1
Exhibit 4
SECOND AMENDMENT AND WAIVER
SECOND AMENDMENT AND WAIVER, dated as of June 28, 2000 (this
"AMENDMENT"), to the Credit Agreement, dated as of June 30, 1999 (as amended,
supplemented or otherwise modified prior to the date hereof, the "EXISTING
CREDIT AGREEMENT", as amended hereby, the "CREDIT AGREEMENT"), among GENESIS
WORLDWIDE, INC., formerly THE MONARCH MACHINE TOOL COMPANY, an Ohio corporation
(the "BORROWER"), the several lenders from time to time parties thereto (the
"LENDERS") and ING (U.S.) CAPITAL LLC, as Administrative Agent (in such
capacity, the "ADMINISTRATIVE AGENT") for the Lenders.
RECITALS
The Borrower has requested that the Administrative Agent and
the Lenders amend and waive certain provisions of the Existing Credit Agreement
as set forth in this Amendment to provide for, among other things, a temporary
increase in the aggregate Revolving Credit Commitment. The Administrative Agent
and the Lenders parties hereto are willing to agree to such amendments and
waivers, but only on the terms and subject to the conditions set forth in this
Amendment.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower, the Administrative Agent and the Lenders hereby
agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein defined.
2. AMENDMENTS. The Existing Credit Agreement is hereby amended
as follows:
(a) The Recitals are hereby amended by deleting the
reference to "$30,000,000" from clause (c) thereof and substituting in
lieu thereof "$35,000,000".
(b) Section 1.1 is hereby amended by deleting the
following definitions and substituting the new definitions to read in
its entirety as follows:
"APPLICABLE MARGIN": (a) for any Tranche A Term Loan
or any Revolving Credit Loan of any Type, during the period
commencing on the Closing Date and ending on the date which is
six months following the Closing Date, the rate per annum set
forth under the relevant column heading below:
------------------------------- ----------------------------
Base Rate Loans Eurodollar Loans
------------------------------- ----------------------------
1.75% 2.75%
------------------------------- ----------------------------
(b) for any Tranche A Term Loan or Revolving Credit
Loan of any Type (other than a Temporary Increase Loan), at
any time following the date
Exhibit 4
2
which is six months following the Closing Date on which the
Leverage Ratio, as most recently determined as of the date the
certificate containing such Leverage Ratio is delivered
pursuant to Section 8.2(b), is within any of the ranges set
forth below, the rate per annum set forth under the relevant
column heading opposite the applicable range below:
------------------------- ----------------------------- ----------------------------
Leverage Ratio Base Rate Loans Eurodollar Loans
------------------------- ----------------------------- ----------------------------
Greater than or equal 2.500% 3.500%
to 4.5
------------------------- ----------------------------- ----------------------------
Less than 4.5 but 2.125% 3.125%
greater than or equal
to 4.0
------------------------- ----------------------------- ----------------------------
Less than 4.0 but 1.750% 2.750%
greater than or equal
3.5
------------------------- ----------------------------- ----------------------------
Less than 3.5 but 1.375% 2.375%
greater than or equal
to 3.0
------------------------- ----------------------------- ----------------------------
Less than 3.0 but 1.000% 2.000%
greater than or equal
to 2.5
------------------------- ----------------------------- ----------------------------
Less than 2.5 0.625% 1.625%
------------------------- ----------------------------- ----------------------------
PROVIDED, that in the event that the certificate containing
the determination of the Leverage Ratio is not delivered on
the date specified and otherwise in accordance with to Section
8.2(b) hereof, the applicable margin shall be the highest rate
per annum for such Type of Loan set forth above from the date
on which such certificate was required to be delivered in
accordance with Section 8.2(b) until such time as such
certificate is delivered to the Lenders;
(c) for any Revolving Credit Loan that is a Temporary
Increase Loan (which shall be made and maintained only as Base
Rate Loans), two percent (2%); and
(d) for any Tranche B Term Loan of any Type, the rate
per annum set forth under the relevant column heading below:
------------------------------- ---------------------------
Base Rate Loans Eurodollar Loans
------------------------------- ---------------------------
2.25% 3.50%
------------------------------- ---------------------------
Exhibit 4
-2-
3
"CONSOLIDATED INTEREST EXPENSE": for any period, the
amount which, in conformity with GAAP, would be set forth
opposite the caption "interest expense" or any like caption
(including without limitation, imputed interest included in
payments under Financing Leases) on a consolidated income
statement of the Borrower and the Subsidiaries for such period
excluding (i) the amortization of any original issue discount,
(ii) the amount of any interest on the Three Cities
Subordinated Debt to the extent the payment of such interest
has been deferred and not paid in cash although such interest
has become then due and payable, or (iii) any non-cash
interest expense attributable to stock warrants.
"LOAN DOCUMENTS": this Agreement, the Notes, the
Guarantee, the Security Documents, the Fee Letter and the
Warrant.
"REVOLVING CREDIT COMMITMENT": as to any Lender, the
obligation of such Lender to make Revolving Credit Loans to
the Borrower pursuant to Section 3.1 and/or to issue or
participate in Letters of Credit issued on behalf of the
Borrower hereunder in an aggregate principal amount at any one
time outstanding not to exceed $30,000,000, as set forth
opposite such Lender's name on Schedule 1.1 under the caption
"Revolving Credit Commitment" or in an Assignment and
Acceptance, as such amount may be reduced from time to time in
accordance with the provisions of this Agreement.
Notwithstanding the preceding sentence or any other provision
of the Existing Credit Agreement to the contrary, during the
Temporary Increase Commitment Period, the Revolving Credit
Commitment shall be increased to an aggregate principal amount
of $35,000,000, as set forth on Schedule 1.1. At the end of
the Temporary Increase Commitment Period, the Revolving Credit
Commitment shall be reduced to $30,000,000, less the amount of
any permanent reductions of the Revolving Credit Commitments
that occurred during the Temporary Increase Commitment Period.
(c) Section 1.1 is hereby further amended by adding
the following definitions:
"TEMPORARY INCREASE COMMITMENT PERIOD": the period
from June 28, 2000 to and including October 31, 2000.
"TEMPORARY INCREASE LOAN": Any Revolving Credit Loans
outstanding during the Temporary Increase Commitment Period to
the extent that the aggregate principal amount of the
Revolving Credit Loans exceeds $30,000,000.
"WARRANT": the Warrant, dated as of June 28, 2000, by
the Borrower in favor of ING (U.S.) Capital LLC, as the same
may be amended, supplemented or otherwise modified from time
to time.
(d) Section 5.2 is hereby amended by adding the
following as the new subsection (c):
"(c) Notwithstanding the preceding subsections (a)
and (b), Temporary Increase Loans shall be made and maintained
only as Base Rate Loans."
Exhibit 4
-3-
4
(e) Section 9.1 is hereby amended by deleting such
Section in its entirety and substituting in lieu thereof the following
new Section 9.1 to read in its entirety as follows:
"(a) SENIOR LEVERAGE RATIO. Permit, for any period of
four consecutive fiscal quarters ending during a period set
forth below, the ratio of (i) Consolidated Senior Indebtedness
to (ii) Consolidated EBITDA to be greater than the amount set
forth opposite such period below; PROVIDED, that in
calculating Consolidated EBITDA for the periods of four fiscal
quarters ending September 30, 1999, December 31, 1999 and
March 31, 2000, Consolidated EBITDA for the fiscal quarters
ending December 31, 1998, March 31, 1999, and June 30, 1999
shall be deemed to be $5,250,000, $5,250,000 and $5,250,000,
respectively:
---------------------------------------- ------------------------------
Test Period Ending Ratio
---------------------------------------- ------------------------------
6/30/00 6.75
---------------------------------------- ------------------------------
9/30/00 6.00
---------------------------------------- ------------------------------
12/31/00 5.00
---------------------------------------- ------------------------------
3/31/01 4.00
---------------------------------------- ------------------------------
6/30/01 3.00
---------------------------------------- ------------------------------
9/30/01 3.00
---------------------------------------- ------------------------------
12/31/01 3.00
---------------------------------------- ------------------------------
12/31/02 2.50
---------------------------------------- ------------------------------
12/31/03 2.25
---------------------------------------- ------------------------------
12/31/04 1.75
---------------------------------------- ------------------------------
12/31/05 1.75
---------------------------------------- ------------------------------
12/31/06 1.75
---------------------------------------- ------------------------------
(b) INTEREST COVERAGE. Permit, for any period of four
consecutive fiscal quarters ending during any period set forth
below, or if less than four consecutive fiscal quarters have
elapsed since the Closing Date, such period of one, two or
three consecutive fiscal quarters following the Closing Date
ending during any period set forth below, the ratio of (i)
Consolidated EBITDA for such period to (ii) Consolidated
Interest Expense for such period, to be less than the amount
set forth opposite such period below:
Exhibit 4
-4-
5
---------------------------------------- ------------------------------
Test Period Ending Ratio
---------------------------------------- ------------------------------
6/30/00 1.20
---------------------------------------- ------------------------------
9/30/00 1.35
---------------------------------------- ------------------------------
12/31/00 1.60
---------------------------------------- ------------------------------
3/31/01 2.00
---------------------------------------- ------------------------------
6/30/01 2.50
---------------------------------------- ------------------------------
9/30/01 2.50
---------------------------------------- ------------------------------
12/31/01 2.50
---------------------------------------- ------------------------------
12/31/02 2.75
---------------------------------------- ------------------------------
12/31/03 3.00
---------------------------------------- ------------------------------
12/31/04 3.50
---------------------------------------- ------------------------------
12/31/05 3.75
---------------------------------------- ------------------------------
12/31/06 4.00
---------------------------------------- ------------------------------
(c) Minimum Fixed Charge Coverage. Permit, for any
period of four consecutive fiscal quarters ending during any
period set forth below, or if less than four consecutive
fiscal quarters have elapsed since the Closing Date, such
period of one, two or three consecutive fiscal quarters
following the Closing Date ending during any period set forth
below, the ratio of (i) the sum of (A) Consolidated EBITDA and
(B) Consolidated Lease Expense to (ii) Consolidated Fixed
Charges to be less than the ratio set forth opposite such
period below:
---------------------------------------- ------------------------------
Test Period Ratio
---------------------------------------- ------------------------------
6/30/00 0.65
---------------------------------------- ------------------------------
9/30/00 0.70
---------------------------------------- ------------------------------
12/31/00 0.70
---------------------------------------- ------------------------------
3/31/01 0.80
---------------------------------------- ------------------------------
6/30/01 1.00
---------------------------------------- ------------------------------
9/30/01 1.00
---------------------------------------- ------------------------------
12/31/01 1.00
---------------------------------------- ------------------------------
12/31/02 1.00
---------------------------------------- ------------------------------
12/31/03 1.00
---------------------------------------- ------------------------------
12/31/04 1.00
---------------------------------------- ------------------------------
12/31/05 1.20
---------------------------------------- ------------------------------
12/31/06 1.20
---------------------------------------- ------------------------------
(f) Section 9.7 is hereby amended by deleting such
Section in its entirety and substituting in lieu thereof the following:
"9.7 LIMITATION ON DIVIDENDS. Declare or pay any
dividend (other than dividends payable solely in common stock
of the Borrower) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund
Exhibit 4
-5-
6
for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of
the Borrower or any warrants or options to purchase any such
Capital Stock or make any prepayment, repurchase, redemption
or defeasance in respect of the Three Cities Subordinated Debt
or any Special Subordinated Debt (other than with the proceeds
of Replacement Subordinated Debt and regularly scheduled
payments in accordance with the terms thereof), whether now or
hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in
cash or property or in obligations of the Borrower or any
Subsidiary (such declarations, payments, setting apart,
purchases, redemptions, defeasances, retirements, acquisitions
and distributions being herein called "RESTRICTED PAYMENTS"),
except that the Borrower may make Restricted Payments as
follows:
(a) prepayments, repurchases, redemptions or
defeasances of any Subordinated Debt made with the proceeds of
Replacement Subordinated Debt;
(b) prepayments, repurchases, redemptions or
defeasances of any Special Subordinated Debt made no earlier
than June 30, 2002 (unless paid from proceeds described in
Exhibit 1.2-B(1) of the Precision Acquisition Agreement) in an
amount not to exceed $3,000,000;
(c) purchases of the Capital Stock of the Borrower in
connection with the payment of the option price or taxes in
connection with the exercising of options or the grant of
restricted shares under compensation plans of the Borrower
done in the ordinary course of the Borrower's business and
consistent with past practices of the Borrower; and
(d) purchases of the Capital Stock of the Borrower in
connection with the termination of any pension plans to the
extent permitted by Section 5.5(b)."
(g) Section 10 is hereby amended by (i) adding the
word "or" at the end of clause (m) thereof and (ii) adding a new clause
(n) to read in its entirety as follows:
"(n) The Warrant shall cease, for any reason, prior
to its exercise or surrender by the holder thereof, to be in
full force and effect, or any Loan Party or any shareholder of
any Loan Party shall so assert in writing."
(h) Schedule 1.1 is hereby amended by deleting such
Section in its entirety and substituting in lieu thereof the attached
Schedule 1.1.
3. BORROWER'S BOOKS AND RECORDS. The Borrower shall permit,
and shall fully cooperate with the conduct of an examination of the Borrower's
books and records relating to the balance sheets of the Borrower and its
Subsidiaries (including a review of receivables and inventory and percentage of
completion contract accounting) by consultants satisfactory to the
Administrative Agent, to be conducted at the Borrower's expense.
Exhibit 4
-6-
7
4. EFFECTIVENESS. This Amendment shall become effective upon
the satisfaction of the following conditions precedent:
(a) receipt by the Administrative Agent of evidence
satisfactory to the Administrative Agent that this Amendment has been
executed and delivered by the Borrower, the Required Lenders and each
of the Guarantors;
(b) receipt by the Administrative Agreement of a
Deferral Agreement and Waiver from the holder of the Three Cities
Subordinated Debt, pursuant to which such holder agrees to defer cash
interest and waive any applicable covenant defaults on the Three Cities
Subordinated Debt until October 31, 2000, in form and substance
satisfactory to the Administrative Agent;
(c) receipt by the Administrative Agent of the
Warrant duly executed and delivered by the Borrower, in form and
substance satisfactory to the Administrative Agent;
(d) receipt by the Administrative Agent of a legal
opinion from counsel to the Borrower, in form and substance
satisfactory to the Administrative Agent;
(e) after giving effect to this Amendment, the
representations and warranties contained in the Credit Agreement and
the other Loan Documents will be true and correct in all material
respects; and
(f) after giving effect to this Amendment, no Default
or Event of Default exists under the Credit Agreement and the other
Loan Documents.
5. REPRESENTATIONS AND WARRANTIES. To induce the
Administrative Agent and the Lenders to enter into this Amendment, the Borrower
hereby represents and warrants to the Administrative Agent and the Lenders that,
after giving effect to the amendments and waiver provided for herein, the
representations and warranties contained in the Credit Agreement and the other
Loan Documents will be true and correct in all material respects as if made on
and as of the date hereof and that no Default or Event of Default will have
occurred and be continuing.
6. NO OTHER AMENDMENTS AND WAIVERS. Except as expressly
amended and waived hereby, the Credit Agreement, the Notes and the other Loan
Documents shall remain in full force and effect in accordance with their
respective terms, without any waiver, amendment or modification of any provision
thereof.
7. COUNTERPARTS. This Amendment may be executed by one or more
of the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
8. EXPENSES. The Borrower agrees to pay and reimburse the
Administrative Agent for all of the out-of-pocket costs and expenses incurred by
the Administrative Agent in connection with the preparation, execution and
delivery of this Amendment, including, without limitation, the fees and
disbursements of Cadwalader, Xxxxxxxxxx & Xxxx, counsel to the Administrative
Agent.
Exhibit 4
-7-
8
9. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[SIGNATURE PAGES FOLLOW]
Exhibit 4
-8-
9
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment 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:
---------------------------------------
Name:
Title:
ING (U.S.) CAPITAL LLC, as Administrative
Agent and as Lender
By:
---------------------------------------
Name:
Title:
Exhibit 4
-9-
10
The undersigned guarantors hereby consent and agree to the
foregoing Amendment:
PRECISION INDUSTRIAL CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
XXXX-XXXX INDUSTRIES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
XXXX-XXXX CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
H-V TECHNICAL SERVICES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
H-V ASSET MANAGEMENT, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Exhibit 4
-10-
11
H-V MILL ROLL SERVICES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
H-V EQUIPMENT COMPANY
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
H-V ROLL CENTER, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
MONARCH OHIO, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
"GENCOAT INC. (formerly GFC Corporation)"
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Exhibit 4
-11-
12
GENSYSTEMS INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
SALEM INTERNATIONAL SERVICES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
GENINTERNATIONAL INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
GENSYSTEMS SERVICES INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
WLT CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Exhibit 4
-12-
13
SCHEDULE 1.1
LENDERS, COMMITMENTS AND APPLICABLE LENDING OFFICES
--------------------------------------- -------------------- ------------------ --------------------
Tranche A Tranche B
Lender and Lending Offices Term Loan Term Loan Revolving Credit
Commitment Commitment Commitment
--------------------------------------- -------------------- ------------------ --------------------
ING (U.S.) CAPITAL LLC
Applicable Lending Offices:
Base Rate Loans and Eurodollar
Loans: $50,000,000 $20,000,000 $30,000,000
(during the
00 Xxxx 00xx Xxxxxx Temporary Increase
Xxx Xxxx, Xxx Xxxx 00000 Commitment Period
Attention: Xxxx X. Xxxxxxxx the amount shall
Telephone: 000-000-0000 be $35,000,000).
Telecopy: 000-000-0000
--------------------------------------- -------------------- ------------------ --------------------
--------------------------------------- -------------------- ------------------ --------------------
Total:
$50,000,000 $20,000,000 $30,000,000
=========== =========== ===========
(during the
Temporary Increase
Commitment Period
the total shall be
$35,000,000).
--------------------------------------- -------------------- ------------------ --------------------
Exhibit 4
-13-
