AMENDMENT NO. 10 TO LOAN AND SECURITY AGREEMENT
EXHIBIT 10.10
AMENDMENT
NO. 10 TO
This
Amendment No. 10 to Loan and Security Agreement (“Amendment”)
is made and entered into as of March 5, 2009 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, Amendment No. 2 to Loan and Security Agreement
dated as of July 13, 2005, Amendment No. 3 to Loan and Security Agreement dated
as of April 25, 2006, Amendment No. 4 to Loan and Security Agreement dated as of
September 6, 2006, Amendment No. 5 to Loan and Security Agreement dated as of
January 22, 2007, Amendment No. 6 to Loan and Security Agreement dated as of
March 26, 2007, a Seventh Amendment to Loan and Security Agreement dated as of
April 24, 2007, an Amendment No. 8 to Loan and Security Agreement dated as of
June 27, 2008, and an Amendment No. 9 to Loan and Security Agreement dated as of
December 8, 2008 (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superseded, are hereinafter collectively referred to as the “Loan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. Amendment. The
definition of “Obligations” contained in Exhibit A to the Loan Agreement is
hereby amended and restated in its entirety to read as follows:
“Obligations”
means all debt, principal, interest, Bank Expenses and other amounts owed to
Bank by Borrower pursuant to this Agreement or any other Loan Document, and all
amounts owed to Bank by Borrower in connection with automatic clearing house
transactions, Letters of Credit, or corporate credit cards, in each case whether
absolute or contingent, due or to become due, now existing or hereafter arising,
including any interest that accrues after the commencement of an Insolvency
Proceeding and including any debt, liability, or obligation owing from Borrower
to others that Bank may have obtained by assignment or otherwise.
3. Availability to Borrow Under the
Revolving Line and Corporate Credit Cards. Notwithstanding
anything to the contrary contained in the Loan Agreement and other Loan
Documents, Borrower may not request (i) any Advances under the Revolving Line,
(ii) any new Letters of Credit to be issued, or (iii) any new corporate credit
cards from Bank or advances under such credit cards, provided that Borrower may
request advances under any existing corporate credit cards up to $25,000 in the
aggregate (the “Corporate Credit
Card Advances”). Bank’s commitment to make Advances, issue
Letters of Credit or make advances under any corporate credit cards (except as
set forth in the previous sentence) is hereby terminated.
4. Extension of Maturity of Existing
Letters of Credit. The maturity date of the following Letters
of Credit is hereby extended to the dates set forth below:
Letter of Credit #
638864 November
10, 2010
Letter of Credit #
599018 July
15, 2010
5. Cash Collateralization of
Obligations. Borrower shall at all times maintain a money
market account (Account Number 1892-62865-0) with Bank with a balance (the
“Required Balance”) equal to or greater than the aggregate amount of the
Obligations. Such money market account and all amounts held therein,
together with all proceeds thereof, interest paid thereon, and substitutions
therefor, and all accounts, securities, instruments, securities entitlements and
financial assets arising out of any of the foregoing, are the “Cash
Collateral”. Without in any way limiting the grant of a security
interest in the Collateral pursuant to the Loan Agreement, Borrower hereby
grants and pledges to Bank a continuing security interest in all presently
existing and hereafter acquired or arising Cash Collateral, to secure prompt
repayment of any and all Obligations and to secure prompt performance by
Borrower of each of its covenants and duties under the Loan
Documents. Bank shall retain control over the Cash Collateral up to
the Required Balance to secure the Obligations until such Obligations have been
satisfied in full. Borrower hereby authorizes Bank to place
restrictions on Borrower’s ability to withdraw amounts from accounts holding the
Cash Collateral in order to ensure that such Required Balance is
maintained. Borrower authorizes Bank to execute and/or file such
documents, and take such actions, as Bank determines reasonable to perfect its
security interest in the Cash Collateral. Such security interest
constitutes a valid, first priority security interest in the Cash Collateral,
and will constitute a valid, first priority security interest in Cash Collateral
acquired after the date hereof. Borrower will execute and deliver
such documents, and take or cause to be taken such actions, as Bank may
reasonably request to perfect or continue the perfection of Bank’s security
interest in the Cash Collateral. Notwithstanding
termination of the Loan Agreement, Bank’s Lien on the Cash Collateral shall
remain in effect for so long as any Obligations are outstanding. Failure to
comply with this Section 5 shall constitute an immediate Event of
Default.
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EXHIBIT
10.10
6. Termination of Loan
Agreement. Subject to Section 13.7 of the Loan Agreement, upon
payment in full of all outstanding Obligations (other than (i) contingent
indemnification obligations and (ii) Obligations related to Letter of Credit #
638864, Letter of Credit # 599018, Corporate Credit Card Advances, and automatic
clearing house transactions) under the Loan Agreement and under the other Loan
Documents, the Loan Agreement and the other Loan Documents (other than Loan
Documents relating specifically to such Letters of Credit, the Corporate Credit
Card Advances, and automatic clearing house transactions, including without
limitation, Sections 2, 3, 4, and 5 hereof) shall terminate without further act
and Bank will, at Borrower’s expense, execute and deliver such documents and
take such other action as Borrower may reasonably request to evidence such
termination and to release the Collateral (other than the Cash Collateral) from
the Lien of the Loan Agreement and to release the Collateral (as defined in the
Third Party Security Agreement) from the Lien of the Third Party Security
Agreement dated as of March 26, 2007 (the “Third Party
Security Agreement”) between Electroglas International, Inc. and
Bank.
7. 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
acknowledges 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, subject to
Section 6 above.
8. Representations And
Warranties. Except as set forth on the Amendment to Schedule
attached hereto, 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.
9. 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.
10. 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) the
Acknowledgment of Amendment and Reaffirmation of Guaranty, executed by
Electroglas International, Inc., a Delaware corporation
(“Guarantor”);
(c) payment
of the fees and Bank Expenses then due specified in Section 2.5 of the Loan
Agreement, as amended hereby; and
(d) such
other documents, and completion of such other matters, as Bank may reasonably
deem necessary or appropriate.
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EXHIBIT
10.10
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
Xxxxxxx
Title:
CFO
Bank:
Comerica Bank
By: /s/Xxxxxx
Xxxxx
Title:
SVP
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EXHIBIT
10.10
ACKNOWLEDGMENT
OF AMENDMENT
AND
REAFFIRMATION OF
GUARANTY
SECTION
1. The
undersigned (“Guarantor”)
hereby acknowledges and confirms that it has reviewed and approved the terms and
conditions of that certain Amendment No. 10 to Loan and Security Agreement dated
as of March 5, 2009 (the “Amendment”),
between Electroglas, Inc., a Delaware corporation, as borrower (“Borrower”),
and Comerica Bank, as lender (“Bank”).
SECTION
2. Guarantor
hereby consents to the Amendment and reaffirms that its guaranty obligations
under that certain Unconditional Guaranty dated as of March 26, 2007 executed by
Guarantor in favor of Bank (the “Guaranty”))
shall continue in full force and effect, shall be valid and enforceable and
shall not be impaired or otherwise affected by the execution of the Amendment or
any other document or instrument delivered in connection herewith or
therewith. Guarantor further hereby ratifies and reaffirms the
validity and enforceability of all of the liens and security interests
heretofore granted pursuant to the Third Party Security Agreement dated as of
March 26, 2007 between Guarantor and Bank (the “Third Party
Security Agreement”), as collateral security for the Guarantor
Obligations (as defined in the Third Party Security Agreement), and acknowledges
that all of such liens and security interests, and all Collateral (as defined in
the Third Party Security Agreement) heretofore pledged as security for the
Guarantor Obligations, continues to be and remains Collateral for the Guarantor
Obligations from and after the date hereof, subject to Section 6 of the
Amendment.
SECTION
3. Guarantor
represents and warrants that, after giving effect to the Amendment, all
representations and warranties of Guarantor contained in the Guaranty and the
Third Party Security Agreement are true, accurate and complete as if made on the
date hereof.
Dated as
of March 5, 2009.
Guarantor Electroglas
International, Inc.
By: /s/ Xxxxxx
Xxxxxxx
Its: CFO
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