1
EXHIBIT 10.1.2
--------------
THIRD AMENDMENT TO FINANCING AND SECURITY AGREEMENT
---------------------------------------------------
THIRD AMENDMENT TO FINANCING AND SECURITY AGREEMENT (this "Agreement")
is made as of the 29th day of June, 1999, by GLASSTECH, INC., a corporation
organized under the laws of Delaware (the "Borrower"), and BANK OF AMERICA,
NATIONAL ASSOCIATION, 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 and
(ii) that certain Second Amendment to Financing and Security Agreement dated as
of December 31, 1998 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 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 qualify would materially adversely affect the business, operations or
properties of the Borrower and/or its Subsidiaries.
2
(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 definition of "Post Default Rate" in Section 1.1 of the
Financing Agreement is hereby deleted in its entirety, and the following is
substituted in its place:
"Post-Default Rate" means the Base Rate in effect from
time to time plus 200 basis points.
4. The following are hereby added as new definitions to Section 1.1 of
the Financing Agreement:
"Assets" means at any date all assets that, in
accordance with GAAP consistently applied, should be classified as
assets on a consolidated balance sheet of the Borrower and its
Subsidiaries.
"Borrowing Base" has the meaning described in Section
2.1.7 (Borrowing Base).
"Borrowing Base Deficiency" has the meaning described
in 2.1.7 (Borrowing Base).
"Borrowing Base Report" has the meaning described in
Section 2.1.8 (Borrowing Base Report).
-2-
3
"Eligible Inventory" means that portion of the
Borrower's parts inventory consisting solely of (i) ceramic roll
grinding inventory; (ii) spare parts inventory consisting of parts for
which specific, firm purchase orders exist; and (iii) furnace supply
inventory consisting of parts of standard manufacture and not
specialized for the Borrower's business, to the extent the same such
inventory is held by the Borrower for sale in the ordinary course of
business, valued at the lowest of the Borrower's net purchase cost or
net manufacturing cost, any ceiling prices which may be established by
any Law of any Governmental Authority or prevailing market value,
excluding, however, any Inventory which consists of:
(a) any goods located outside of the United States,
(b) any goods located outside of a state in which the Lender
has properly and unavoidably perfected its security interests by filing
in that state, free and clear of all other Liens,
(c) any goods not in the actual possession of the Borrower,
except to the extent provided in subsection (d) below,
(d) any goods in the possession of a bailee, warehouseman,
consignee or similar third party, except to the extent that such
bailee, warehouseman, consignee or similar third party has entered into
an agreement with the Lender in which such bailee, warehouseman,
consignee or similar third party consents and agrees to the Lender's
Lien on such goods and to such other terms and conditions as may be
required by the Lender, PROVIDED, HOWEVER, that, so long as the
Borrower is using its continuing reasonable efforts to obtain such a
waiver from its landlord at Ampointe Industrial Complex, Perrysburg,
Ohio 43551, the inventory at that location shall not be excluded from
the "Eligible Inventory" on account of this clause (d),
(e) any goods located on premises leased or rented to the
Borrower or otherwise not owned by the Borrower, unless the Lender has
received a waiver and consent from the lessor, landlord and/or owner,
in form and substance satisfactory to the Lender and from any mortgagee
of such lessor, landlord or owner to the extent required by the Lender,
(f) any goods the sale or other disposition of which has
given rise to a Receivable,
(g) any goods which fail to meet all standards and
requirements imposed by any Governmental Authority over such goods,
their production, storage, use or sale,
(h) work-in-process, supplies, displays, packaging and
promotional materials,
-3-
4
(i) (1) any goods as to which the Lender determines in the
reasonable exercise of its discretion at any time are not in good
condition or are defective, unmerchantable or obsolete and (2) blank
ceramic rolls that have not been sold for over two (2) years and other
goods that have not been sold for over one (1) year, and
(j) any goods which the Lender in the reasonable exercise of
its discretion has deemed to be ineligible because the Lender otherwise
considers the collateral value to the Lender to be impaired or its
ability to realize such value to be insecure.
"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 billings 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.
"Eligible Receivable" and "Eligible Receivables" mean,
at any time of determination thereof, the unpaid portion of each
account (net of any returns, discounts, claims, credits, charges,
accrued rebates or other allowances, offsets, deductions,
counterclaims, disputes or other defenses and reduced by the aggregate
amount of all reserves, limits and deductions reasonably established by
the Lender) payable in United States Dollars by the Borrower, provided
each account arises (i) following the completion of installation and
demonstration of (A) glass bending and tempering/annealing systems or
(B) retrofits or component subsystems of such systems, and all other
requirements for final payment under the applicable contracts, (ii)
from trade receivables arising from sales of inventory relating to or
from service of machinery manufactured by the Borrower, or (iii) from
Eligible Progress Billings and conforms and continues to conform to the
following criteria to the reasonable satisfaction of the Lender:
(a) the account arose in the ordinary course of the
Borrower's business from a bona fide outright sale of goods by the
Borrower (except that in the case of Eligible Progress Billings, such
sale may not be complete) or from services performed by the Borrower;
(b) the account is a valid, legally enforceable
obligation of the Account Debtor and requires no further act on the
part of any Person under any circumstances to make the account payable
by the Account Debtor, although further performance will be required
under contracts related to Eligible Progress Receivables;
(c) the account is based upon an enforceable order or
contract, written or oral, for goods shipped or for services performed,
and the same were shipped or performed in accordance with such order or
contract,
-4-
5
although further performance will be required under contracts related
to Eligible Progress Receivables;
(d) if the account arises from the sale of goods, the
goods the sale of which gave rise to the account have been shipped or
delivered to the Account Debtor on an absolute sale basis (although
further performance will be required under contracts related to
Eligible Progress Receivables) and not on a bill and hold sale basis, a
consignment sale basis, a guaranteed sale basis, a sale or return
basis, or on the basis of any other similar understanding;
(e) if the account arises from the performance of
services, such services have been fully rendered and do not relate to
any warranty claim or obligation;
(f) the account is evidenced by an invoice or other
documentation in form acceptable to the Lender, dated no later than the
date of shipment or performance and containing only terms normally
offered by the Borrower;
(g) the amount shown on the books of the Borrower and on
any invoice, certificate, schedule or statement delivered to the Lender
is owing to the Borrower and no partial payment has been received
unless reflected with that delivery;
(h) except with respect to the Account Debtors
identified on Schedule 1.1 attached to and made a part of this
Agreement, the account is not outstanding more than ninety (90) days
from the date of the invoice therefor or past due more than sixty (60)
days after its due date, which shall not be later than thirty (30) days
after the invoice date;
(i) only with respect to the Account Debtors identified
on Schedule 1.1 attached to and made a part of this Agreement, the
account is not outstanding more than one hundred twenty (120) days from
the date of the invoice therefor or past due more than ninety (90) days
after its due date, which shall not be later than sixty (60) days after
the invoice date;
(j) the account is not owing by any Account Debtor for
which the Lender has, in accordance with this Agreement, deemed fifty
percent (50%) or more of such Account Debtor's other accounts due to
the Borrower to be non-Eligible Receivables;
(k) the account is not owing by an Account Debtor whose
accounts owing to the Borrower in the aggregate exceed in the aggregate
the credit limit determined by Lender in its reasonable discretion, but
only to the extent such accounts exceed such limit;
-5-
6
(l) the Account Debtor has not returned, rejected or
refused to retain, or otherwise notified the Borrower of any dispute
concerning, or claimed nonconformity of, any of the goods or services
from the sale or furnishing of which the account arose;
m) the account is not subject to any present or
contingent (and no facts exist which are the basis for any future)
offset, claim, deduction or counterclaim, dispute or defense in law or
equity on the part of such Account Debtor, or any claim for credits,
allowances, or adjustments by the Account Debtor because of returned,
inferior, or damaged goods or unsatisfactory services, or for any other
reason including, without limitation, those arising on account of a
breach of any express or implied representation or warranty;
(n) the Account Debtor is not a Subsidiary or Affiliate
of the Borrower or an employee, officer, director or shareholder of the
Borrower or any Subsidiary or Affiliate of the Borrower;
(o) except for the Account Debtors identified on
SCHEDULE 1.1 or except to the extent the account is secured by a letter
of credit that has been assigned to the Lender, is subject to a first
Lien security interest in favor of the Lender, and is in the Lender's
possession, the Account Debtor is not incorporated or primarily
conducting business or otherwise located in any jurisdiction outside of
the United States of America;
(p) as to which none of the following events has
occurred with respect to the Account Debtor on such account: death or
judicial declaration of incompetency of an Account Debtor who is an
individual; the filing by or against the Account Debtor of a request or
petition for liquidation, reorganization, arrangement, adjustment of
debts, adjudication as a bankrupt, winding-up, or other relief under
the bankruptcy, insolvency, or similar laws of the United States, any
state or territory thereof, or any foreign jurisdiction, now or
hereafter in effect; the making of any general assignment by the
Account Debtor for the benefit of creditors; the appointment of a
receiver or trustee for the Account Debtor or for any of the assets of
the Account Debtor, including, without limitation, the appointment of
or taking possession by a "custodian," as defined in the Federal
Bankruptcy Code; the institution by or against the Account Debtor of
any other type of insolvency proceeding (under the bankruptcy laws of
the United States or otherwise) or of any formal or informal proceeding
for the dissolution or liquidation of, settlement of claims against, or
winding up of affairs of, the Account Debtor; the sale, assignment, or
transfer of all or any material part of the assets of the Account
Debtor; the nonpayment generally by the Account Debtor of its debts as
they become due; or the cessation of the business of the Account Debtor
as a going concern;
(q) the Account Debtor is not a Governmental Authority;
-6-
7
(r) the Borrower is not indebted in any manner to the
Account Debtor (as creditor, lessor, supplier or otherwise), with the
exception of customary credits, adjustments and/or discounts given to
an Account Debtor by the Borrower in the ordinary course of its
business, although further performance will be required under contracts
related to Eligible Progress Receivables;
(s) the account does not arise from services under or
related to any warranty obligation of the Borrower or out of service
charges, finance charges or other fees for the time value of money;
(t) the account is not evidenced by chattel paper or an
instrument of any kind and is not secured by any letter of credit;
(u) the title of the Borrower to the account is absolute
and is not subject to any prior assignment, claim, Lien, or security
interest, except Permitted Liens;
(v) no bond or other undertaking by a guarantor or
surety has been or is required to be obtained, supporting the
Borrower's obligations in respect of the underlying contract;
(w) the Borrower has the full and unqualified right and
power to assign and grant a security interest in, and Lien on, the
account to the Lender as security and collateral for the payment of the
Obligations;
(x) the account does not arise out of a contract with,
or order from, an Account Debtor that, by its terms, forbids or makes
void or unenforceable the assignment or grant of a security interest by
the Borrower to the Lender of the account arising from such contract or
order;
(y) the account is subject to a Lien in favor of the
Lender, which Lien is perfected as to the account by the filing of
financing statements and which Lien upon such filing constitutes a
first priority security interest and Lien;
(z) the goods giving rise to the account were not, at
the time of the sale thereof, subject to any Lien, except those in
favor of the Lender;
(aa) except for Eligible Progress Billings, no part of
the account represents a progress billing or a retainage;
(bb) the Lender in the good faith exercise of its
discretion has not deemed the account ineligible because of uncertainty
as to the creditworthiness of the Account Debtor or because the Lender
otherwise considers the collateral value of such account to the Lender
to be impaired or its ability to realize such value to be insecure; and
(cc) if the Account Debtor is located in a state
requiring the filing of a Notice of Business Activities Report or
similar report in order to
-7-
8
permit the Borrower to seek judicial enforcement in such state of
payment of such Account, the Borrower has qualified to do business in
such state or has filed a Notice of Business Activities Report or
equivalent report for the then current year.
"Senior Liabilities" means for any period of
determination thereof an amount equal to the total of the aggregate
amount of all of the Obligations and other Liabilities other than the
Senior Notes.
"Tangible Capital Funds" means for any date of
determination thereof the total of Tangible Net Worth plus the
outstanding principal balance of the Senior Notes.
"Tangible Net Worth" means as to the Borrower and its
Subsidiaries at any date of determination thereof, the sum at such time
of: Net Worth less the total of (a) all Assets which would be
classified as intangible assets under GAAP consistently applied, (b)
leasehold improvements, (c) applicable reserves, allowances and other
similar properly deductible items to the extent such reserves,
allowances and other similar properly deductible items have not been
previously deducted by the Lender in the calculation of Net Worth, (d)
any revaluation or other write-up in book value of assets subsequent to
the date of the most recent financial statements delivered to the
Lender, and (e) the amount of all loans and advances to, or investments
in, any Person, excluding Cash Equivalents and deposit accounts
maintained by the Borrower or its Subsidiaries with any financial
institution.
5. The third paragraph of Section 2.1.1 of the Financing Agreement is
hereby deleted in its entirety, and the following is substituted in its place:
During the Revolving Credit Commitment Period, the
Lender agrees to make advances under the Revolving Loan requested by
the Borrower from time to time provided that after giving effect to the
Borrower's request, the outstanding principal balance of the Revolving
Loan and of the Letter of Credit Obligations would not exceed the
lesser of (a) the Revolving Credit Committed Amount, or (b) the then
most current Borrowing Base.
6. Section 2.1.2 of the Financing Agreement is hereby deleted in its
entirety, and the following is substituted in its place:
The Borrower may borrow, prepay and reborrow under
the Revolving Credit Commitment on any Business Day. Advances under the
Revolving Loan shall be deposited to a demand deposit account of the
Borrower with the Lender (or an Affiliate of the Lender) or shall be
otherwise applied as directed by the Borrower, which direction the
Lender may require to be in writing. No later than noon (Baltimore
time) on the date of the requested borrowing, the Borrower shall give
the Lender oral or written notice (a "Loan Notice") of the amount and
(if requested by the Lender) the purpose of the requested borrowing.
Any oral Loan Notice shall be confirmed in writing by the Borrower
within three (3)
-8-
9
Business Days after the making of the requested Revolving Loan. In
addition, the Borrower hereby irrevocably authorizes the Lender at any
time and from time to time, without further request from or notice to
the Borrower, to make advances under the Revolving Loan, and to
establish, without duplication, reserves against the Borrowing Base,
which the Lender, in its reasonable discretion, deems necessary to
cover debit balances in the Revolving Loan Account, principal of,
and/or interest on, any Loan, any of the Obligations, and/or
Enforcement Costs, prior to, on, or after the termination of other
advances under this Agreement, regardless of whether the outstanding
principal amount of the Revolving Loan which the Lender may make
hereunder exceeds the Revolving Credit Committed Amount or the
Borrowing Base.
7. Section 2.1.6 (Early Termination Fee) of the Financing Agreement is
hereby deleted in its entirety without renumbering. References in the Financing
Agreement to the "Early Termination Fee" shall be of no further force or effect.
8. The following are hereby added as new subsections to Section 2.1 of
the Financing Agreement:
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) eighty five
percent (85%) of the amount of Eligible Receivables, PLUS (b) the
lesser of $1,000,000 or twenty percent (20%) of the amount of Eligible
Inventory, PLUS (c) eighty percent (80%) of the orderly liquidation
value of Equipment; PLUS (d) one hundred percent (100%) of the forced
liquidation value of the Mortgaged Property; PLUS (e) the lesser of
$5,000,000 or twenty-five percent (25%) of the fair market value of the
United States Patents subject to the duly recorded Assignment of
Patents; MINUS (f) $150,000 times the number of the Borrower's fiscal
quarters ending after September 30, 1999 and on or prior to the date of
the computation of the Borrowing Base. The values described in clauses
(c), (d) and (e) (the appraisal required by clause (e) having not yet
been made) 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 Lenders and shall be
subject to internal review by the Lender. At the time of any sale,
other disposition or addition of Equipment with a fair market of
$100,000 or more that changes the value used in computing clause (c)
above, the Borrower shall so notify the Lender, identify the applicable
Equipment and the orderly 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 (f) 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
-9-
10
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.
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 MONTHLY (i) as of the last day of October, November and December,
1999 and (ii) as of the last day of each other month during which any
amount shall be outstanding under the Revolving Loans in excess of that
permitted under the aggregate of clauses (c), (d), and (e) of the
definition of "Borrowing Base," and, otherwise, no less frequently than
QUARTERLY, and (y) at the time of requesting an advance under the
Revolving Loans in excess of that permitted under the aggregate of
clauses (c), (d), and (e) of the definition of "Borrowing Base" if no
Borrowing Base Report has been furnished as of the end of the month
preceding the month in which the advance is requested, and (z) 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) 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
-10-
11
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.
2.1.9 MANDATORY PREPAYMENTS OF REVOLVING LOAN.
The Borrower shall make the mandatory prepayments
(each a "Revolving Loan Mandatory Prepayment" and collectively, the
"Revolving Loan Mandatory Prepayments") of the Revolving Loan at any
time and from time to time in such amounts requested by the Lender
pursuant to Section 2.1.7 (Borrowing Base) of this Agreement in order
to cover any Borrowing Base Deficiency.
9. Section 2.2.1 of the Financing Agreement is hereby deleted in its
entirety, and the following is substituted in its place:
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 Five Million Dollars ($5,000,000).
10. Section 2.2.2 of the Financing Agreement is hereby deleted in its
entirety, and the following is substituted in its place:
2.2.2 LETTER OF CREDIT FEES. At the opening of each
Letter of Credit, there shall be due from the Borrower to the Lender, a
letter of credit fee (each a "Letter of Credit Fee" and collectively
the "Letter of Credit Fees") in an amount equal to 200 basis points per
annum of the amount of the Letter of Credit, based on a term beginning
with the date of issuance and ending on the expiration date of the
Letter of Credit. Such Letter of Credit Fees shall be paid quarterly,
in arrears, on the last day of each March, June, September and
December. In addition, the Borrower shall pay to the Lender any and all
additional issuance, negotiation, processing, transfer or other fees to
the extent and as and when required by the provisions of any Letter of
Credit Agreement, which shall be no greater than the fees therefor
customarily charged by the Lender; such additional fees are included in
and a part of the "Fees" payable by the Borrower under the provisions
of this Agreement.
-11-
12
11. Section 2.3.1(c) of the Financing Agreement is hereby deleted in
its entirety, and the following is substituted in its place:
(c) The Applicable Margin for (i) LIBOR Loans shall
be 250 basis points per annum, and (ii) Base Rate Loans shall be 50
basis points per annum.
12. Section 2.3.5 of the Financing Agreement is hereby deleted in its
entirety, and the following is substituted in its place:
2.3.5 PAYMENT OF INTEREST.
(a) Unpaid and accrued interest on any advance of the
Revolving Loan which consists of a Base Rate Loan shall be paid
monthly, in arrears, on the first day of each calendar month,
commencing on the first such date after the date of this Agreement, and
on the first day of each calendar month thereafter, and at maturity
(whether by acceleration, declaration, extension or otherwise).
(b) Unpaid and accrued interest on any LIBOR Loan
shall be paid (i) monthly, in arrears, on the first day of each
calendar month, commencing October 1, 1999, and (ii) on the last
Business Day of each Interest Period for such LIBOR Loan and at
maturity (whether by acceleration, declaration, extension or
otherwise); provided, however that any and all unpaid and accrued
interest on any LIBOR Loan prepaid prior to expiration of the then
current Interest Period for such LIBOR Loan shall be paid immediately
upon prepayment.
13. The following is hereby added to the Financing Agreement as new
Section 4.1.25:
4.1.25 COMPLIANCE WITH ELIGIBILITY STANDARDS.
To the best of the Borrower's knowledge, each
Account, all Inventory and all other property components included in
the calculation of the Borrowing Base meet and comply with all of the
standards for Eligible Receivables, Eligible Inventory and such other
components. With respect to those Accounts which the Lender has deemed
Eligible Receivables to the best of the Borrower's knowledge, (a) there
are no facts, events or occurrences which in any way impair the
validity, collectibility or enforceability thereof or tend to reduce
the amount payable thereunder; and (b) there are no proceedings or
actions known to the Borrower which are threatened or pending against
any Account Debtor which might result in any material adverse change in
the Borrowing Base.
14. The following is hereby added to the Financing Agreement as new
Section 5.2.5:
5.2.5 BORROWING BASE.
The Borrower shall have furnished all Borrowing Base
Reports required by Section 2.1.8 (Borrowing Base Report), there shall
exist no Borrowing Base Deficiency, and as evidence thereof, the
Borrower shall have furnished to the Lender such reports, schedules,
certificates, records and other
-12-
13
papers as may be reasonably requested by the Lender, and the Borrower
shall be in compliance with the provisions of Section 2.1.8 (Borrowing
Base Report) both immediately before and immediately after the making
of the advance requested.
15. Subsections (c) and (d) of Section 6.1.1 of the Financing Agreement
are hereby deleted in its entirety, and the following is substituted in their
place:
(c) MONTHLY STATEMENTS AND CERTIFICATES. The Borrower
shall furnish to the Lender as soon as available, but in no event more
than forty-five (45) days after the end of each month that is also the
end of a fiscal quarter and not more than thirty (30) days after the
end of each other month, a financial statement in reasonable detail
satisfactory to the Lender relating to the Borrower and its
Subsidiaries, prepared in accordance with GAAP, which financial
statement shall include a consolidated balance sheet of the Borrower
and its Subsidiaries, as of the end of such month and consolidated
statements of income, cash flows and changes in shareholders equity of
the Borrower and its Subsidiaries for such month, and (ii) a Compliance
Certificate, in substantially the form attached to this Agreement as
EXHIBIT C, containing a detailed computation of each financial covenant
which is tested at the end of the period reported and a certification
that no material change has occurred to the information contained in
the Collateral Disclosure List (except as set forth on any schedule
attached to the certification), all as prepared and certified by a
Responsible Officer of the Borrower and accompanied by a certificate of
that officer stating whether any event has occurred which constitutes a
Default or an Event of Default hereunder, and, if so, stating the facts
with respect thereto.
(d) OTHER MONTHLY REPORTS. The Borrower shall furnish
to the Lender within thirty (30) days after the end of each month, a
report containing the following information:
(i) a summary aging schedule of all Receivables by
Account Debtor, and accompanied by such supporting information
as the Lender may from time to time reasonably request;
(ii) a summary aging of all accounts payable;
(iii) a listing of all Inventory by component and
category, in such detail, and accompanied by such supporting
information as the Lender may from time to time reasonably
request; and
(iv) such other information as the Lender may
reasonably request.
16. Section 6.1.15 of the Financing Agreement is hereby deleted in its
entirety, and the following is substituted in its place:
6.1.15 FINANCIAL COVENANTS.
-13-
14
(a) FIXED CHARGE COVERAGE RATIO. The Borrower will
maintain, tested for each four (4) quarter period ending as of the last
day of each of the Borrower's fiscal quarters commencing June 30, 1999,
a Fixed Charge Coverage Ratio of not less than the following:
- -------------------------------------------------------------------------------
Period Ending Ratio
- -------------------------------------------------------------------------------
June 30, 1999 0.82 to 1.0
- -------------------------------------------------------------------------------
September 30, 1999 0.55 to 1.0
- -------------------------------------------------------------------------------
December 31, 1999 0.53 to 1.0
- -------------------------------------------------------------------------------
March 31, 2000 0.62 to 1.0
- -------------------------------------------------------------------------------
June 30, 2000 0.81 to 1.0
- -------------------------------------------------------------------------------
September 30, 2000 and thereafter 1.00 to 1.0
- -------------------------------------------------------------------------------
(b) SENIOR LIABILITIES TO TANGIBLE CAPITAL FUNDS. The
Borrower will maintain, tested as of the last day of each of the
Borrower's fiscal quarters commencing June 30, 1999, a ratio of Senior
Liabilities to Tangible Capital Funds of not more than the following:
- -------------------------------------------------------------------------------
Period Ending Ratio
- -------------------------------------------------------------------------------
June 30, 1999 1.70 to 1.0
- -------------------------------------------------------------------------------
September 30, 1999 1.60 to 1.0
- -------------------------------------------------------------------------------
December 31, 1999 2.24 to 1.0
- -------------------------------------------------------------------------------
March 31 and June 30, 2000 2.00 to 1.0
- -------------------------------------------------------------------------------
September 30 and December 31, 2000; 1.90 to 1.0
March 31 and June 30, 2001
- -------------------------------------------------------------------------------
September 30, 2001 and thereafter 1.35 to 1.0
- -------------------------------------------------------------------------------
17. Notwithstanding any other provision of this Agreement, the Borrower
acknowledges and agrees that the Lender shall have no obligation at any time to
include in the Borrowing Base any Patents unless and until the Assignment of
Patents has been recorded.
18. 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.
19. 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
-14-
15
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, NATIONAL ASSOCIATION, formerly
"NationsBank, N.A."
/s/ Cherilyn Sauers By: /s/ Melba B. Quizon (SEAL)
- ------------------------------ -----------------------------------
Name: Melba B. Quizon
Title Vice President
WITNESS: GLASSTECH, INC.
/s/ Kenneth H. Wetmore By: /s/ Diane S. Tymiak (SEAL)
- ------------------------------ -----------------------------------
Name: Diane S.Tymiak
Title: Vice President,
Treasurer and Chief
Financial Officer
-15-
16
Schedule 1.1
The Account Debtors referred to in the clauses (h), (i) and (o) of the
definition of "Eligible Receivables" are:
Asahi Glass Group
Central Glass Group
Compaigne de Saint-Gobain Group
DaimlerChrysler Group
Ford Motor Company Group
*Guardian Glass Group
*Hankuk Glass Group
*Keumkang Chemical Group
Nippon Sheet Glass Group
PPG Industries Group
Pilkington Group
provided, however, that an Account Debtor with an "*" by its name shall not
qualify for the exceptions under clauses (h), (i) and (o) of the definition of
"Eligible Receivables" until the Lender completes its due diligence for that
Account Debtor.
-16-
17
EXHIBIT C
COMPLIANCE CERTIFICATE
----------------------
(QUARTER END AND YEAR END)
THIS CERTIFICATE is made as of __________________, _________, by
GLASSTECH, INC., a corporation organized under the laws of Delaware (the
"Borrower"), BANK OF AMERICA, NATIONAL ASSOCIATION, a national banking
association (the "Lender"), formerly "NationsBank, N.A.," pursuant to Section
6.1.1(c) of the Financing and Security Agreement dated October 29, 1997, (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) Third Amendment
to Financing and Security Agreement dated June 29, 1999, and as amended,
modified, restated, substituted, extended and renewed at any time and from time
to time, the "Financing Agreement") by and between the Borrower and the Lender.
I, ____________________, hereby certify that I am the ______________ of
the Borrower and am a Responsible Officer (as that term is defined in the
Financing Agreement) authorized to certify to the Lender on behalf the Borrower
as follows:
1. This Certificate is given to induce the Lender to make advances to
the Borrower under the Financing Agreement.
2. This Certificate accompanies the _____________ financial statements
for the period ended ___________________, ____ (the "Current Financials") which
the Borrower is furnishing to the Lender pursuant to Section 6.1.1(__) of the
Financing Agreement. The Current Financials have been prepared in accordance
with GAAP (as that term is defined in the Financing Agreement).
3. As required by Section 6.1.1(__) of the Financing Agreement, I have
set forth on Schedule 1 a detailed computation of each financial covenant in
Financing Agreement.
4. No change has occurred to the information contained in the
Collateral Disclosure List except as set forth on Schedule 2 to this
Certificate. By way of example and not limitation, the Collateral Disclosure
List, together with Schedule 2, contains a listing of all of the Borrower's
Patents, Trademarks, Copyrights (as those terms are defined in the Financing
Agreement), all locations (owned, leased, warehouses or otherwise) where any
Collateral (as that term is defined in the Financing Agreement) is located, all
Subsidiaries (as that term is defined in the Financing Agreement).
5. As of the date hereof, there exists no Default or Event of Default,
as defined in the Article 7 of the Financing Agreement, nor any event which,
upon notice or the lapse of time, or both, would constitute such an Event of
Default.
6. On the date hereof, the representations and warranties contained in
Article 4 of the Financing Agreement are true with the same effect as though
such representations and warranties had been made on the date hereof, except
that the representations and warranties which relate to
-17-
18
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.
WITNESS my signature this _____ day of ____________, _______.
------------------------------
Name:
Title:
-18-
19
EXHIBIT C
COMPLIANCE CERTIFICATE
(MONTHLY)
THIS CERTIFICATE is made as of __________________, _________, by
GLASSTECH, INC., a corporation organized under the laws of Delaware (the
"Borrower"), BANK OF AMERICA, NATIONAL ASSOCIATION, a national banking
association (the "Lender"), formerly "NationsBank, N.A.," pursuant to Section
6.1.1(c) of the Financing and Security Agreement dated October 29, 1997, (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) Third Amendment
to Financing and Security Agreement dated June 29, 1999, and as amended,
modified, restated, substituted, extended and renewed at any time and from time
to time, the "Financing Agreement") by and between the Borrower and the Lender.
I, ____________________, hereby certify that I am the ______________ of
the Borrower and am a Responsible Officer (as that term is defined in the
Financing Agreement) authorized to certify to the Lender on behalf the Borrower
as follows:
1. This Certificate is given to induce the Lender to make advances to
the Borrower under the Financing Agreement.
2. This Certificate accompanies the monthly financial statements for
the period ended ___________________, ____ (the "Current Financials") which the
Borrower is furnishing to the Lender pursuant to Section 6.1.1(c) of the
Financing Agreement. The Current Financials have been prepared in accordance
with GAAP (as that term is defined in the Financing Agreement).
3. No material change has occurred to the information contained in the
Collateral Disclosure List except as set forth on Schedule 2 to this
Certificate.
4. As of the date hereof, there exists no Default or Event of Default,
as defined in the Article 7 of the Financing Agreement, nor any event which,
upon notice or the lapse of time, or both, would constitute such an Event of
Default.
5. On the date hereof, the representations and warranties contained in
Article 4 of the Financing Agreement are true with the same effect as though
such representations and warranties had been made on the date hereof, 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.
-19-
20
WITNESS my signature this _____ day of ____________, _______.
------------------------------
Name:
Title:
-20-