EXECUTION COPY
SECOND AMENDMENT
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SECOND AMENDMENT (this "AMENDMENT"), dated as of August 6,
1998, to the Amended and Restated Credit Agreement, dated as of
March 10, 1998, as amended by the First Amendment, dated as of April
21, 1998 (as the same is being and may be further amended,
supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among PAMECO CORPORATION, a Georgia corporation (the
"COMPANY"), the lenders parties thereto (together with their
respective successors and permitted assigns, the "LENDERS") and
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation, as agent
for the Lenders (in such capacity, together with its successors and
permitted assigns, the "AGENT").
W I T N E S S E T H :
WHEREAS, the Company has requested that the Agent and
the Lenders amend certain provisions of the Credit Agreement upon the
terms and subject to the conditions set forth herein; and
WHEREAS, the Agent and the Lenders have agreed to such
amendments only upon the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants contained herein, the parties hereto hereby agree
as follows:
1. DEFINED TERMS. Terms defined in the Credit
Agreement are used herein with the meanings set forth in the Credit
Agreement unless otherwise defined herein.
2. AMENDMENT OF SECTION 1.1. () Section 1.1 of the
Credit Agreement is hereby amended by deleting therefrom the
definitions of the following defined terms in their respective
entireties and inserting in lieu thereof the following new
definitions:
""AVAILABLE REVOLVING CREDIT COMMITMENT", (a) when the sum
of the aggregate principal amount then outstanding of all Revolving
Credit Loans, Reimbursement Obligations and Swingline Loans is less
than $70,000,000, shall mean, as to any Lender at any time, an amount
equal to the excess, if any, of (i) such Lender's Revolving Credit
Percentage of $70,000,000 over (ii) the sum of (A) the aggregate
principal amount then outstanding of Revolving Credit Loans made by
such Lender and (B) such Lender's Revolving Credit Percentage of the
Reimbursement Obligations and Swingline Loans; (b) from and after the
first date on which the sum of the aggregate principal amount then
outstanding of all Revolving Credit Loans, Reimbursement Obligations
and Swingline Loans is $70,000,000 or greater, shall mean, as to any
Lender at any time, an amount equal to the excess, if any, of (i) such
Lender's Revolving Credit Commitment over (ii) the sum of (A) the
aggregate principal amount then outstanding of Revolving Credit Loans
made by such Lender and (B) such Lender's Revolving Credit Percentage
of the Reimbursement Obligations and Swingline Loans."
""REVOLVING CREDIT TERMINATION DATE" shall mean August 6,
2003 or such earlier date as the Revolving Credit Commitments shall
terminate pursuant to the terms hereof (including, without limitation,
pursuant to Section 11 hereof)."
(b) The definition of "Borrowing Base" in Section 1.1 of
the Credit Agreement is hereby amended by deleting the amount
"50,000,000" where it appears therein and inserting in lieu thereof
the amount "90,000,000."
(c) The definition of "Capital Expenditures" in Section 1.1
of the Credit Agreement is hereby amended by deleting the amount
"$8,000,000" where it appears therein and inserting in lieu thereof
the amount "$9,000,000."
(d) Section 1.1 of the Credit Agreement is hereby amended
by inserting the following new definition in the appropriate
alphabetical order:
""REVOLVING CREDIT COMMITMENT REDUCTION FEE" shall have the
meaning ascribed thereto in Section 6.2 hereof."
3. AMENDMENT OF SECTION 3.1. Section 3.1 of the
Credit Agreement is hereby amended by deleting the amount
"$50,000,000" from paragraph (a) thereof and inserting in lieu thereof
the amount "$90,000,000."
4. AMENDMENT OF SECTION 6.2. Section 6.2 of the
Credit Agreement is hereby amended by deleting the first paragraph
therefrom in its entirety and inserting in lieu thereof the following:
"The Company may, at any time upon at least five Business
Days' prior irrevocable notice to the Agent, prepay all or
part of the Loans then outstanding and cash collateralize any
outstanding Reimbursement Obligations (after giving effect to
any Reimbursement Obligations terminated in a manner acceptable
to the Agent) in accordance with the provisions of subsection
5.1(c) and, simultaneously therewith, terminate the Revolving
Credit Commitments, in whole or in part, which notice shall
specify whether the prepayment is of Eurodollar Loans or
Index Rate Loans, the date of such prepayment, cash
collateralization and Commitment termination. Upon receipt
of such notice, the Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount
specified in such notice and cash collateralization of all
Reimbursement Obligations (or termination of Reimbursement
Obligations) shall be due and payable on the date specified
therein. Upon any termination of the Revolving Credit
Commitments, in whole or in part, on or before August 6, 2000,
the Company agrees to pay to each Lender (including GE Capital)
a fee (the "REVOLVING CREDIT COMMITMENT REDUCTION FEE") in an
amount equal to the product of (i) such Lender's Revolving
Credit Percentage multiplied by the dollar amount of such
terminated Revolving Credit Commitments and (ii) 0.25%. In no
event shall the Company have the right to reduce the Revolving
Credit Commitments, other than in accordance with the provisions
of this subsection 6.2. Amounts prepaid on account of Term
Loans may not be reborrowed. Partial prepayments of Term Loans
shall be in an aggregate principal amount of not less than
$5,000,000 and multiples of $1,000,000 in excess thereof."
5. AMENDMENT OF SCHEDULE 1. Schedule 1 to the Credit
Agreement is hereby amended by deleting it in its entirety and
inserting in lieu thereof Annex A attached hereto.
6. AMENDMENT TO ANNEX A. Annex A to the Credit
Agreement is hereby amended by deleting it in its entirety and
inserting in lieu thereof Annex B attached hereto.
7. NEW PROMISSORY NOTES. On the Second Amendment
Effective Date, the Company shall execute and deliver to each
Revolving Credit Lender, in substitution and exchange for, but not in
payment of the Revolving Credit Note held by such Lender, a promissory
note (each, a "New Revolving Credit Note") substantially in the form
of Exhibit A-3 to the Credit Agreement, with appropriate insertions
therein as to payee, date and principal amount, payable to the order
of such Lender and in a principal amount equal to such Lender's
Revolving Credit Percentage of the Revolving Credit Commitments.
8. CONDITIONS TO EFFECTIVENESS. This Second
Amendment shall become effective (the actual date of such
effectiveness, the "SECOND AMENDMENT EFFECTIVE DATE") as of the date
first above written when:
(a) counterparts hereof shall have been duly executed and
delivered by each of the parties hereto and acknowledged by
Pameco Investment Company, Inc.;
(b) the Acknowledgement, Consent and Amendment dated as of
August 6, 1998 by the Company and Pameco Investment Company,
Inc. shall have been duly executed and delivered by each of
the parties thereto;
(c) the Agent shall have received, with a copy for each
Lender, a certificate of the Secretary or an Assistant
Secretary of each Loan Party, dated as of the Second
Amendment Effective Date, and certifying (i) that attached
thereto is a true and complete copy of the resolutions
(which resolutions are in form and substance reasonably
satisfactory to each Lender) of the board of directors of
such Loan Party authorizing, as applicable, the execution,
delivery and performance of this Second Amendment, the
Acknowledgment, Consent and Amendment attached hereto, the
New Revolving Credit Notes, the New Fee Letter (as defined
below) and related matters, certified by the Secretary or an
Assistant Secretary of such Loan Party as of the Second
Amendment Effective Date and (ii) as to the incumbency and
specimen signature of such Loan Party's officers executing
this Second Amendment and all other documents required or
necessary to be delivered hereunder or in connection
herewith. Such certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked
or rescinded as of the date of such certificate;
(d) the Agent shall have received, with a copy for each
Lender, true and complete copies of the certificate of
incorporation and by-laws of each Loan Party, certified as
of the Second Amendment Effective Date as complete and
correct copies thereof by the Secretary or an Assistant
Secretary of such Loan Party;
(e) the Agent shall have received with a counterpart for
each Lender the executed legal opinion of Xxxxxxxxxx
Xxxxxxxx LLP, counsel to the Loan Parties, in form and
substance satisfactory to the Agent;
(f) the Agent shall have received fees as required in the
Fee Letter dated August 6, 1998 from GE Capital to the
Company (the "NEW FEE LETTER"); and
(g) the Agent shall have received the New Revolving Credit
Notes in accordance with paragraph 7 of this Amendment.
9. COMPANY REPRESENTATIONS AND WARRANTIES. The
Company represents and warrants that:
(a) each of this Amendment and the New Revolving Credit
Notes has been duly authorized, executed and delivered by
the Company;
(b) each of this Amendment, the Credit Agreement as amended
by this Amendment and the New Revolving Credit Notes
constitutes the legal, valid and binding obligation of the
Company;
(c) each of the representations and warranties set forth in
Section 7 of the Credit Agreement are true and correct as of
the Second Amendment Effective Date; provided that
references in the Credit Agreement to this "Agreement" shall
be deemed references to the Credit Agreement as amended to
date and by this Amendment and references to the "Revolving
Credit Notes" in the Credit Agreement shall be deemed
references to the New Revolving Credit Notes; and
(d) after giving effect to this Amendment, there does not
exist any Default or Event of Default.
10. PURCHASE AND SALE OF REVOLVING CREDIT COMMITMENTS
AND REVOLVING CREDIT LOANS AND RELATED PROVISIONS. (a) Upon the
Second Amendment Effective Date but immediately prior to any borrowing
on such date under the Credit Agreement, without the necessity of
further action by any party, each of the Revolving Credit Lenders
specified on Annex B hereto as "Selling Lenders" shall sell, transfer
and assign to the Revolving Credit Lenders specified on Annex B hereto
as "Purchasing Lenders" a portion of such Selling Lender's right,
title and interest in its outstanding Revolving Credit Loans and
participation in Letters of Credit, GE Guarantees, Letter of Credit
Reimbursement Obligations and Reimbursement Obligations, and each
Purchasing Lender shall purchase, take and acquire from the Selling
Lenders a portion of the Selling Lenders' right, title and interest in
and to their outstanding Revolving Credit Loans and participation in
Letters of Credit, GE Guarantees, Letter of Credit Reimbursement
Obligations and Reimbursement Obligations, so that after giving effect
to all such transfers, the outstanding Revolving Credit Loans and the
interests in the outstanding Letters of Credit held by each Selling
Lender and each Purchasing Lender shall be ratable in accordance with
such Lender's Revolving Credit Percentage.
(b) Prior to the Second Amendment Effective Date, the
Agent shall notify each Purchasing Lender and each Selling Lender of
the amounts to be funded and received, respectively, by each
Purchasing Lender and Selling Lender in order to give effect to the
foregoing transfers and to ensure that the outstanding Revolving
Credit Loans and Letter of Credit interests of each of the Revolving
Credit Lenders properly reflects such transfers. The transfers shall
be ratable among the outstanding Index Rate Loans and each Tranche of
outstanding Eurodollar Loans and among the interests in each
outstanding Letter of Credit.
(c) All payments of interest or fees made after the
Second Amendment Effective Date shall be made in accordance with the
Applicable Margins, commitment fee rates and Commitments in effect
prior to the Second Amendment Effective Date for all accruals of
interest and fees immediately prior to the Second Amendment Effective
Date and in effect after giving effect to this Amendment for any
accruals thereof on or after the Second Amendment Effective Date.
(d) The Company hereby agrees to pay to each Selling
Lender any amount that would have been required to be payable under
section 6.6 of the Credit Agreement had the Revolving Credit Loan of
such Selling Lender been repaid to the extent of its transfers thereof
to the Purchasing Lenders in connection with this Section 10.
11. CONTINUING EFFECTS. Except as expressly waived
hereby, the Credit Agreement shall continue to be and shall remain in
full force and effect in accordance with its terms.
12. EXPENSES. The Company agrees to pay and reimburse
the Agent for all of its out-of-pocket costs and expenses incurred in
connection with the negotiation, preparation, execution, and delivery
of this Amendment, including the fees and expenses of counsel to the
Agent.
13. COUNTERPARTS. This Amendment may be executed on
any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
14. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered in New York, New York by
their proper and duly authorized officers as of the day and year first
above written.
PAMECO CORPORATION
By /s/ Xxxxxxxx X. Xxxxxxxx
Title: Vice President
Chief Financial Officer
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
and as a Lender
By /s/ Xxxxx Xxxxxx
Title: [not listed]
FIRST UNION COMMERCIAL
CORPORATION
By /s/ Xxxxx X. Xxxx
Title: Vice President
NATIONSBANK, N.A.
By /s/ Xxxx Xxxxxx
Title: Assistant Vice President
SUNTRUST BANK, ATLANTA
By Xxxxx X. Xxxxx
Title: Vice President
By /s/ [unreadable]
Title:_________________
ANNEX A
TO THE SECOND AMENDMENT
LENDING OFFICE AND COMMITMENTS
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LENDER AND LENDING OFFICE PURCHASING OR TRANCHE A TRANCHE B REVOLVING
SELLING LENDER TERM LOAN TERM LOAN CREDIT
COMMITMENT COMMITMENT COMMITMENT
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General Electric Capital Corporation Selling Lender $9,375,000.00 $9,375,000.00 $31,250,000.00
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Contact: Xxxxx Xxxxxxx
First Union Commercial Corporation Purchasing Lender $1,875,000.00 $1,875,000.00 $19,583,333.34
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx Plaza Building, CP 17
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Contact: Xxxxx Xxxxxxxxx
NationsBank, N.A. Purchasing Lender $1,875,000.00 $1,875,000.00 $19,583,333.33
000 Xxxxxxxxx Xxxxxx X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Contact: Xxxxx Xxxxx
SunTrust Bank, Atlanta Purchasing Lender $1,875.000.00 $1,875,000.00 $19,583,333.33
00 Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Tel: 9404) 000-0000
Fax: (000) 000-0000
Contact Xxxxx Xxxxx
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TOTAL $15,000,000.00 $15,000,000.00 $90,000,000.00
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