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EXHIBIT 10.2
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Amendment"),
dated as of September 9, 1997, is among ACR GROUP, INC. a Texas corporation
("Borrower"), NATIONSBANK OF TEXAS, N.A., a national banking association
("Lender") and the guarantors listed on the signature pages hereto (each
individually a "Guarantor" and collectively, the "Guarantors").
RECITALS:
Borrower, Lender and Guarantors have entered into that certain Loan and
Security Agreement dated as of August 27, 1997 (such Loan and Security
Agreement, as amended or otherwise modified from time to time, the
"Agreement").
Borrower, Lender and Guarantors desire to amend the Agreement to include a
form of additional subsidiaries supplement to be executed by certain new
subsidiaries formed or acquired by the Borrower and to effect certain other
amendments as herein provided.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1. Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE II
Amendments
Section 2.1. Addition of Definition. Effective as of the date hereof,
the following definition is hereby added to Section 1.1:
"Additional Subsidiaries Supplement" shall mean an additional
subsidiaries supplement substantially in the form of Exhibit E hereto
which shall be executed by Subsidiaries of the Borrower formed or
acquired after the date of the Agreement.
Section 2.2. Amendment to Section 8.6. Effective as of the date hereof,
Section 8.6 of the Agreement is hereby amended by adding the phrase "and
Approved Acquisitions" after the words "Permitted Acquisitions".
Section 2.3. Addition of Section 8.10. Effective as of the date hereof,
the following Section 8.10 is hereby added at the end of Article 8 of the
Agreement:
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8.10 Additional Subsidiaries and Pledge of Assets. In the event
that the Borrower or any Subsidiary forms or acquires additional
subsidiaries in accordance with the terms of this Agreement, in order
for the assets of the new Subsidiary to be considered for inclusion in
the Borrowing Base, the Borrower shall cause the new Subsidiary to
execute an Additional Subsidiaries Supplement.
Section 2.4. Amendment to Section 10.1(b). Effective as of the date
hereof, Section 10.1(b) of the Agreement is hereby amended by changing (i) to
read "(i) $6,500,000, plus".
Section 2.5. Amendment to Section 10.4. Effective as of the date hereof,
Section 10.4 of the Agreement is hereby amended by adding the phrase,
"Permitted Acquisitions and Approved Acquisitions" at the end of such section.
Section 2.6. Amendment to Section 10.10. Effective as of the date
hereof, Section 10.10 of the Agreement is hereby amended by deleting $250,000
and adding "$500,000 in the fiscal year ending February 28, 1998 or by more than
$250,000 thereafter."
ARTICLE III
Ratifications and Other Agreements
Section 3.1. Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of all other documents executed in
connection with the Agreement are hereby ratified and confirmed and shall
continue in full force and effect. Borrower, Lender and Guarantors agree that
the Agreement as amended hereby and all other documents executed in connection
with the Agreement or this Amendment to which Borrower or such Guarantor is a
party shall continue to be legal, valid, binding and enforceable in accordance
with their respective terms.
Section 3.2. Representations and Warranties. Each of Borrower and each
Guarantor hereby represents and warrants to Lender that (a) the execution,
delivery and performance of this Amendment and any and all other documents
executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of Borrower or such Guarantor and will
not violate the articles of incorporation or bylaws of Borrower or such
Guarantor or any agreement to which Borrower or such Guarantor or any of its
properties is bound, (b) neither the articles of incorporation nor the bylaws
of Borrower or any Guarantor have been amended or revoked since the date of the
Agreement and such articles of incorporation and bylaws are in full force and
effect, (c) the representations and warranties contained in the Agreement, as
amended hereby, and any other documents executed in connection therewith or
herewith are true and correct on and as of the date hereof as though made on
and as of the date hereof, (d) no Event of Default has occurred and is
continuing and no event or condition has occurred that with the giving of
notice or lapse of time or both would be an Event of Default, and (e) Borrower
is in full compliance with all covenants and agreements contained in the
Agreement as amended hereby.
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ARTICLE IV
Miscellaneous
Section 4.1. Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other document
executed in connection herewith shall survive the execution and delivery of
this Amendment, and no investigation by Lender or any closing shall affect the
representations and warranties or the right of Lender to rely upon them.
Section 4.2. Reference to Agreement. Each of the Agreement and any and
all other agreements, documents, or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the
Agreement as amended hereby, are hereby amended so that any reference in such
documents to the Agreement shall mean a reference to the Agreement as amended
hereby.
Section 4.3. Expenses of Lender. As provided in the Agreement, Borrower
agrees to pay on demand all reasonable costs and expenses incurred by Lender in
connection with the preparation, negotiation, and execution of this Amendment
and any other documents executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including without limitation the costs
and reasonable fees of Lender's legal counsel, and all costs and expenses
incurred by Lender in connection with the enforcement or preservation of any
rights under the Agreement, as amended hereby, or any other document executed
in connection therewith, including without limitation the costs and reasonable
fees of Lender's legal counsel.
Section 4.4. Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 4.5. Applicable Law. This Amendment and all other documents
executed pursuant hereto shall be governed by and construed in accordance with
the laws of the State of Texas.
Section 4.6. Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Lender, Borrower, Guarantors and their respective
successors and assigns, except Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Lender.
Section 4.7. Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
Section 4.8. Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 4.9. Entire Agreement. THE AGREEMENT, THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THE AGREEMENT OR THIS AMENDMENT
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REPRESENT THE FINAL AGREEMENTS AMONG THE PARTIES HERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES HERETO.
Executed as of the date first written above.
BORROWER:
ACR GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: XXXXXXX X. XXXXXXX
----------------------------------
Title: SR. VICE PRESIDENT AND SECRETARY
---------------------------------
LENDER:
NATIONSBANK OF TEXAS, N.A.
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: XXXX XXXXXXXX
-------------------------------
Title: Vice President
------------------------------
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Each of the undersigned Guarantors hereby consents and agrees to this
Amendment.
GUARANTORS:
ACR SUPPLY, INC.
By: /s/ XXXXXXX XXXXXXX
-------------------------------
Secretary
HEATING AND COOLING SUPPLY, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------
Secretary
TOTAL SUPPLY, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------
Secretary
VALLEY SUPPLY, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------
Secretary
ENER-TECH INDUSTRIES, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------
Secretary
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FLORIDA COOLING SUPPLY, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------
Secretary
LIFETIME FILTER, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------
Secretary
WEST COAST HVAC SUPPLY, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------
Secretary
TIME ENERGY SYSTEMS SOUTHWEST, INC.
By: /s/ XXXXXXX XXXXXXX
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Secretary
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Exhibit E
FORM OF ADDITIONAL SUBSIDIARIES SUPPLEMENT
ADDITIONAL SUBSIDIARIES SUPPLEMENT (this "Supplement"), dated as of
___________, 1997 to the Loan and Security Agreement dated as of August 27,
1997 among ACR GROUP, INC., a Texas corporation ("Borrower"), NATIONSBANK OF
TEXAS, N.A., a national banking association ("Lender") and the guarantors
listed on the signature pages hereto (each individually a "Guarantor" and
collectively, the "Guarantors") (as amended. supplemented and otherwise
modified, the "Loan Agreement"). Capitalized terms not otherwise defined
herein shall have the meaning assigned to such terms in the Loan Agreement.
RECITALS:
The Loan Agreement provides that, in the event that the Borrower or
any Subsidiary forms or acquires additional subsidiaries in accordance with the
terms of the Loan Agreement, in order for the assets of the new Subsidiary to
be considered for inclusion in the Borrowing Base, the Borrower shall cause the
new Subsidiary to execute an Additional Subsidiaries Supplement.
________________, a _______________ corporation ("__________________"),
was not a Subsidiary of the Borrower on the date of the Loan Agreement, and,
therefore, was not a party to the Loan Agreement but now desires to become a
party thereunder and a guarantor of the Secured Obligations.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
By execution of this Supplement, _______________________ agrees to be
bound by all of the provisions of the Loan Agreement applicable to a Subsidiary
of the Borrower and a Guarantor thereunder, including without limitation
Articles 6 and 7 relating to the grant of a security interest in its assets and
certain collateral covenants. Further, ___________________ agrees that, it
shall, on the date this Supplement is accepted by the Lender, become a party to
Loan Agreement, in its capacity as Guarantor, to the same extent as if
originally a party thereto with the representations and warranties applicable to
a Subsidiary of the Borrower contained therein being deemed to be made by the
Borrower on behalf of ____________________ as of the date hereof and with the
representations and warranties applicable to a Guarantor contained therein being
deemed to be made by _____________________ as of the date hereof
Schedule 5.1(b) to the Loan Agreement is hereby amended to add
___________________ as a Subsidiary of the Borrower.
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_________________________ further grants to Lender a security interest
in the Collateral owned by ____________ and pledges and assigns the Collateral
to Lender, all upon and subject to the terms and conditions of the Loan
Agreement.
______________________ hereby represents and warrants to Lender that:
(a) Its chief executive office and the books and records relating to
the Receivables owned by _______________ are located at the address or
addresses listed on Exhibit A hereto Schedule 5.1(t) to the Loan
Agreement is hereby amended to add the addresses listed on Exhibit A.
(b) The address (including street, city, county and state) of each
facility at which Inventory owned by ___________________ is located is
set forth on Exhibit B hereto together with (i) the approximate
quantity in Dollars of the Inventory customarily located at each
Facility and (ii) if the facility is leased or is a third party
warehouse or processor location, the name of the landlord or such
third party warehouseman or processor. Schedule 5.1(u) to the Loan
Agreement is hereby amended to include the information set forth on
Exhibit B.
(c) Except as set forth on Exhibit C hereto, ____________________ has
not been known as or used any corporate or fictitious name other than
the corporate name of _____________________ on the date of this
Supplement. All trade names or styles under which _________________
sells Inventory or creates Receivables, or to which instruments in
payment or Receivables are made payable, are listed on Exhibit C
hereto. Schedule 5.1(v) to the Loan Agreement is hereby amended to
include the information set forth on Exhibit C.
IN WITNESS WHEREOF, _______________________ has executed this
Supplement on the date first above written.
-----------------------------------
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
AGREED AND ACCEPTED AS OF THE DATE
FIRST ABOVE WRITTEN:
BORROWER
ACR GROUP, INC.
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
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LENDER:
NATIONSBANK OF TEXAS, N.A.
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
GUARANTORS:
ACR SUPPLY, INC.
By:
--------------------------------
Secretary
HEATING AND COOLING SUPPLY, INC.
By:
--------------------------------
Secretary
TOTAL SUPPLY, INC.
By:
--------------------------------
Secretary
VALLEY SUPPLY, INC.
By:
--------------------------------
Secretary
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ENER-TECH INDUSTRIES, INC.
By:
--------------------------------
Secretary
FLORIDA COOLING SUPPLY, INC.
By:
--------------------------------
Secretary
LIFETIME FILTER, INC.
By:
--------------------------------
Secretary
WEST COAST HVAC SUPPLY, INC.
By:
--------------------------------
Secretary
TIME ENERGY SYSTEMS SOUTHWEST, INC.
By:
--------------------------------
Secretary
