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Exhibit 10.1
SECOND AMENDED AND RESTATED FORBEARANCE AGREEMENT
SECOND AMENDED AND RESTATED FORBEARANCE AGREEMENT, dated as of
February 28, 2001 (this "Forbearance Agreement"), among
(i) GENESIS WORLDWIDE, INC. (formerly THE MONARCH MACHINE TOOL
COMPANY (the "Borrower");
(ii) each of the guarantors which are signatories hereto (each
a "Guarantor", collectively, the "Guarantors");
(iii) ING (U.S.) CAPITAL LLC (in its capacity as
administrative agent for the Lenders referenced below, the
"Administrative Agent"); and
(iv) the lenders party to the Credit Agreement referenced
below (the "Lenders"),
in respect of the Credit Agreement referenced below.
WITNESSETH:
WHEREAS, the Borrower, the Lenders and the Administrative
Agent have entered into that certain Credit Agreement, dated as of June 30, 1999
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement");
WHEREAS, the Guarantors are party to that certain Guarantee,
dated as of June 30, 1999 (as amended, supplemented or otherwise modified from
time to time, the "Guarantee"), in favor of the Administrative Agent for the
benefit of the Lenders;
WHEREAS, the Borrower, the Guarantors, the Lenders and the
Administrative Agent are parties to the Amended and Restated Forbearance
Agreement, dated as of December 22, 2000 (the "Existing Forbearance Agreement");
WHEREAS, (i) certain events and circumstances have occurred
and are continuing that have had a Material Adverse Effect and resulted in a
material adverse change from the financial condition of the Borrower as of
December 31, 1998 (the "MAC"); (ii) certain Defaults and Events of Default exist
under Section 10(c) of the Credit Agreement for the periods ending September 30,
2000 and December 31, 2000, respectively, based upon the failure of the Borrower
to comply with each of the financial covenants contained in Section 9.1 of the
Credit Agreement for the periods ending September 30, 2000 and December 31,
2000, respectively (the "Covenant Defaults") and (iii) the Borrower failed to
make scheduled payments of interest and principal which were due on or after
December 22, 2000 (the "Payment Defaults"; together with the MAC and the
Covenant Defaults, the "Specified Events of Default");
WHEREAS, it is a condition precedent to continued funding of
Revolving Credit Loans pursuant to the Credit Agreement that (i) no event or
circumstance shall have occurred that has had a Material Adverse Effect, (ii)
all representations and warranties made by the
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Borrower and the Guarantors shall be true and correct (including, without
limitation, representations regarding the absence of a material adverse change)
and (iii) no Default or Event Default shall exist, and such conditions precedent
are not satisfied as of the date hereof;
WHEREAS, the Administrative Agent and the Lenders are
unwilling to waive the Specified Events of Default; and
WHEREAS, notwithstanding the foregoing, subject to the terms
and conditions hereof, the Administrative Agent and the Lenders are willing,
during the period (the "Forbearance Period") commencing on February 16, 2001 and
ending on the earlier of (i) April 30, 2001 and (ii) the date on which a
Forbearance Event of Default shall occur (the "Forbearance Termination Date"),
to (A) continue to fund Revolving Credit Loans, subject to the terms and
conditions hereof and (B) forbear in the enforcement of the remedies set forth
in the Loan Documents (as defined in the Credit Agreement) including the
Guarantee as set forth herein and (C) defer payments of principal and interest
scheduled during the Forbearance Period until the Forbearance Termination Date;
provided, that the rights of the Administrative Agent and the Lenders shall not
be otherwise waived or impaired.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants contained herein and for other valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrower, the Guarantors, the
Administrative Agent and the Lenders hereby agree that the Existing Forbearance
Agreement is amended and restated in its entirety as set forth above and as
follows:
1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in the Credit Agreement.
2. Acknowledgments.
(a) Each of the Borrower and each Guarantor
acknowledges and affirms that, as of the date hereof, the Borrower is
indebted to the Lenders (i) in respect of the Tranche A Term Loans and
the Tranche A Term Notes in an aggregate outstanding principal amount
equal to $26,800,000 plus interest thereon, (ii) in respect of the
Tranche B Term Loans and the Tranche B Term Notes in an aggregate
outstanding principal amount equal to $19,750,000 plus interest
thereon, (iii) in respect of the Revolving Credit Loans and the
Revolving Credit Notes in an aggregate outstanding principal amount
equal to $27,600,000 plus interest thereon and (iv) in respect of
Letters of Credit in an aggregate outstanding face amount equal to
$6,030,075.77.
(b) Each of the Borrower and each Guarantor
acknowledges and affirms that, as of the date hereof, (i) there exists
no defense to the repayment by the Borrower of all amounts owing under
the Credit Agreement and (ii) neither the Borrower nor any Guarantor
has any claim against any Lender or the Administrative Agent in respect
of any matter relating to or arising under the Loan Documents or this
Forbearance Agreement and the transactions contemplated thereby or
hereby.
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(c) Each of the Borrower and each Guarantor
acknowledges and reaffirms the effectiveness and continuing validity of
the Credit Agreement, the Guarantee and each other Loan Document to
which it is a party.
(d) Each of the Borrower and each Guarantor
acknowledges that as of the date hereof, the conditions precedent to
the borrowing of Revolving Credit Loans set forth in Section 7.2 of the
Credit Agreement are not satisfied and, but for the effectiveness of
this Forbearance Agreement, the Borrower is not presently entitled to
borrow additional Revolving Credit Loans under the Credit Agreement.
(e) Each of the Borrower and each Guarantor
acknowledges and affirms that the Specified Events of Default have
occurred and that, pursuant to Section 10 of the Credit Agreement, but
for the effectiveness of this Forbearance Agreement, the Administrative
Agent is entitled, with the consent of the Required Lenders, to
terminate the Commitments and to declare the outstanding indebtedness
and the other amounts owing under the Credit Agreement to be due and
payable and to exercise all remedies available under the Loan Documents
and at law.
(f) Each Guarantor acknowledges and consents to this
Forbearance Agreement and to the terms hereof, this Forbearance
Agreement and the terms hereof to be without prejudice to such
Guarantor's liability pursuant to the Guarantee and the other Loan
Documents to which it is a party.
(g) Each of the Borrower and each Guarantor
acknowledges and affirms that it has been advised by its legal counsel
in connection with the negotiation and execution and delivery of this
Forbearance Agreement.
3. Forbearance and Payment Deferral.
(a) Subject to the terms and conditions set forth
herein, none of the Administrative Agent nor any Lender shall exercise
any of the remedies set forth in the Credit Agreement or in any of the
other Loan Documents in respect of the Specified Events of Default
during the Forbearance Period.
(b) Subject to the terms and conditions set forth
herein and after giving effect to Section 5(a) hereof, the
Administrative Agent and the Lenders may, in their sole discretion,
continue to fund Revolving Credit Loans from time to time during the
Forbearance Period in accordance with the terms of the Credit
Agreement, notwithstanding the fact that certain conditions precedent
have not been satisfied relating solely to the existence of the
Specified Events of Default and the occurrence of events or
circumstances which have had a Material Adverse Effect which have been
disclosed to the Administrative Agent on or prior to the date hereof;
provided, that no such funding shall be deemed to be a waiver of the
Specified Events of Default.
(c) Subject to the terms and conditions set forth
herein, the Administrative Agent and the Lenders agree that any
payments of principal or interest which are scheduled to become due and
payable during the Forbearance Period shall be deferred until the
Forbearance Termination Date; provided, that the provisions of Section
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5.1(c) shall apply without regard to any forbearance or deferral of
payments contemplated by this Forbearance Agreement.
4. Termination. This Forbearance Agreement shall terminate on
the Forbearance Termination Date, unless earlier terminated upon the occurrence
of a Forbearance Event of Default (as hereinafter defined).
5. Amendments and Covenants.
(a) The Temporary Increase Commitment Period shall be
extended to terminate on the Forbearance Termination Date. The maximum
amount of Revolving Credit Commitments shall be increased to
$35,500,000 from $30,000,000 with the entire amount of such increase
constituting Temporary Increase Loans. The Borrower acknowledges that
the aggregate Revolving Credit Commitments shall automatically be
reduced to $30,000,000 on the Forbearance Termination Date.
(b) No later than Wednesday of each week, the
Borrower shall deliver to the Administrative Agent an updated 4-week
cash flow forecast, in form and substance satisfactory to the
Administrative Agent, which describes the Borrower's projected cash
flow, liquidity position and borrowing availability under the Revolving
Credit Commitments for such period, which provides a detailed
accounting of accounts receivable and accounts payable aging at such
time and which contains a comparison of actual results for the
immediately preceding calendar week to each of the earlier cash flow
forecasts for such week and describes changes in the current forecast
for each week from previously delivered forecasts for the same week.
(c) The Borrower shall cooperate with the
Administrative Agent and any independent consultant that is hired by
the Administrative Agent or its counsel to evaluate the Borrower's
business and financial condition.
(d) The Borrower shall cooperate with the
Administrative Agent in appointing a "turnaround manager or
consultant", such manager or consultant to be appointed by the Board of
Directors of the Borrower and granted such powers and authority as the
Board of Directors of the Borrower shall designate, in each case after
consultation with and approval by the Administrative Agent.
(e) The Borrower shall cooperate with the
Administrative Agent in exploring potential strategic alternatives in
respect of the Borrower's business and financial condition.
(f) The Borrower shall promptly pay all outstanding
invoices or additional invoices delivered to the Borrower from time to
time for reasonable expenses incurred by the Administrative Agent
(including, without limitation, attorneys' fees and expenses).
6. Representations and Warranties. In order to induce the
Administrative Agent and the Lenders to enter into this Forbearance Agreement,
the Borrower and each Guarantor hereby represents and warrants to the
Administrative Agent and to each Lender that:
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(a) SALEM INTERNATIONAL SERVICES, INC., a Guarantor,
and WLT CORPORATION, a Guarantor, have both been dissolved or otherwise
cease to have corporate existence.
(b) Other than Section 6.2 of the Credit Agreement
and as otherwise set forth in Section 6(c) hereof, each of the
representations and warranties made by the Borrower and each of the
Guarantors in each Loan Document to which it is a party is true and
correct in all material respects as of the date hereof.
(c) Other than the Specified Events of Default, no
Default or Event of Default has occurred and is continuing as of the
date hereof.
7. Conditions Precedent to Effectiveness of Forbearance
Agreement. This Forbearance Agreement shall not become effective unless and
until:
(a) the Administrative Agent has received this
Forbearance Agreement, executed and delivered by a duly authorized
officer of the Borrower, each Guarantor, the Lenders and the
Administrative Agent;
(b) the Administrative Agent has received, in form
and substance satisfactory to the Administrative Agent, evidence that
SALEM INTERNATIONAL SERVICES, INC. and WLT CORPORATION, respectively,
have both been dissolved or otherwise cease to have corporate
existence; and
(c) the Administrative Agent has received such other
documents and information as the Administrative Agent may reasonably
require, which documents and information shall be satisfactory to the
Administrative Agent in its sole discretion.
8. Forbearance Events of Default. The Forbearance Period shall
immediately terminate and the forbearance set forth in Section 3 of this
Forbearance Agreement shall be of no further force and effect upon the
occurrence of any of the following (each, a "Forbearance Event of Default"):
(a) the occurrence of one or more Defaults or Events
of Default under the Credit Agreement (other than a Specified Event of
Default); or
(b) any representation or warranty made or deemed
made by the Borrower or any Guarantor herein or which is contained in
any certificate, document or financial or other statement created
and/or delivered at any time under or in connection with this
Forbearance Agreement or on or subsequent to the date hereof under or
in connection with any other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed
made; or
(c) the Borrower or any Subsidiary shall default in
the observance or performance of any agreement contained herein.
9. Absence of Waiver. The parties hereto agree that the
agreements set forth herein shall not be deemed to:
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(a) be a consent to cure, or waiver of, any Default
or Event of Default;
(b) except as expressly set forth herein, modify or
limit any other term or condition of the Credit Agreement or any other
Loan Document;
(c) impose upon any Lender or the Administrative
Agent any commitment or obligation, express or implied, to consent to
any amendment or further modification of the Credit Agreement or other
Loan Documents;
(d) impose upon any Lender or the Administrative
Agent any commitment or obligation, express or implied, to grant or
extend any financial accommodations to the Borrower or the Guarantors
(other than as expressly set forth herein) or to modify or extend this
Forbearance Agreement; or
(e) prejudice any right or remedy that the
Administrative Agent or the Lenders may now have or may in the future
have under the Credit Agreement or under or in connection with the
other Loan Documents or any instrument or agreement referred to therein
including, without limitation, any right or remedy resulting from any
Default or Event of Default.
10. Release of Claims and Waiver. Each of the Borrower and
each Guarantor hereby releases, remises, acquits and forever discharges each
Lender and the Administrative Agent and each of their employees, agents,
representative, consultants, attorneys, officers, directors, partners,
fiduciaries, predecessors, successors and assigns, subsidiary corporations,
parent corporations and related corporate divisions (collectively, the "Released
Parties"), from any and all actions, causes of action, judgments, executions,
suits, debts, claims, demands, liabilities, obligations, damages and expenses of
any and every character, known or unknown, direct or indirect, at law or in
equity, of whatever nature or kind, whether heretofore or hereafter arising, for
or because of any matter or things done, omitted or suffered to be done by any
of the Released Parties prior to and including the date of execution hereof, and
in any way directly or indirectly arising out of any or in any way connected to
this Agreement or the Loan Documents (collectively, the "Released Matters").
Each of the Borrower and each Guarantor hereby acknowledges that the agreements
in this Section 10 are intended to be in full satisfaction of all or any alleged
injuries or damages arising in connection with the Released Matters. Each of the
Borrower and each Guarantor hereby represents and warrants to the Administrative
Agent and each Lender that it has not purported to transfer, assign or otherwise
convey any right, title or interest of the Borrower or any Guarantor in any
Released Matter to any other Person and that the foregoing constitutes a full
and complete release of all Released Matters.
11. Miscellaneous.
(a) Section headings used in this Forbearance
Agreement are for convenience of reference only and shall not affect
the construction of this Forbearance Agreement.
(b) This Forbearance Agreement may be executed by one
or more of the parties hereto by facsimile or in any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
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(c) This Forbearance Agreement and the rights and
obligations of the parties under this Forbearance Agreement shall be
governed by, and construed and interpreted in accordance with, the law
of the State of New York.
(d) This Forbearance Agreement shall be deemed a
"Loan Document" for purposes of the Credit Agreement and the other Loan
Documents.
(e) This Forbearance Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof
and supersedes all prior and contemporaneous oral or written agreements
with respect to the subject matter hereof.
(f) Time is of the essence in this Forbearance
Agreement.
(g) No amendment or modification of this Forbearance
Agreement shall be effective unless made in writing and signed by all
parties. Each of the Borrower and each of the Guarantors acknowledges
and agrees that any and all future discussions with any Lender or the
Administrative Agent shall be without prejudice to any Lender or the
Administrative Agent and shall not be deemed to modify, waive, or amend
any term or provision of this Forbearance Agreement or the Loan
Documents.
(SIGNATURE PAGES FOLLOW)
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IN WITNESS WHEREOF, the parties hereto have caused this
Forbearance Agreement to be duly executed and delivered as of the day and year
first above written.
GENESIS WORLDWIDE, INC. (formerly THE
MONARCH MACHINE TOOL COMPANY),
as Borrower
By: s/Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Vice President & CFO
ING (U.S.) CAPITAL LLC,
as Administrative Agent and as a Lender
By: s/Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Director
