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EXHIBIT 10.1.3
FOURTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT
FOURTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT (this "Agreement")
is made as of the 29th day of September, 2000, by GLASSTECH, INC., a corporation
organized under the laws of Delaware (the "Borrower"), and BANK OF AMERICA,
N.A., a national banking association (the "Lender"), formerly "NationsBank,
N.A.".
RECITALS
A. The Borrower and the Lender entered into a Financing and Security
Agreement dated July 2, 1997 (the same, as amended by (i) that certain First
Amendment to Financing and Security Agreement dated as of October 29, 1997, (ii)
that certain Second Amendment to Financing and Security Agreement dated as of
December 31, 1998 and (iii) that certain Third Amendment to Financing and
Security Agreement dated as of June 29, 1999 and as amended, modified,
substituted, extended, and renewed from time to time, the "Financing
Agreement"). The Financing Agreement provides for agreements between the
Borrower and the Lender with respect to the "Loans" (as defined in the Financing
Agreement), including a revolving credit facility in an amount not to exceed
$10,000,000.
B. The Borrower has requested that the Lender increase the amount of the
revolving credit facility to $13,000,000, increase the portion of the credit
facility that may be used for letters of credit to $13,000,000, and amend
certain financial covenants contained in the Financing Agreement.
C. The Lender is willing to agree to the Borrower's request on the
condition that this Agreement be executed.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Borrower
and the Lender agree as follows:
1. The Borrower and the Lender agree that the Recitals above are a part of
this Agreement. Unless otherwise expressly defined in this Agreement, terms
defined in the Financing Agreement shall have the same meaning under this
Agreement.
2. The Borrower represents and warrants to the Lender as follows:
(a) The Borrower is a corporation duly organized, and validly existing
and in good standing under the laws of the state in which it was organized
and is duly qualified to do business as a foreign corporation in good
standing in every other state wherein the conduct of its business or the
ownership of its property requires such qualification and in which the
failure to
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qualify would materially adversely affect the business, operations or
properties of the Borrower and/or its Subsidiaries.
(b) The Borrower has the power and authority to execute and deliver
this Agreement and perform its obligations hereunder and has taken all
necessary and appropriate corporate action to authorize the execution,
delivery and performance of this Agreement.
(c) The Financing Agreement, as amended by this Agreement, and each of
the other Financing Documents remains in full force and effect, and each
constitutes the valid and legally binding obligation of the Borrower,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured
parties, and general principles of equity regardless of whether applied in
a proceeding in equity or at law.
(d) All of the Borrower's representations and warranties contained in
the Financing Agreement are true and correct on and as of the date of the
Borrower's execution of this Agreement, except that the representations and
warranties which relate to financial statements which are referred to in
Section 4.1.11 of the Financing Agreement, shall also be deemed to cover
financial statements furnished from time to time to the Lender pursuant to
Section 6.1.1 (Financial Statements) of the Financing Agreement.
(e) No Event of Default and no event which, with notice, lapse of time
or both would constitute an Event of Default, has occurred and is
continuing under the Financing Agreement or the other Financing Documents.
3. The definitions of "Assignment of Patents" and "Eligible Progress
Billing" in Section 1.1 of the Financing Agreement are hereby amended as
follows:
"ASSIGNMENT OF PATENTS" MEANS THAT CERTAIN COLLATERAL ASSIGNMENT OF
PATENTS AS SECURITY DATED AS OF SEPTEMBER 29, 2000, FROM THE BORROWER FOR
THE BENEFIT OF THE LENDER, AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE
MODIFIED IN WRITING AT ANY TIME AND FROM TIME TO TIME.
"ELIGIBLE PROGRESS BILLING" MEANS THE COLLECTIVE REFERENCE TO ACCOUNTS
OF THE BORROWER ARISING WITH RESPECT TO THE SALE OF (a) GLASS BENDING AND
TEMPERING/ANNEALING SYSTEMS OR (b) RETROFITS OR COMPONENT SUBSYSTEMS OF
SUCH SYSTEMS, ALL MANUFACTURED BY THE BORROWER, SUCH ACCOUNTS CONSISTING
SOLELY OF PROGRESS XXXXXXXX DUE WITH RESPECT TO SUCH SYSTEMS, RETROFITS AND
SUBSYSTEMS THAT HAVE BEEN SHIPPED TO THE ACCOUNT DEBTOR, BUT NOT FINALLY
ACCEPTED BY THE ACCOUNT DEBTOR, PROVIDED THAT THE PAYMENT OF THE PROGRESS
BILLING DUE SHALL BE SECURED BY A LETTER OF CREDIT IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE LENDER, WHICH LETTER OF CREDIT, DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, SHALL BE IN THE LENDER'S POSSESSION
WITH ALL DOCUMENTS AND CERTIFICATES REQUIRED FOR DRAWING THEREUNDER.
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4. The second paragraph of Section 2.1.1 of the Financing Agreement,
containing the definition of "Revolving Credit Committed Amount," is hereby
deleted in its entirety, and the following is substituted in its place:
THE PRINCIPAL AMOUNT OF THIRTEEN MILLION DOLLARS ($13,000,000) IS THE
"REVOLVING CREDIT COMMITTED AMOUNT". IF AT ANY TIME THE UNPAID PRINCIPAL
BALANCE OF THE REVOLVING LOAN AND OF THE LETTER OF CREDIT OBLIGATIONS
EXCEED THE REVOLVING CREDIT COMMITTED AMOUNT IN EFFECT FROM TIME TO TIME,
THE BORROWER SHALL PAY SUCH EXCESS TO THE LENDER ON DEMAND.
5. Section 2.1.7 of the Financing Agreement is hereby deleted in its
entirety, and the following is substituted in its place:
2.1.7 BORROWING BASE.
AS USED IN THIS AGREEMENT, THE TERM "BORROWING BASE" MEANS AT ANY
TIME, AN AMOUNT EQUAL TO THE AGGREGATE OF:
(a) THE LESSER OF $7,000,000 OR THE AGGREGATE OF (i) EIGHTY FIVE
PERCENT (85%) OF THE AMOUNT OF ELIGIBLE RECEIVABLES, PLUS (ii) THE
LESSER OF $1,000,000 OR TWENTY PERCENT (20%) OF THE AMOUNT OF ELIGIBLE
INVENTORY, PLUS (iii) THE LESSER OF (a) EIGHTY PERCENT (80%) OF THE
ORDERLY LIQUIDATION VALUE OF EQUIPMENT OR (b) $3,089,000; PLUS (iv)
ONE HUNDRED PERCENT (100%) OF THE FORCED LIQUIDATION VALUE OF THE
MORTGAGED PROPERTY; MINUS (v) $40,000 TIMES THE NUMBER OF MONTHS AFTER
SEPTEMBER 30, 2000 AND ON OR PRIOR TO THE DATE OF THE COMPUTATION OF
THE BORROWING BASE; PLUS
(b) ONLY TO THE EXTENT AN ADVANCE UNDER THE REVOLVING LOAN OR THE
ISSUANCE OF A LETTER OF CREDIT WOULD CAUSE THE OUTSTANDING PRINCIPAL
BALANCE OF THE REVOLVING LOAN AND OF THE LETTER OF CREDIT OBLIGATIONS
TO EXCEED $7,000,000 IN THE AGGREGATE, 100% OF THE AMOUNT OF CASH THAT
HAS BEEN PLEDGED PRIOR TO SUCH ADVANCE OR ISSUANCE TO THE LENDER IN A
MANNER THAT IS IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
LENDER.
THE VALUES DESCRIBED IN CLAUSES (a)(iii) AND (a)(iv) ABOVE SHALL BE
DETERMINED BY APPRAISALS PREPARED FOR THE LENDER FROM TIME TO TIME BY
APPRAISERS SATISFACTORY TO THE LENDER AND SHALL INCLUDE, WITHOUT
LIMITATION, INFORMATION REQUIRED BY APPLICABLE LAW AND REGULATION AND BY
THE INTERNAL POLICIES OF THE LENDER AND SHALL BE SUBJECT TO INTERNAL REVIEW
BY THE LENDER. AT THE TIME OF ANY SALE, OTHER DISPOSITION OR ADDITION
(OTHERWISE PERMITTED BY THIS AGREEMENT) OF EQUIPMENT WITH A FAIR MARKET OF
$100,000 OR MORE THAT CHANGES THE VALUE USED IN COMPUTING CLAUSE (a)(iii)
ABOVE, THE BORROWER SHALL SO NOTIFY THE LENDER, IDENTIFY THE APPLICABLE
EQUIPMENT AND THE ORDERLY
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LIQUIDATION VALUE THEREOF (WHICH, IN THE CASE OF ADDITIONS, SHALL BE
ACCOMPANIED BY AN APPRAISAL MEETING THE REQUIREMENTS OF THE PRECEDING
SENTENCE). THE LENDER SHALL THEREUPON ADJUST THE AMOUNT APPLICABLE UNDER
CLAUSE (a)(v) ABOVE PRO RATA BASED ON THE CHANGES TO EQUIPMENT AND SO
NOTIFY THE BORROWER.
THE BORROWING BASE SHALL BE COMPUTED BASED ON THE BORROWING BASE
REPORT MOST RECENTLY DELIVERED TO, AND ACCEPTED BY, THE LENDER IN ITS
REASONABLE DISCRETION. IN THE EVENT THE BORROWER SHALL FAIL TO FURNISH A
BORROWING BASE REPORT REQUIRED BY SECTION 2.1.8 (BORROWING BASE REPORT), OR
IN THE EVENT THE LENDER REASONABLY BELIEVES THAT A BORROWING BASE REPORT IS
NO LONGER ACCURATE, THE LENDER MAY, IN ITS SOLE AND ABSOLUTE DISCRETION
EXERCISED FROM TIME TO TIME AND WITHOUT LIMITING ITS OTHER RIGHTS AND
REMEDIES UNDER THIS AGREEMENT, CONTINUE, SUSPEND THE MAKING OF OR LIMIT
ADVANCES UNDER THE REVOLVING LOAN. THE BORROWING BASE SHALL BE SUBJECT TO
REDUCTION BY THE AMOUNT OF ANY RECEIVABLE OR ANY INVENTORY WHICH WAS
INCLUDED IN THE BORROWING BASE BUT WHICH THE LENDER DETERMINES, IN
ACCORDANCE WITH THIS AGREEMENT, FAILS TO MEET THE RESPECTIVE CRITERIA
APPLICABLE FROM TIME TO TIME FOR ELIGIBLE RECEIVABLES OR ELIGIBLE
INVENTORY.
IF AT ANY TIME THE TOTAL OF THE AGGREGATE PRINCIPAL AMOUNT OF THE
REVOLVING LOAN AND OUTSTANDING LETTER OF CREDIT OBLIGATIONS EXCEEDS THE
BORROWING BASE, A BORROWING BASE DEFICIENCY ("BORROWING BASE DEFICIENCY")
SHALL EXIST. EACH TIME A BORROWING BASE DEFICIENCY EXISTS, THE BORROWER, AT
THE SOLE AND ABSOLUTE DISCRETION OF THE LENDER EXERCISED FROM TIME TO TIME,
SHALL PAY THE BORROWING BASE DEFICIENCY ON DEMAND TO THE LENDER.
6. Section 2.1.8 of the Financing Agreement is hereby deleted in its
entirety, and the following is substituted in its place:
2.1.8 BORROWING BASE REPORT.
THE BORROWER WILL FURNISH TO THE LENDER A REPORT OF THE BORROWING BASE
(EACH A "BORROWING BASE REPORT"; COLLECTIVELY, THE "BORROWING BASE
REPORTS") IN THE FORM REQUIRED FROM TIME TO TIME BY THE LENDER,
APPROPRIATELY COMPLETED AND DULY SIGNED, (x) NO LESS FREQUENTLY THAN
WEEKLY, NO LATER THAN THE SECOND BUSINESS DAY OF EACH WEEK FOR THE LAST
BUSINESS DAY OF THE PRECEDING WEEK, COMMENCING NO LATER THAN NOVEMBER 14,
2000, FOR NOVEMBER 10, 2000, AND (y) AT SUCH OTHER TIMES AS MAY BE
REASONABLY REQUESTED BY THE LENDER. THE BORROWING BASE REPORT SHALL CONTAIN
THE AMOUNT AND PAYMENTS ON THE RECEIVABLES, THE VALUE OF INVENTORY, OTHER
PROPERTY COMPONENTS INCLUDED IN THE DEFINITION OF "BORROWING BASE" AND THE
CALCULATIONS OF THE BORROWING BASE, ALL IN SUCH DETAIL, AND ACCOMPANIED BY
SUCH SUPPORTING AND OTHER INFORMATION, AS THE LENDER MAY FROM TIME TO TIME
REASONABLY REQUEST. UPON THE LENDER'S REASONABLE REQUEST UPON THE CREATION
OF ANY RECEIVABLES OR AT SUCH OTHER INTERVALS AS THE LENDER MAY REASONABLY
REQUIRE, THE BORROWER WILL PROVIDE THE LENDER WITH: (a)
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CONFIRMATORY ASSIGNMENT SCHEDULES; (b) COPIES OF ACCOUNT DEBTOR INVOICES;
(c) EVIDENCE OF SHIPMENT OR DELIVERY; AND (d) SUCH FURTHER SCHEDULES,
DOCUMENTS AND/OR INFORMATION REGARDING ANY OF THE RECEIVABLES AND THE
INVENTORY AS THE LENDER MAY REASONABLY REQUIRE. THE ITEMS TO BE PROVIDED
UNDER THIS SUBSECTION SHALL BE IN FORM SATISFACTORY TO THE LENDER,
CERTIFIED AS TRUE AND CORRECT BY A RESPONSIBLE OFFICER (OR BY ANY OTHER
OFFICERS OR EMPLOYEES OF THE BORROWER WHOM A RESPONSIBLE OFFICER FROM TIME
TO TIME AUTHORIZES IN WRITING TO DO SO), AND DELIVERED TO THE LENDER FROM
TIME TO TIME SOLELY FOR THE LENDER'S CONVENIENCE IN MAINTAINING RECORDS OF
THE COLLATERAL. THE FAILURE OF THE BORROWER TO DELIVER ANY SUCH ITEMS TO
THE LENDER SHALL NOT AFFECT, TERMINATE, MODIFY, OR OTHERWISE LIMIT THE
LIENS OF THE LENDER ON THE COLLATERAL.
7. Section 2.2.1 of the Financing Agreement is hereby deleted in its
entirety, and the following is substituted in its place:
2.2.1 LETTERS OF CREDIT. SUBJECT TO AND UPON THE PROVISIONS OF THIS
AGREEMENT, AND AS A PART OF THE REVOLVING CREDIT COMMITMENT, THE BORROWER
MAY, UPON THE PRIOR APPROVAL OF THE LENDER, OBTAIN STANDBY LETTERS OF
CREDIT (AS THE SAME MAY FROM TIME TO TIME BE AMENDED, SUPPLEMENTED OR
OTHERWISE MODIFIED, EACH A "LETTER OF CREDIT" AND COLLECTIVELY THE "LETTERS
OF CREDIT") FROM THE LENDER FROM TIME TO TIME FROM THE CLOSING DATE UNTIL
THE BUSINESS DAY PRECEDING THE REVOLVING CREDIT TERMINATION DATE. THE
BORROWER WILL NOT BE ENTITLED TO OBTAIN A LETTER OF CREDIT HEREUNDER UNLESS
(a) AFTER GIVING EFFECT TO THE REQUEST, THE OUTSTANDING PRINCIPAL BALANCE
OF THE REVOLVING LOAN AND OF THE LETTER OF CREDIT OBLIGATIONS WOULD NOT
EXCEED THE LESSER OF (i) THE REVOLVING CREDIT COMMITTED AMOUNT, OR (ii) THE
MOST CURRENT BORROWING BASE AND (b) THE SUM OF THE AGGREGATE FACE AMOUNT OF
THE THEN OUTSTANDING LETTERS OF CREDIT (INCLUDING THE FACE AMOUNT OF THE
REQUESTED LETTER OF CREDIT) DOES NOT EXCEED THIRTEEN MILLION DOLLARS
($13,000,000).
8. Section 3.2 of the Financing Agreement is hereby amended by amending the
last paragraph (beginning with the word "Notwithstanding") thereof to read as
follows:
Notwithstanding any other provision of this Agreement and the other
Security Documents, the Lender agrees that the failure of the Lender to have its
security interest in patents perfected outside the United States until an
appropriate recording is made shall not be a breach of any provision of this
Agreement or the other Financing Documents. The Lender agrees that no such
recording shall be required except as the Lender directs during the continuance
of an Event of Default.
9. Subsection (a) of Section 6.1.15 of the Financing Agreement is hereby
deleted in its entirety, and the following is substituted in its place:
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6.1.15 FINANCIAL COVENANTS.
(a) FIXED CHARGE COVERAGE RATIO. THE BORROWER WILL MAINTAIN, (i)
TESTED, AS OF SEPTEMBER 30, 2000, DECEMBER 31, 2000, AND MARCH 31, 2001,
FOR THE FISCAL QUARTER ENDING ON THOSE DATES, (ii) TESTED AS OF JUNE 30,
2001, FOR THE TWO (2) FISCAL QUARTER PERIOD ENDING ON THAT DATE, (iii)
TESTED AS OF SEPTEMBER 30, 2001, FOR THE THREE (3) FISCAL QUARTER PERIOD
ENDING ON THAT DATE, AND (iv) TESTED AS OF THE LAST DAY OF EACH OF THE
BORROWER'S FISCAL QUARTERS COMMENCING DECEMBER 31, 2001, FOR THE FOUR (4)
FISCAL QUARTER PERIOD ENDING ON THAT DATE, A FIXED CHARGE COVERAGE RATIO OF
NOT LESS THAN THE FOLLOWING:
PERIOD ENDING RATIO
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SEPTEMBER 30, 2000 0.25 TO 1.0
DECEMBER 31, 2000 0.75 TO 1.0
MARCH 31, 2001 AND THEREAFTER 1.00 TO 1.0
10. Subsection (b) of Section 6.1.15 of the Financing Agreement is hereby
deleted in its entirety without renumbering.
11. The Lender shall obtain an appraisal by Xxxxx Systems Inc. (made on an
orderly liquidation value basis) with respect to the Equipment located at the
Mortgaged Property and at 000 0xx Xxxxxx, Xxxxxxxxxx, Xxxx, which appraisal
shall be at the Borrower's sole cost and expense. The basis of the appraisal
calculations shown on such appraisal and all other aspects of the appraisal
report must be reasonably satisfactory to the Lender in all respects.
12. At the time this Agreement is executed and delivered, the Borrower
shall execute and deliver an Assignment of Patents.
13. The Lender agrees that notwithstanding the provisions of the Financing
Agreement with respect to the update of the Collateral Disclosure List, the
Borrower shall be required to update the schedule of the Collateral Disclosure
List with respect to new and abandoned Patents only upon the Lender's reasonable
written request from time to time.
14. The Borrower and the Lender agree that the provisions of Section 7.2.4
are immediately operative and shall continue to be operative whether or not
there exists an Event of Default; provided, however, that unless an Event of
Default is continuing, collected funds received by the Lender from the
Collateral Account shall as of the next Business Day be applied to the
outstanding principal balance of the Revolving Loan, with any remaining amount
to be deposited to a depository account of the Borrower as directed by the
Borrower. At the time this Agreement is executed and delivered, the Borrower
shall execute and deliver a blocked account agreement, in form and substance
satisfactory to the Lender, pursuant to which the Borrower and its lockbox
depository agree, among other things, that upon notice from the Lender the
lockbox depository shall honor only the directions of the Lender with respect to
the lockbox and related
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depository account. The Lender may give that notice in the exercise of its sole
and absolute discretion, at any time during the continuance of an Event of
Default and at any time when any Loans (without taking into account Letter of
Credit Obligations) are outstanding under the Financing Agreement.
15. In the exercise of the Lender's discretion, the Borrower is hereby
directed to deposit or cause to be deposited all Items of Payment (as defined in
the Financing Agreement) to the Collateral Account (as defined in the Financing
Agreement) in accordance with Section 7.2.4 of the Financing Agreement.
16. The Borrower shall pay at the time this Agreement is executed and
delivered an amendment fee in the amount of $25,000, which amendment fee is
fully earned and non-refundable.
17. The Borrower shall pay at the time this Agreement is executed and
delivered all fees, commissions, costs, charges, taxes and other expenses
incurred by the Lender and its counsel in connection with this Agreement,
including, but not limited to, reasonable fees and expenses of the Lender's
counsel and all recording fees, taxes and charges.
18. This Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be deemed
to be an original and taken together shall constitute but one and the same
instrument. The parties agree that their respective signatures may be delivered
by facsimile. Any party which chooses to deliver its signature by facsimile
agrees to provide a counterpart of this Agreement with its inked signature
promptly to each other party.
IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Agreement under seal as of the date and year first written above.
WITNESS: BANK OF AMERICA, N.A., formerly
"NationsBank, N.A."
_________________________ By: /s/ Xxxxxxx X. Xxxxxxxx (SEAL)
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Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
WITNESS: GLASSTECH, INC.
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
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Name: Xxxxx X. Xxxxxx
Title: Vice President, Treasurer
and Chief Financial Officer
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