 

 

16.     No Third Party Beneficiaries. All conditions of the obligations of the Lender to disburse the proceeds of the Loan hereunder are imposed solely and exclusively for the benefit of the Lender and its successors and assigns and the Makers, and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that the Lender will refuse to disburse proceeds of the Loan in the absence of strict compliance with any or all of such conditions, and no other Person shall, under any circumstances, be deemed to be beneficiary of such conditions, any or all of which may be freely waived in whole or in part by the Lender at any time in its sole and absolute discretion.

 

 

 

 

 

17.      Amendments. No amendment, modification, or supplement to this Note or the other Loan Instruments, or to any other document or instrument executed or issued by any of the parties hereto in connection with the transactions contemplated herein, shall be binding unless executed in writing by all parties hereto or thereto; and this provisions of this Note and the other Loan Instruments shall not be subject to waiver by any party and shall be strictly enforced.

 

18.      Role of the Lender. Notwithstanding any of the terms or conditions hereof or of the other Loan Instruments to the contrary, the Lender shall not have, and by its execution and acceptance of this Note hereby expressly disclaims, any obligation or responsibility for the management, conduct or operation of the business and affairs of any of the Makers. Any term or condition hereof, or of any of the other Loan Instruments, permitting the Lender to take or refrain from taking any action with respect to the Makers or the collateral shall be deemed solely to permit the Lender to audit and review the management, operation and conduct of the business and affairs of the Makers and to maintain and preserve the security given by the Makers to the Lender, for the secured obligations, and may not be relied upon by any other Person. Further, the Lender shall not have, has not assumed, and by its execution and acceptance of this Note and the other Loan Instruments hereby expressly disclaims, any liability or responsibility for the payment or performance of any indebtedness or obligation of the Makers, and no term or condition hereof, or of any of the other Loan Instruments, shall be construed otherwise.

 

19.     No Implied Waivers; Time is of the Essence. The failure of the Lender to exercise any of its rights, powers and/or remedies shall not constitute a waiver of the right to exercise the same at that or any other time. All rights and remedies of the Lender for an Event of Default hereunder and/or under the other Loan Instruments, shall be cumulative to the greatest extent permitted by law. Time shall be of the essence in (i) the payment of all installments of principal of and accrued interest on this Note, and (ii) the performance of the Makers’ other obligations hereunder and under the Security Agreements, Mortgages and the other Loan Instruments.

 

20.     Attorneys’ Fees. If there is any Event of Default under this Note, the Security Agreements, the Mortgages and/or the other Loan Instruments which is not timely cured, and this Note is placed in the hands of any attorney for collection, or is collected through any court, including any bankruptcy court, the Makers promise and agree to pay to the Lender its reasonable attorneys’ fees, court costs and other expenses incurred in collecting or attempting to collect or securing or attempting to secure this Note or enforcing the Lender’s rights hereunder and under the Security Agreements, Mortgages and the other Loan Instruments.

 

21.     Prepayment. This Note may be prepaid at any time, in whole or in part, without penalty or premium.

 

22.     Governing Law; Jurisdiction. This Note and all of the rights and remedies of the holder hereof shall be governed by, and construed in accordance with, the laws of the Commonwealth of Kentucky without regard to conflicts of law principles. THE MAKERS SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF KENTUCKY AND OF ANY KENTUCKY STATE COURT SETTING IN JEFFERSON COUNTY, KENTUCKY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE, THE SECURITY AGREEMENTS, MORTGAGES OR ANY OF THE OTHER LOAN INSTRUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

 

 

 

 

23.     Waivers. The Makers hereby waive presentment, demand, notice of dishonor, protest, notice of protest and nonpayment, and further waives all exemptions to which it may now or hereafter be entitled to under the laws of this or any other state or of the United States. The Lender shall have the right to grant the Makers any extension of time for payment of this Note or any other indulgence or forbearance whatsoever, and may release any security for the payment of this Note if any, as applicable, in every instance without the consent of the Makers and without in any way affecting the liability of the Makers hereunder and without waiving any rights the Lender may have hereunder or by virtue of the laws of the Commonwealth of Kentucky or any other state or of the United States.

 

24.     Legal Rate of Interest. Nothing herein contained shall be construed or so operate as to require payment of interest at a rate greater than the highest permitted contract rate under applicable law, or to make any payment or to do any act contrary to applicable law. To this end, if during the course of any litigation involving the enforceability of the obligations represented by this Note, a court having jurisdiction of the subject matter or of the parties to said litigation shall determine that either the interest rate as set forth herein, or the effect of said rate in relation to the particular circumstances of default resulting in said litigation, are separately or collectively usurious, then the interest rate set forth herein shall be reduced, or the operation and effect thereof ameliorated, to achieve the highest interest rate or charge which shall not be usurious. As an example of such an amelioration, in the event the indebtedness represented by this Note is declared due by the Lender prior to maturity, and the total amount of interest paid causes interest to exceed the highest rate permitted by law, such interest rate shall be recalculated at the highest rate which shall not be usurious and any excess paid over such recalculated interest rate shall be credited to the unpaid principal of this Note.

 

25.     Captions. The section headings of this Note are inserted herein solely for convenience of reference and shall not affect the construction or interpretation of the provisions hereof.

 

26.     WAIVER OF JURY TRIAL. THE MAKERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY (AFTER ACTUAL CONSULTATION OR THE OPPORTUNITY TO HAVE CONSULTATION WITH LEGAL COUNSEL) WAIVE THE RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS NOTE, THE SECURITY AGREEMENTS, MORTGAGES OR ANY OF THE OTHER LOAN INSTRUMENTS, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THE NOTE, THE LOAN OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION THEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER IN MAKING THE LOAN TO THE MAKERS. THE PROVISIONS OF THIS SECTION MAY ONLY BE MODIFIED BY A WRITTEN INSTRUMENT EXECUTED BY THE MAKERS AND THE LENDER.

 

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the Makers agree to each of the terms set forth above and has executed this Note as of the 25th day of February, 2016.

 

	
 
	
Sypris Solutions, Inc., 
	
 

	 	a Delaware corporation	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	/s/ Jeffrey T. Gill                                             	
 

	 	 	 	 
	 	Title:	President &CEO                                             	 
	
 
	 	
 

 

	
 
	
Sypris Technologies, Inc., 
	
 

	 	a Delaware corporation	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill                                             
	
 

	
 
	
 
	
 
	
 

	
 
	
 Title:
	
Chairman of the Board & President             
	
 

 

	
 
	
 
	
 

	
 
	Sypris Electronics, LLC,  	
 

	 	a Delaware limited liability company	 
	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill                                             
	
 

	
 
	
 
	
 
	
 

	
 
	
Title:
	
Chairman of the Board                                  
	
 

 

 

	
 
	
SYPRIS DATA SYSTEMS, INC., 
	
 

	 	a Delaware corporation	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	/s/ Jeffrey T. Gill                                             	
 

	
 
	
 
	
 
	
 

	
 
	
Title:
	
Chairman of the Board                                  
	
 

 

 

	
 
	
SYPRIS TECHNOLOGIES MARION, LLC,
	
 

	 	a Delaware limited liability company	 
	
 
	 	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	/s/ Jeffrey T. Gill                                             	
 

	
 
	
 
	
 
	
 

	
 
	
Title: 
	
Chairman of the Board & President             
	
 

 

 

 

 

 

 

 

 

	
 
	
SYPRIS TECHNOLOGIES KENTON, INC., 
	
 

	 	a Delaware corporation	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill                                             
	
 

	
 
	
 
	
 
	
 

	
 
	
 Title:
	
Chairman of the Board & President             
	
 

	
 
	
 

 

SYPRIS TECHNOLOGIES MEXICAN
	
 

	 	HOLDINGS, LLC, a Delaware limited liability company	 
	
 
	 	
 
	
 

	
 
	 	
 
	
 

	
 
	
By: 
	/s/ Jeffrey T. Gill                                             	
 

	
 
	
 
	
 
	
 

	
 
	
Title:
	
Chairman of the Board & President             
	
 

 

  

	
 
	
SYPRIS TECHNOLOGIES NORTHERN, INC.,
	
 

	 	a Delaware corporation	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	/s/ Jeffrey T. Gill                                             	
 

	
 
	
 
	
 
	
 

	
 
	
Title:
	Chairman of the Board & President             	
 

 

 

	
 
	
SYPRIS TECHNOLOGIES SOUTHERN, INC.,
	
 

	 	a Delaware corporation	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	/s/ Jeffrey T. Gill                                             	
 

	
 
	
 
	
 
	
 

	
 
	
Title:
	Chairman of the Board & President             	
 

 

 

	
 
	
SYPRIS TECHNOLOGIES INTERNATIONAL,
	
 

	 	INC., a Delaware corporation	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Jeffrey T. Gill                                             
	
 

	
 
	
 
	
 
	
 

	
 
	
Title:
	
Chairman of the Board & President             
	
 

	 	 	 	 
	 	 	(the “Makers”)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00258-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00258-of-00352.parquet"}]]