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EXHIBIT 5.1
FIRST AMENDMENT TO CREDIT AGREEMENT
FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of December 2, 1999 (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 the Administrative Agent and the Lenders to
agree to amend and waive certain provisions of the Existing Credit Agreement as
set forth in this Amendment. 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:
DEFINED TERMS. Unless otherwise defined herein, terms defined in
the Credit Agreement are used herein as therein defined.
AMENDMENTS.
(a) Section 8.2 of the Existing Credit Agreement is hereby amended by
(i) deleting the word "and" at the end of clause (e) thereof, (ii) renumbering
the existing clause (f) to be clause (g), and (iii) adding a new clause (f) to
read in its entirety as follows:
"(f) as soon as available, but in any event not later than 30 days
after the end of each calendar month, a schedule of backlog, bookings and
sales of the Borrower and each of its Subsidiaries for such month, in a
form acceptable to the Administrative Agent; and"
(b) Section 9.1 of the Existing Credit Agreement 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,
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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:
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Test Period Ending Ratio
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9/30/99 4.60
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12/31/99 5.20
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3/31/00 4.70
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6/30/00 4.00
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9/30/00 3.50
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12/31/00 and thereafter 2.50
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(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:
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Test Period Ending Ratio
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9/30/99 1.20
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12/30/99 1.25
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3/31/00 1.40
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6/30/00 1.75
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9/30/00 2.00
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12/31/00 2.75
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3/31/01 2.85
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6/30/01 3.00
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9/30/01 3.10
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12/31/01 3.20
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3/31/02 3.30
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6/30/02 3.40
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9/30/02 and thereafter 3.50
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(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)
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Consolidated EBITDA and (B) Consolidated Lease Expense to (ii)
Consolidated Fixed Charges to be less than the ratio set forth
opposite such period below:
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Test Period Ratio
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9/30/99 0.60
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12/31/99 0.65
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3/31/00 0.70
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6/30/00 0.85
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9/30/00 1.00
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12/31/00 and thereafter 1.25
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(d) MAINTENANCE OF CONSOLIDATED NET WORTH. Permit
Consolidated Net Worth at any time, to be less than the sum
of (i) $44,000,000 less any net losses from the write down of
assets recorded prior to September 30, 2000 relating to the
sale of the machine tool division and (ii) the sum of 75% of
Adjusted Consolidated Net Income for each fiscal quarter
ended prior to such time, commencing with the fiscal quarter
ended September 30, 1999."
(c) Section 10 of the Existing Credit Agreement is hereby amended
by (i) adding the word "or" at the end of clause (l) thereof and (ii) adding a
new clause (m) to read in its entirety as follows:
"(m) (i) the Plan Termination shall not have occurred on or
prior to February 28, 2000, (ii) the net proceeds of the Plan
Termination shall have been less than $9,500,000 or shall not have been
received by the Administrative Agent pursuant to Section 5.5(b)(i)
hereof on or prior to February 28, 2000; or (iii) the Term Loans shall
not have been prepaid with the proceeds of the Plan Termination
together with any other amounts prepaid in an amount not less than
$10,000,000 on or prior to February 28, 2000;
3. WAIVER. Each of the Administrative Agent and the Lenders
hereby waives any Default or Event of Default under the Existing
Credit Agreement as of September 30, 1999 arising solely from the
Borrower's failure to comply with Section 9.1 of the Existing Credit
Agreement as of such date.
4. EFFECTIVENESS. This Amendment shall become effective upon
receipt by the Administrative Agent of evidence satisfactory to the
Administrative Agent that (i) this Amendment has been executed and
delivered by the Borrower, the Required Lenders and each of the
Guarantors and (ii) the Side Letter, dated as of December 2, 1999,
between the Borrower and the Administrative Agent, has been executed
and delivered by the Borrower.
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
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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.
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]
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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: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Vice President & CFO
ING (U.S.) CAPITAL LLC, as Administrative
Agent and as Lender
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Director
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The undersigned guarantors hereby consent and agree to the foregoing
Amendment:
PRECISION INDUSTRIAL CORPORATION
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Vice President & CFO
XXXX-XXXX INDUSTRIES, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Vice President & CFO
GENCOAT INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Treasurer
GENSYSTEMS INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Secretary & Treasurer
SALEM INTERNATIONAL SERVICES, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Vice President, CFO & Treasurer
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GENINTERNATIONAL INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Secretary & Treasurer
GENSYSTEMS SERVICES INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Secretary & Treasurer
WLT CORPORATION
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Vice President, CFO & Treasurer
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