EXHIBIT 10.14E
EXECUTION COPY
THIRD AMENDMENT
THIRD AMENDMENT (this "Amendment"), dated as of October 16,
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, and the Second Amendment, dated as of August 6, 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:
10 DEFINED TERMS. Terms defined in the Credit Agreement
are used herein with the meanings set forth in the Credit Agreement
unless otherwise defined herein.
20 AMENDMENT OF SECTION 1.1. 2.1 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:
"Tranche A Term Loan Maturity Date" shall mean September 30,
2003.
"Tranche B Term Loan Maturity Date" shall mean September 30,
2005.
2.2 Section 1.1 of the Credit Agreement is hereby amended
by inserting the following new definitions in the appropriate
alphabetical order:
"Third Party Interactives" shall mean all Persons with whom
any Loan Party exchanges data electronically in the ordinary
course of business, including, without limitation, customers,
suppliers, third-party vendors, subcontractors, processors,
converters, shippers and warehousemen.
2
"Year 2000 Assessment" shall mean a comprehensive written
assessment of the nature and extent of each Loan Party's Year
2000 Mission Critical Problems and Year 2000 Mission Critical
Date-Sensitive Systems/Components, including, without limitation,
Year 2000 Mission Critical Problems regarding data exchanges with
Third Party Interactives.
"Year 2000 Corrective Actions" shall mean, as to each Loan
Party, all actions necessary to eliminate such Person's Year 2000
Mission Critical Problems, including, without limitation,
computer code enhancements and revisions, upgrades and
replacements of Year 2000 Mission Critical Date-Sensitive
Systems/Components, and coordination of such enhancements,
revisions, upgrades and replacements with Third Party
Interactives.
"Year 2000 Corrective Plan"shall mean, with respect to each
Loan Party, a comprehensive plan to eliminate such Person's Year
2000 Mission Critical Problems on or before June 30, 1999,
including, without limitation, (i) computer code enhancements or
revisions, (ii) upgrades or replacements of Year 2000 Mission
Critical Date-Sensitive Systems/Components, (iii) test and
validation procedures, (iv) an implementation time line and
budget and (v) designation of specific employees who will be
responsible for planning, coordinating and implementing each
phase or subpart of the Year 2000 Corrective Plan.
"Year 2000 Implementation Testing" shall mean, as to each
Loan Party, (i) the performance of test and validation procedures
regarding Year 2000 Corrective Actions on a unit basis and on a
systemwide basis, (ii) the performance of test and validation
procedures regarding data exchanges among the Loan Parties' Year
2000 Mission Critical Date-Sensitive Systems/Components and data
exchanges with Third Party Interactives, and (iii) the design and
implementation of additional Corrective Actions, the need for
which has been demonstrated by test and validation procedures.
"Year 2000 Mission Critical Date-Sensitive System/Component"
shall mean, as to any Person, any mission critical system
software, network software, applications software, data base,
computer file, embedded microchip, firmware or hardware that
accepts, creates, manipulates, sorts, sequences, calculates,
compares or outputs calendar-related data accurately; such
systems and components shall include, without limitation,
mainframe computers, file server/client systems, computer
workstations, routers, hubs, other network-related hardware, and
other computer-related software, firmware or hardware and
information processing and delivery systems of any kind and
telecommunications systems and other communications processors,
security systems, alarms, elevators and HVAC systems.
"Year 2000 Mission Critical Problems" shall mean, with
respect to each Loan Party, limitations on the capacity or
readiness of each Loan Party's Year 2000 Mission Critical Date-
Sensitive Systems/Components to accurately accept, create,
manipulate, sort, sequence, calculate, compare or output calendar
date information with respect to calendar year 1999 or any
subsequent calendar year beginning on or after January 1, 2000
(including leap year computations), including, without
limitation, exchanges of information amount Year 2000 Mission
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Critical Date-Sensitive Systems/Components of the Loan Parties
and exchanges of information among the Loan Parties and Year 2000
Mission Critical Date-Sensitive Systems/Components of Third Party
Interactives and functionality of peripheral interfaces,
firmware, and embedded microchips.
30 AMENDMENT OF SECTION 2.1. Section 2.1 of the Credit
Agreement is hereby amended by adding thereto a new paragraph which
shall read as follows:
"Subject to the terms and conditions of the Third Amendment
dated as of October 16, 1998 (the "Third Amendment") to this
Credit Agreement among the parties hereto, (a) each Tranche A
Term Loan Lender severally agrees to make additional Tranche A
Term Loans to the Company on the Third Amendment Effective Date
(as defined in the Third Amendment) in an aggregate principal
amount not to exceed the amount set forth opposite the name of
such Lender on Annex A to the Third Amendment and (b) each
Tranche B Term Loan Lender severally agrees to make additional
Tranche B Term Loans to the Company on the Third Amendment
Effective Date in an aggregate principal amount not to exceed the
amount set forth opposite the name of such Lender on Annex A to
the Third Amendment. The additional Tranche A Term Loans and
additional Tranche B Term Loans, together with the Tranche A Term
Loans and Tranche B Term Loans, respectively, made on the
Effective Date shall constitute the "Tranche A Term Loans" and
"Tranche B Term Loans", respectively, and shall also constitute
"Term Loans" for all purposes hereof. The Term Loans may from
time to time be Eurodollar Loans or Index Rate Loans, as
determined by the Company and notified to the Agent in accordance
with subsections 2.3 and 6.4. For purposes of such subsection
2.3, the term "Effective Date" shall be deemed to mean the Third
Amendment Effective Date."
40 AMENDMENT OF SECTION 2.4. Section 2.4 of the Credit
Agreement is hereby amended by (a) deleting the chart at the end of
paragraph (a) thereof in its entirety and inserting in lieu thereof
the following:
"Installment Principal Amount
----------- ----------------
December 31, 1998 750,000
March 31, 1999 750,000
June 30, 1999 750,000
September 30, 1999 750,000
December 31, 1999 750,000
March 31, 2000 750,000
June 30, 2000 750,000
September 30, 2000 750,000
December 31, 2000 1,250,000
March 31, 2001 1,250,000
June 30, 2001 1,250,000
September 30, 2001 1,250,000
December 31, 2001 1,750,000
March 31, 2002 1,750,000
June 30, 2002 1,750,000
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September 30, 2002 1,750,000
December 31, 2002 1,750,000
March 31, 2003 1,750,000
June 30, 2003 1,750,000
Tranche A Term Loan
Maturity Date 1,750,000"; and
(b) deleting the chart at the end of paragraph (b) thereof in its
entirety and inserting in lieu thereof the following:
"Installment Principal Amount
----------- ----------------
December 31, 1998 62,500
March 31, 1999 62,500
June 30, 1999 62,500
September 30, 1999 62,500
December 31, 1999 62,500
March 31, 2000 62,500
June 30, 2000 62,500
September 30, 2000 62,500
December 31, 2000 62,500
March 31, 2001 62,500
June 30, 2001 62,500
September 30, 2001 62,500
December 31, 2001 62,500
March 31, 2002 62,500
June 30, 2002 62,500
September 30, 2002 62,500
December 31, 2002 62,500
March 31, 2003 62,500
June 30, 2003 62,500
September 30, 2003 62,500
December 31, 2003 2,968,750
March 31, 2004 2,968,750
June 30, 2004 2,968,750
September 30, 2004 2,968,750
December 31, 2004 2,968,750
March 31, 2005 2,968,750
June 30, 2005 2,968,750
Tranche B Term Loan
Maturity Date 2,968,750".
5
50 AMENDMENT OF SECTION 6.1. Section 6.1 of the Credit
Agreement is hereby amended by (i) deleting the ratio "3.25:1.00" from
paragraph (b) thereof and inserting in lieu thereof the ratio
"4.25:1.00" and (ii) deleting the ratio "5.50:1.00" from each place it
appears in paragraph (e) thereof and inserting in lieu thereof the
ratio "6.00:1.00."
60 AMENDMENT OF SECTION 7. Section 7 of the Credit
Agreement is hereby amended by inserting the following new subsection
7.26 at the end thereof:
"7.26 YEAR 2000 PROBLEMS. The Company has completed a
Year 2000 Assessment and has prepared a Year 2000 Corrective
Plan, and on or before June 30, 1999, the Company shall complete
Year 2000 Corrective Actions and Year 2000 Implementation Testing
and shall have eliminated all Year 2000 Mission Critical Problems
except where the failure to eliminate the same could not
reasonably be expected to have a Material Adverse Effect."
70 AMENDMENT OF SECTION 9. Section 9 of the Credit
Agreement is hereby amended by inserting the following new subsection
9.17 at the end thereof:
"9.17 YEAR 2000 COMPLIANCE. On or before June 30, 1999, the
Company shall complete Year 2000 Corrective Actions and Year 2000
Implementation Testing and shall eliminate all Year 2000 Mission
Critical Problems, except where the failure to eliminate the same
could not reasonably be expected to have a Material Adverse
Effect."
80 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 B attached hereto.
90 AMENDMENT OF SCHEDULE 10.8. Schedule 10.8 to the
Credit Agreement is hereby amended by (i) deleting the ratio "4.5 to
1.0" where it appears in paragraph (e) thereof and inserting in lieu
thereof the ratio "5.0 to 1.0" and (ii) deleting the ratio "5.5 to
1.0" where it appears in paragraph (f) thereof and inserting in lieu
thereof the ratio "6.0 to 1.0."
100 NEW PROMISSORY NOTES. On the Third Amendment Effective
Date, the Company shall execute and deliver (i) to each Tranche A Term
Loan Lender, in substitution and exchange for, but not in payment of
the Tranche A Term Note held by such Lender, a promissory note (the
"New Tranche A Term Loan Note") substantially in the form of Exhibit
A-1 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 the Tranche A Term Loan of such
Lender and (ii) to each Tranche B Term Loan Lender, in substitution
and exchange for, but not in payment of the Tranche B Term Note held
by such Lender, a promissory note (the "New Tranche B Term Loan Note";
together with the New Tranche A Term Loan Note, the "New Notes")
substantially in the form of Exhibit A-2 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
the Tranche B Term Loan of such Lender.
6
110 CONDITIONS TO EFFECTIVENESS. This Third Amendment
shall become effective (the actual date of such effectiveness, the
"Third Amendment Effective Date") as of the date first above written
when:
11.1 counterparts hereof shall have been duly executed and
delivered by each of the parties hereto and acknowledged by
Pameco Investment Company, Inc.;
11.2 the Acknowledgement, Consent and Amendment dated as of
October 16, 1998 by the Company and Pameco Investment Company,
Inc. shall have been duly executed and delivered by each of the
parties thereto;
11.3 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 Third 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 Third Amendment, the
Acknowledgment, Consent and Amendment attached hereto, the New
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 Third Amendment Effective Date and (ii) as to the
incumbency and specimen signature of such Loan Party's officers
executing this Third 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;
11.4 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 Third Amendment
Effective Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of such Loan Party;
11.5 the Agent shall have received with a counterpart for each
Lender the executed legal opinion of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
counsel to the Loan Parties, in form and substance satisfactory
to the Agent;
11.6 the Agent shall have received fees as required in the Fee
Letter dated October 16, 1998 from GE Capital to the Company (the
"New Fee Letter"); and
11.7 the Agent shall have received the New Notes in accordance
with paragraph 8 of this Amendment.
120 COMPANY REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants that:
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12.1 each of this Amendment and the New Notes has been duly
authorized, executed and delivered by the Company;
12.2 each of this Amendment, the Credit Agreement as amended by
this Amendment and the New Notes constitutes the legal, valid and
binding obligation of the Company;
12.3 each of the representations and warranties set forth in
Section 7 of the Credit Agreement are true and correct as of the
Third 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 "Notes" in the Credit Agreement shall be
deemed references to the New Notes; and
12.4 after giving effect to this Amendment, there does not exist
any Default or Event of Default.
130 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.
140 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.
150 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.
160 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK.
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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/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: VP, CFO
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
and as a Lender
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (?)
Title: Vice President
WACHOVIA BANK, N.A.
By /s/ [unreadable]
Title: Vice President
NATIONSBANK, N.A.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
Title: Asst. Vice President
SUNTRUST BANK, ATLANTA
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: V.P.
By /s/ ▇▇▇▇▇▇▇ (?)
Title: Bank Officer
