EXHIBIT 10.4.4
THIRD AMENDMENT TO AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
AND
FIRST AMENDMENT TO STOCK PURCHASE WARRANT
This Third Amendment, dated as of March 28, 1997, but effective December 1,
1996, to Amended and Restated Credit and Security Agreement ("Amendment") by and
between GROUP TECHNOLOGIES CORPORATION, a Florida corporation (the "Borrower"),
and FIRST UNION COMMERCIAL CORPORATION, a North Carolina corporation (the
"Lender"), amends the Amended and Restated Credit and Security Agreement, dated
March 29, 1996, by and between the Borrower and the Lender, as amended on May
13, 1996 and September 5, 1996 (as so amended, and as amended, modified,
extended, restated, enlarged or supplemented from time to time, the
"Agreement"). This Amendment also amends the Stock Purchase Warrant (No. 1)
dated March 29, 1996 between the Borrower and the Lender (the "Warrant").
RECITAL
The Borrower has requested that the Lender waive the operation of certain
covenants of the Agreement and amend certain provisions of the Agreement and
amend certain provisions of the Warrant, and the Lender is willing to grant such
waivers and make such amendments, all upon the terms and subject to the
conditions set forth herein.
AGREEMENT
In consideration of the foregoing and of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. Capitalized Terms. Capitalized terms used in this Amendment and not
otherwise defined herein, shall have the meanings ascribed to them in the
Agreement (including the defined terms added in this Amendment).
2. New Definition. Three new definitions are added to Section 1 of the
Agreement, in alphabetical order, to read as follows:
"Convertible Preferred Stock" shall mean the Convertible Preferred
Stock issued to GFP on March 28, 1997, for a subscription price of
$2,500,000, and containing the terms and preferences set forth on Annex A
attached to the Third Amendment.
"EBITDAR" shall mean, for any period, the aggregate of net income (or
loss) of the Borrower for such period, determined in accordance with GAAP,
plus (a) the sum of the following amounts for such period in accordance
with GAAP to the extent included in the determination of such net income
(loss): (i) interest expense on Indebtedness (including the Obligations),
(ii) income tax expense (to the extent it is a positive number), and (iii)
amortization and depreciation; less (b) the sum of the following amounts in
accordance with GAAP to the extent included in the determination of such
net income (loss): (i) the net income (loss) of any other Person that is
accounted for by the equity method of accounting except to the extent of
the amount of dividends or distributions paid by such Person to the
Borrower, (ii) the net income (loss) of any other Person acquired by the
Borrower in a transaction accounted for as a pooling of interests for any
period prior to the date of such acquisition, and (iii) all royalty income
received or accrued by the Borrower.
"Third Amendment" shall mean the Third Amendment to Amended and
Restated Credit and Security Agreement and First Amendment to Warrant
Agreement, dated as of March 28, 1997 but effective as of December 1, 1996,
among the Borrower, the Lender and the Guarantors
3. Reduction in Revolving Line of Credit. (a) Section 2.1(a) of the
Agreement is hereby amended in its entirety to read as follows:
2.1(a) Revolving Line of Credit. Subject to all of the terms and
conditions set forth in this Agreement and the other Loan Documents, the
Lender shall make a revolving line of credit available for the Borrower's
use from time to time on and after the Closing Date and until the
Commitment Termination Date. Unless a Default or Event of Default exists
or would result from the making of a Loan or the issuance of a Letter of
Credit, pursuant to the Revolving Line of Credit, the Lender, upon the
Borrower's request therefor, will make Loans and, subject to its sole and
absolute discretion in each instance, cause the issuance of Letters of
Credit for the account of the Borrower or any Subsidiary, on a revolving
credit basis, in an aggregate amount at any one time outstanding not to
exceed Thirteen Million Five Hundred Thousand Dollars ($13,500,000) minus
all GT Mexico Loans then outstanding. If, at any time or times, the
aggregate principal amount of all revolving credit Loans, Letter of Credit
Obligations and GT Mexico Loans exceeds the Borrowing Base in effect at
such time, whether by reason of a reduction in the Borrowing Base or
otherwise, Borrower will immediately repay the amount of such Overadvance;
provided, however, that if and to the extent that the Overadvance results
from a reduction of the Borrowing Base caused solely by a change in the
eligibility criteria with respect to Accounts and Inventory or Lender's
establishing a reserve against the Borrowing Base, the Borrower shall have
a ten (10) day grace period during which to either reduce the Obligations
under the Revolving Line of Credit or increase the Collateral so as to
completely eliminate the Overadvance. The failure to make such payment
within one Business Day following the occurrence of the Overadvance, or
within such ten-day grace period, as the case may be, shall constitute an
Event of Default under this Agreement. Nothing herein shall require or
imply any obligation on the part of the Lender to make any Overadvance.
(b) Section 2.4 of the Agreement is hereby amended in its entirety to
read as follows:
2.4 Maximum Revolving Facility. Notwithstanding anything to the
contrary contained in this Agreement or any of the other Loan Documents,
(a) the aggregate amount of revolving credit Loans and Letter of Credit
Obligations shall not exceed at any time Thirteen Million Five Hundred
Thousand Dollars ($13,500,000) minus all GT Mexico Loans (which in no event
may exceed $6,000,000 under the GT Mexico Credit Agreement) from the Lender
to GT Mexico outstanding at such time, and (b) in no event shall the Lender
be required to make any revolving credit Loans if, after giving effect to
such Loans and all then outstanding Letters of Credit, Availability would
not be a positive amount. If, at any time, such Overadvances exist, the
Borrower shall either reduce the Revolving Line of Credit Obligations or
increase the amount of Collateral in the Borrowing Base so that such sum is
a positive amount; provided, however, that if and to the extent that such
excess results from a reduction of the Borrowing Base caused solely by a
change in the eligibility criteria with respect to Accounts and Inventory
or Lender's establishing a reserve against the Borrowing Base, the Borrower
shall have ten (10) days during which to either reduce the Revolving Line
of Credit Obligations or increase the Collateral. All of the foregoing
shall be calculated in accordance with a Borrowing Base Certificate. In
determining Availability, the Lender shall have the right from time to time
to establish and reestablish such reserves (in addition to those set forth
in Exhibit A) against the Borrowing Base as it deems appropriate in its
sole discretion.
4. Negative Covenants. (a) Financial Covenants. Sections 8.11 and 8.15
of the Agreement are deleted in their entirety, a new Section 8.11 (Minimum
EBITDAR) is added to the Agreement to read as set forth below, Sections 8.13 and
8.14 of the Agreement are amended in their entirety to read as set forth below,
and the remaining sections of Section 8 are renumbered accordingly:
8.11 Minimum EBITDAR. Permit EBITDAR for the fiscal quarter listed
below to be less than the amounts shown below for such quarter:
[CAPTION]
Period Amounts
------ -------
For Borrower on
a consolidated basis: 1996 4th quarter: None
1997 1st quarter: $(2,200,000)
1997 2nd quarter: $( 500,000)
1997 3rd quarter: $ 500,000
1997 4th quarter: $ 1,000,000
1998 1st quarter: $ 1,000,000
For Borrower on
an unconsolidated basis: 1996 4th quarter: None
1997 1st quarter: $(2,500,000)
1997 2nd quarter: $(1,200,000)
1997 3rd quarter: $(1,200,000)
1997 4th quarter: $(1,000,000)
1998 1st quarter: $(1,000,000)
8.13 Current Ratio. Permit the ratio of Current Assets to Current
Liabilities at any time to be less than eight tenths-to-one (0.8-to-1) at
any time.
8.14 Minimum Tangible Net Worth. Permit Tangible Net Worth plus
Subordinated Debt, on a consolidated basis, at any time to be less than the
amounts shown below for the applicable quarter listed below:
[CAPTION]
Period Amounts
------ -------
On December 31, 1996 $14,000,000
On the last day of each fiscal
quarter thereafter $16,500,000;
provided, however, that for purposes of this section, there shall be added
to Tangible Net Worth (i) all amounts deducted or amortized by reason of
the Warrants issued to the Lender, (ii) the restructuring fee paid to the
Lender in connection with the Third Amendment, (iii) all amounts
representing the Convertible Preferred Stock but only if, and to the
extent, such Stock is treated as debt in the Borrower's financial
statements, and (iv) all dividends and interest, if any, accrued on the
Convertible Preferred Stock.
(b) Transfer of Assets to Foreign Subsidiaries. Notwithstanding the
restrictions contained in Section 8.21 of the Agreement, the Borrower shall be
entitled to transfer the assets described on Schedule 1 attached to this
Amendment to GT Brazil and GT Mexico, as provided in such Schedule.
5. No Further Management Fees to GFP. Section 8.16 of the Agreement is
deleted from the Agreement, and the reference to Section 8.16 in Section 8.8 is
deleted from the Agreement.
6. Amendment of Stock Purchase Warrant . The vesting schedule set forth
on the first page of the Warrant shall be amended in its entirety to read as
follows:
[CAPTION]
Obligations Paid Maximum Number
Prior to of Stock Units
---------------- --------------
March 31, 1997 200,000
June 30, 1997 325,000
September 30, 1997 700,000
December 31, 1997 950,000
7. Conditions Precedent to Effectiveness of Amendment. The effectiveness
of the amendments of the covenants in Sections 4 and 5 of this Amendment is
conditioned upon the Borrower, on or before 3:00 p.m. Miami, Florida time on
March 28, 1997, (i) receiving not less than $2,500,000 in cash from GFP in
consideration for the issuance to GFP of the Convertible Preferred Stock, (ii)
using $500,000 of the proceeds of such issuance to prepay Term Loan I in the
inverse order of the maturity of Term Loan I, and (iii) paying to the Lender a
one-time restructuring fee (in addition to any other fees payable to the Lender
pursuant to the Agreement) of $100,000.
8. Reaffirmation and Modification of Guaranties and Pledges.
The form, terms and conditions of each of the following documents are
hereby ratified and reaffirmed in all respects:
(i) Security and Pledge (Guarantor), dated August 10, 1994,
executed by the Borrower in favor of the Lender;
(ii) Security and Pledge (Pledgor), dated August 10, 1994,
executed by GT Mexico Holding Company in favor of the Lender;
(iii) Guaranty and Security Agreement (the "Metrum Guaranty"),
dated November 22, 1994, executed by Metrum in favor of the Lender;
(iv) Guaranty and Security Agreement (the "GT Mexico Holding
Company Guaranty"), dated November 22, 1994, executed by GT Mexico Holding
Company in favor of the Lender;
(v) Guaranty (the "GT Mexico Guaranty"), dated November 22,
1994, executed by GT Mexico in favor of the Lender;
(vi) Pledge Agreement, dated November 22, 1994, executed by the
Borrower in favor of the Lender, regarding the pledge of Metrum stock;
(vii) Pledge Agreement, dated November 22, 1994, executed by the
Borrower in favor of the Lender, regarding the pledge of GT Mexico Holding
Company stock; and
(viii) Guaranty (the "GT Brazil Guaranty"), dated March 29, 1996,
executed by GT Brazil in favor of the Lender.
Each of the Borrower, Metrum, GT Mexico Holding Company, GT Mexico, and GT
Brazil acknowledges and agrees that it is and shall remain liable for the
payment of all Obligations to the full extent provided in the Metrum Guaranty,
the GT Mexico Holding Company Guaranty, the GT Mexico Guaranty and the GT Brazil
Guaranty, respectively.
9. Lender's Expenses. Borrower shall pay to or for the account of the
Lender all costs and expenses, including legal fees and disbursements of counsel
to the Lender, incurred by the Lender in connection with this Amendment.
10. No Other Modifications. Except as expressly amended or modified by
the terms hereof, the Agreement and the Warrant shall remain in full force and
effect. This Amendment shall not affect, modify or diminish the obligations of
Borrower which have accrued prior to the effectiveness of the provisions hereof.
11. Representations and Warranties True and Correct. The Borrower hereby
certifies that the representations and warranties contained in the Agreement
continue to be true and correct and that no Default or Event of Default has
occurred.
12. Choice of Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
FLORIDA.
13. JURY TRIAL WAIVER. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATED TO THIS
AMENDMENT.
14. Counterpart Signatures. This Amendment may be executed in any number
of counterparts all of which together shall constitute one and the same
agreement of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
Amended and Restated Credit Agreement to be duly executed, sealed and delivered
the day and year first above written.
BORROWER:
GROUP TECHNOLOGIES CORPORATION,
a Florida corporation
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
LENDER:
FIRST UNION COMMERCIAL CORPORATION,
a North Carolina corporation
By: /s/Xxxxxxx Xxxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxxx
Title: Vice President
Each of the Guarantors whose name is set forth below acknowledges that it
has reviewed, confirmed and consented to the terms of this Amendment and each of
the documents and transactions contemplated hereby, including, but not limited
to, the terms of Section 3 of this Amendment.
GROUP TECHNOLOGIES S.A. de C.V.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Authorized Signatory
GROUP TECHNOLOGIES MEXICAN HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
METRUM, INC.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Secretary & Treasurer
GROUP TECHNOLOGIES SUPRIMENTOS DE
INFORMATICA INDUSTRIA E COMERCIO LTDA.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Authorized Signatory
