EXHIBIT 10.21
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT NO.1 to Credit Agreement (this "Amendment") entered into as of
December 29, 2001 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 waive any violation
of the covenants set forth in Section 7.1 of the Credit Agreement for period
ending on September 29, 2001; 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 1.1 of the Credit Agreement is hereby amended by deleting the
definition of "Consolidated EBIT" in its entirety and substituting the following
therefor:
"Consolidated EBIT" means, for any period, Consolidated Net
Income for such period plus, without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net Income for
such period, the sum of (a) income tax expense, (b) Consolidated Interest
Expense, amortization or writeoff of debt discount and debt issuance costs
and commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (c) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, non-cash losses on sales of
assets outside of the ordinary course of business), and (d) any other
non-cash charges, and minus, to the extent included in the statement of
such Consolidated Net Income for such period, the sum of (i) interest
income, (ii) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on sales
of assets outside of the ordinary course of business) and (iii) any other
non-cash income, all as determined on a consolidated basis.
(b) Section 7.1 of the Credit Agreement is hereby deleted in its entirety
and the following substituted therefor:
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 3.50 to 1
closest to January 1, 2000 through
(and including) the Fiscal Quarter
ending on or closest to December
31, 2000
The Fiscal Quarter beginning on or 2.75 to 1
closest to January 1, 2001 through
(and including) the Fiscal Quarter
ending on or closest to September
30, 2001
The Fiscal Quarter beginning on or 4.25 to 1
closest to October 1, 2001 through
(and including) the Fiscal Quarter
ending on or closest to March 31,
2002
The Fiscal Quarter beginning on or 2.50 to 1
closest to April 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 1.50 to 1
closest to January 1, 2000 through
(and including) the Fiscal Quarter
ending on or closest to September
30, 2001
The Fiscal Quarter beginning on or 1.20 to 1
closest to October 1, 2001 through
(and including) the Fiscal Quarter
ending on or closest to March 31,
2002
The Fiscal Quarter beginning on or 1.50 to 1
closest to April 1, 2002 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
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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 3.50 to 1
closest to January 1, 2000 through
(and including) the Fiscal Quarter
ending on or closest to September
30, 2001
The Fiscal Quarter beginning on or 2.00 to 1
closest to October 1, 2001 through
(and including) the Fiscal Quarter
ending on or closest to March 31,
2002
The Fiscal Quarter beginning on or 3.50 to 1
closest to April 1, 2002 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.
(c) The form of Compliance Certificate is hereby amended by deleting the
definitions of "Consolidated EBIT" and "Consolidated EBITDA" set forth therein
in their entirety and substituting the following therefor:
"Consolidated EBIT" and "Consolidated EBITDA" shall have the
respective meanings assigned thereto in the Credit Agreement.
(d) 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.
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(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 December 29, 2001 (the
"Amendment No. 1 Effective Date") when the conditions set forth in Section 2(a)
hereof have been satisfied.
3. Waiver. The Lender hereby waives the default by the Borrower in
compliance with the covenants set forth in Section 7.1 of the Credit Agreement
for the Fiscal Quarter ending, and as of the last day of the Fiscal Quarter
ended, on or closest to September 30, 2001; provided that the waiver granted in
this Section 3 is limited expressly to the defaults herein described and shall
not be deemed to be a waiver of non-compliance with any other provision of the
Credit Agreement.
4. 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.
5. 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. 1 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.
1 Effective Date.
(b) After giving effect to the waiver set forth in Section 3 hereof,
no Default or Event of Default and no event or condition which, with the giving
of notice or
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lapse of time or both, would constitute such a Default or Event of Default, now
exists or would exist.
(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.
6. 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.
7. 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
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and delivered shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument.
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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: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent, Issuer and Lender
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
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: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
WMW MACHINERY COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Secretary
CHINA BEARING CENTER, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
NN GENERAL, LLC
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: General Manager
