Exhibit 10.4
AMENDMENT NO. 3 TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT ("Amendment") is made
and entered into as of April 25, 2006 by and between ELECTROGLAS, INC., a
Delaware corporation ("Borrower") and COMERICA BANK ("Bank").
RECITALS
A. Borrower and Bank have entered into that certain Loan and Security
Agreement dated as of July 16, 2004, as amended by Amendment No. 1 to Loan and
Security Agreement dated as of January 24, 2005 and Amendment No. 2 to Loan and
Security Agreement dated as of July 12, 2005 (collectively, the "Loan
Agreement") pursuant to which Bank has agreed to extend and make available to
Borrower certain credit facilities.
B. Borrower desires that Bank amend the Loan Agreement upon the terms and
conditions more fully set forth herein.
C. Subject to the representations and warranties of Borrower herein and
upon the terms and conditions set forth in this Amendment, Bank is willing to so
amend the Loan Agreement.
D. This Amendment, the Loan Agreement and the other Loan Documents (as
defined in the Loan Agreement), together with all other documents entered into
or delivered pursuant to any of the foregoing, in each case as originally
executed or as the same may from time to time be modified, amended,
supplemented, restated or superseded, are hereinafter collectively referred to
as the "Loan Documents."
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants herein set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, Borrower and Bank hereby agree to amend the Loan Agreement as
follows:
1. Definitions. Unless otherwise defined herein, all terms
defined in the Loan Agreement have the same meaning when used herein.
2. Waiver. Subject to the terms and conditions set forth herein
and in reliance upon the representations and warranties of Borrower set forth
herein, Bank hereby waives the violation of the Effective Tangible Net Worth
covenant contained in Section 6.7(b) of the Loan Agreement with respect to the
fiscal quarter ending March 4, 2006. This waiver is one-time only, is limited
precisely as written, and shall not be deemed to be a consent to the breach of
this covenant for any other quarterly period, or the breach of any other
covenant
1
3. Amendments to Loan Agreement.
a. The definition of "Revolving Maturity Date" contained in
Exhibit A to the Loan Agreement is hereby amended and restated to read as
follows:
"Revolving Maturity Date" means September 30, 2006.
b. Section 6.7(b) of the Loan Agreement is hereby amended by
substituting "$46,000,000" for "$50,000,000" in the second line thereof.
c. The Bank's address for the purpose of notices contained in
Section 10 of the Loan Agreement is amended as follows:
If to Bank: COMERICA BANK
00 Xxxx Xxxxxxx Xxxx
Mail Code 4770
Xxx Xxxx, XX 00000
FAX: (000) 000-0000
with a copy to: COMERICA BANK
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx, Senior Vice President & Manager
FAX: (000) 000-0000
4. Ratification and Reaffirmation of Liens. Borrower hereby
ratifies and reaffirms the validity and enforceability of all of the liens and
security interests heretofore granted pursuant to the Loan Documents, as
collateral security for the Obligations, and acknowledge that all of such liens
and security interests, and all Collateral heretofore pledged as security for
the Obligations, continues to be and remains Collateral for the Obligations from
and after the date hereof.
5. Representations And Warranties. Borrower represents and
warrants that its representations and warranties in the Loan Documents (as
amended hereby) continue to be true and complete in all material respects as of
the date hereof after giving effect to this Amendment (except to the extent such
specifically relate to another date) and that the execution, delivery and
performance of this Amendment are duly authorized, do not require the consent or
approval of any governmental body or regulatory authority and are not in
contravention of or in conflict with any law or regulation or any term or
provision of any other agreement entered into by Borrower. Borrower further
represents and warrants that, as of the date hereof after giving effect to this
Amendment, no Event of Default has occurred and is continuing.
6. Full Force And Effect; Entire Agreement. Except to the extent
expressly provided in this Amendment, the terms and conditions of the Loan
Agreement and the other Loan Documents shall remain in full force and effect.
This Amendment and the other Loan Documents constitute and contain the entire
agreement of the parties hereto and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications between the
parties, whether written or oral, respecting the subject matter hereof. The
parties hereto further agree that the Loan Documents comprise the entire
agreement of the parties thereto and supersede any and all prior agreements,
negotiations, correspondence, understandings and other communications between
the parties thereto, whether written or oral respecting the extension of credit
by Bank to Borrower and/or its affiliates. Except as expressly set forth herein,
the execution, delivery and performance of this Amendment shall not operate as a
waiver of, or as an amendment of, any right, power or remedy of Bank under the
Loan Agreement or any other Loan Document as in effect prior to the date hereof.
2
7. Counterparts; Effectiveness. This Amendment may be executed in
any number of counterparts, each of which when so delivered shall be deemed an
original, but all such counterparts taken together shall constitute but one and
the same instrument. This Amendment is effective as of the date first above
written; provided that, as a condition precedent to the effectiveness of this
Amendment, (i) there shall have been no material adverse change in the business
operations or condition (financial or otherwise) of Borrower and its
Subsidiaries taken as a whole, no material impairment of the prospect of
repayment of any portion of the Obligations owing to Bank, and no material
impairment of the value or priority of the security interest in the Collateral
and (ii) Bank shall have received, in form and substance satisfactory to Bank,
the following:
(a) this Amendment, duly executed by Borrower;
(b) payment of the fees and Bank Expenses then due specified
in Section 2.5 of the Loan Agreement, as amended hereby; and
(c) such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be executed and delivered by its duly authorized officer as of the date first
written above.
BORROWER:
ELECTROGLAS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Title Chief Financial Officer
-----------------------
BANK:
COMERICA BANK
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Title: Senior Vice President
----------------------
3
