Exhibit 10.23
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT NO. 2 to Credit Agreement (this "Amendment") entered into as of
May __, 2002 among GENERAL BEARING CORPORATION (the "Borrower"), the Lenders
party hereto and KEYBANK NATIONAL ASSOCIATION, as Administrative Agent (the
"Administrative Agent").
WHEREAS, the Borrower, the Lenders and the Administrative Agent are
parties to the Credit Agreement dated as of December 20, 1999 (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"); and
WHEREAS, the obligations of the Borrower under the Credit Agreement are
guaranteed by the Subsidiaries of the Borrower party to the Guarantee and
Collateral Agreement dated as of December 20, 1999 (the "Guarantee Agreement")
between the Subsidiary Guarantors and the Administrative Agent; and
WHEREAS, the Borrower has requested that the Lenders and the
Administrative Agent amend certain provisions of the Credit Agreement, and the
Lenders and the Administrative Agent have agreed to make such amendments subject
to the terms and conditions set forth herein; and
WHEREAS, terms not otherwise defined herein shall have the respective
meanings ascribed thereto in the Credit Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
(1) Amendments to Credit Agreement.
(a) Section 7.1 of the Credit Agreement is hereby deleted in
its entirety and the following substituted therefore:
SECTION 7.1 Financial Condition Covenants.
(a) Consolidated Funded Debt Ratio. The Borrower shall not permit
the Consolidated Funded Debt Ratio as of the last day of any Fiscal
Quarter (commencing with the Fiscal Quarter ending on or closest to
December 31, 2000) occurring during any period set forth below to be
greater than the ratio set forth opposite such period:
Consolidated
Period Funded Debt Ratio
------ -----------------
The Fiscal Quarter beginning on or closest to January 3.50 to 1
1, 2000 through (and including) the Fiscal Quarter
ending on or closest to December 31, 2000
The Fiscal Quarter beginning on or closest to January 2.75 to 1
1, 2001 through (and including) the Fiscal Quarter
ending on or closest to September 30, 2001
The Fiscal Quarter beginning on or closest to October 4.25 to 1
1, 2001 through (and including) the Fiscal Quarter
ending on or closest to September 30, 2002
The Fiscal Quarter beginning on or closest to October 4.00 to 1
1, 2002 and thereafter
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provided, however, in determining the Consolidated Funded Debt Ratio for
each Fiscal Quarter commencing with the Fiscal Quarter beginning on or
closest to October 1, 2001, "Consolidated Funded Debt" and "Consolidated
EBITDA" (including, without limitation, "Consolidated Net Income") shall
be calculated solely in respect of the Borrower on a non-consolidated
basis.
(b) Consolidated Fixed Charge Coverage Ratio. The Borrower shall not
permit the Consolidated Fixed Charge Coverage Ratio as of the last day of
any Fiscal Quarter (commencing with the Fiscal Quarter ending on or
closest to December 31, 2000) occurring during any period set forth below
to be less than the ratio set forth below opposite such period:
Consolidated Fixed
Period Charge Coverage Ratio
------ ---------------------
The Fiscal Quarter beginning on or closest to January 1.50 to 1
1, 2000 through (and including) the Fiscal Quarter
ending on or closest to September 30, 2001
The Fiscal Quarter beginning on or closest to October 1.20 to 1
1, 2001 and thereafter
provided, however, in determining the Consolidated Fixed Charge Coverage
Ratio for each Fiscal Quarter commencing with the Fiscal Quarter beginning
on or closest to October 1, 2001, "Consolidated EBITDA" (including,
without limitation, "Consolidated Net Income") and "Consolidated Fixed
Charges" (including, without limitation, "Consolidated Interest Expense")
shall be calculated solely in respect of the Borrower on a
non-consolidated basis.
(b) Consolidated Interest Coverage Ratio. The Borrower shall not
permit the Consolidated Interest Coverage Ratio as of the last day of any
Fiscal Quarter (commencing with the Fiscal Quarter ending on or closest to
December 31, 2000) occurring during any period set forth below to be less
than the ratio set forth below opposite such period:
Consolidated Interest
Period Coverage Ratio
------ --------------
The Fiscal Quarter beginning on or closest to January 3.50 to 1
1, 2000 through (and including) the Fiscal Quarter
ending on or closest to September 30, 2001
The Fiscal Quarter beginning on or closest to October 2.00 to 1
1, 2001 and thereafter
provided, however, in determining the Consolidated Interest Coverage Ratio
for each Fiscal Quarter commencing with the Fiscal Quarter beginning on or
closest to October 1, 2001, "Consolidated EBIT" (including, without
limitation, "Consolidated Net Income") and "Consolidated Interest Expense"
shall be calculated solely in respect of the Borrower on a
non-consolidated basis.
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(b) All references to "this Agreement" in the Credit
Agreement and to "the Credit Agreement" in the other
Loan Documents shall be deemed to refer to the Credit
Agreement as amended by this Amendment.
(2) Effectiveness of Amendment.
(a) The effectiveness of this Amendment is subject to the
satisfaction of the following conditions:
(i) The Administrative Agent shall have received a
counterpart of this Amendment executed by the
Borrower.
(ii) The Administrative Agent shall have received
counterparts of the Consent and Acknowledgment of
Subsidiary Guarantors annexed hereto by each of
the Subsidiary Guarantors.
(b) This Amendment shall become effective as of May __, 2002
(the "Amendment No. 2 Effective Date") when the
conditions set forth in Section 2(a) hereof have been
satisfied.
(3) Acknowledgments and Confirmations. The Borrower and each
Subsidiary Guarantor acknowledges and confirms that the Liens
granted pursuant to the Loan Documents secure, without
limitation, the Indebtedness, liabilities and obligations of
the Borrower to the Administrative Agent and the Lenders under
this Amendment, whether or not so stated in the Loan
Documents, and that the term "Obligations" as used in the Loan
Documents (or any other term used therein to refer to the
Indebtedness, liabilities and obligations of the Borrower to
the Administrative Agent or any of the Lenders) includes,
without limitation, the Indebtedness, liabilities and
obligations to the Administrative Agent and the Lenders under
the Credit Agreement as amended by this Amendment.
(4) Representations and Warranties. The Borrower hereby represents
and warrants to the Administrative Agent and the Lenders that:
(a) The representations and warranties set forth in the Loan
Documents (other than the representations and warranties
made as of a specific date) are true and correct in all
material respects as of the date hereof and with the
same effect as though made on and as of the date hereof,
except for such matters as are set forth in a
certificate of an Authorized Officer of the Borrower to
be delivered to the Administrative Agent within 60 days
after the Amendment No. 2 Effective Date; provided that
none of the matters set forth in such certificate shall
disclose any material adverse fact or condition
concerning the business, assets, operations or financial
condition of the Borrower and its Subsidiaries occurring
since the date of the Credit Agreement not disclosed to
the Administrative Agent in writing prior to the
Amendment No. 2 Effective Date.
(b) No Default or Event of Default and no event or condition
which, with the giving of notice or lapse of time or
both, would constitute such a Default or Event of
Default, now exists or would exist.
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(c) (i) The execution, delivery and performance by the
Borrower of this Amendment is within its organizational
powers and have been duly authorized by all necessary
action (corporate or otherwise) on the part of the
Borrower, (ii) this Amendment is the legal, valid and
binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, and (iii)
neither this Amendment nor the execution, delivery and
performance by the Borrower hereof: (A) contravenes the
terms of the Borrower's organization documents, (B)
conflicts with or results in any breach or contravention
of, or the creation of any Lien under, any document
evidencing any contractual obligation to which the
Borrower is a party or any order, injunction, writ or
decree to which the Borrower or its property is subject,
or (C) violates any requirement of law.
(5) Effect; No Waiver. Except as specifically set forth herein,
the Credit Agreement and the other Loan Documents shall remain
in full force and effect in accordance with their terms and
are hereby ratified and confirmed. The execution, delivery and
effectiveness of this Amendment shall not operate as a waiver
of any right, power or remedy of the Administrative Agent or
the Lenders under the Credit Agreement, nor constitute a
waiver of any provision of the Credit Agreement, except as
specifically set forth herein.
(6) Miscellaneous.
(a) The Borrower shall pay the Administrative Agent upon
demand for all reasonable expenses, including reasonable
attorneys' fees and expenses of the Administrative
Agent, incurred by the Administrative Agent in
connection with the preparation, negotiation and
execution of this Amendment.
(b) THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(c) This Amendment shall be binding upon the Borrower, the
Administrative Agent and the Lenders and their
respective successors and assigns, and shall inure to
the benefit of the Borrower, the Administrative Agent
and the Lenders and the respective successors and
assigns of the Administrative Agent and the Lenders.
(d) This Amendment (and the Consent and Acknowledgment of
Subsidiary Guarantors annexed hereto) may be executed in
any number of counterparts and by different parties
hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original
and all of which taken together shall constitute one and
the same instrument.
[The remainder of this page intentionally has been left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective duly authorized officers on the date
first above written.
GENERAL BEARING CORPORATION
By: ______________________________________
Name:
Title:
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent, Issuer and Lender
By: ______________________________________
Name:
Title:
CONSENT AND ACKNOWLEDGMENT
OF SUBSIDIARY GUARANTORS
Each of the undersigned Subsidiary Guarantors hereby (1) consents to the
execution and delivery by the Borrower of the foregoing Amendment; (2) agrees
that the definition of "Obligations" (and any other term referring to the
indebtedness, liabilities and obligations of the Borrower to the Administrative
Agent or any of the Lenders) in the Guarantee Agreement and the other Loan
Documents shall include the Indebtedness of the Borrower under the Amendment;
(3) agrees that the definition of "Credit Agreement" in the Guarantee Agreement
and the other Loan Documents to which it is a party is hereby amended to mean
the Credit Agreement as amended by the foregoing Amendment; (4) reaffirms its
continuing liability under its Guarantee Agreement (as modified hereby); and (5)
confirms and agrees that it is a Subsidiary Guarantor party to the Guarantee
Agreement and that the Guarantee Agreement and the other Loan Documents to which
it is a party are, and shall continue to be, in full force and effect in
accordance with their respective terms.
WORLD MACHINERY COMPANY
By: ___________________________________
Name:
Title:
WMW MACHINERY COMPANY, INC.
By: ___________________________________
Name:
Title:
CHINA BEARING CENTER, INC.
By: ___________________________________
Name:
Title:
NN GENERAL, LLC
By: ___________________________________
Name:
Title:
