1
Exhibit 10.1
AMENDED AND RESTATED FORBEARANCE AGREEMENT
------------------------------------------
FORBEARANCE AGREEMENT, dated as of December 22, 2000 (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 Forbearance Agreement, dated as of
November 20, 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 period ended September 30, 2000
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 period ended
September 30, 2000 (the "COVENANT DEFAULTS") and (iii) the Borrower anticipates
that it will be unable to make scheduled payments of interest and principal
which are scheduled to be made on or prior to February 15, 2001 (the
"ANTICIPATED 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
2
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 the date hereof and ending
on the earlier of (i) February 15, 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 $26,519,714 plus interest thereon and (iv) in respect of Letters
of Credit in an aggregate outstanding face amount equal to $4,608,832.64
(which amount includes the Letter of Credit No. G74476 (the "SPECIFIED
LETTER OF CREDIT")).
(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.
3
(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 for the period ended
September 30, 2000 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
4
deferred until the Forbearance Termination Date; PROVIDED, that the
provisions of Section 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. For so long as the Specified
Letter of Credit shall remain outstanding and shall not have been fully
released or terminated, the maximum amount of Revolving Credit Commitments
shall be increased to $33,700,000 with the entire amount of such increase
constituting Temporary Increase Loans; PROVIDED, that the amount
of the Revolving Credit Commitment in excess of $32,000,000 may be used
solely to support the Specified Letter of Credit and shall not otherwise be
available for borrowing or extensions of credit. The Borrower acknowledges
that the aggregate Revolving Credit Commitments shall automatically be
reduced to $32,000,000 upon the release or termination of the Specified
Letter of Credit and shall be automatically 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
5
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:
(a) Other than Section 6.2 of the Credit Agreement and as otherwise
set forth in Section 6(b) 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.
(b) 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; and
(b) 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:
(a) be a consent to cure, or waiver of, any Default or Event of
Default;
6
(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.
7
(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.
8
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 X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President & CFO
ING (U.S.) CAPITAL LLC,
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
