SECOND AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
PENTACON, INC.
AS BORROWER,
NATIONSBANK, N.A.,
AS ADMINISTRATIVE AGENT,
NATIONSBANC XXXXXXXXXX SECURITIES LLC,
AS LEAD ARRANGER,
AND
THE LENDERS SIGNATORY HERETO
DATED AS OF
FEBRUARY 12, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS
Section 1.01 TERMS DEFINED ABOVE ................................ 1
Section 1.02 TERMS DEFINED IN CREDIT AGREEMENT .................. 1
Section 1.03 OTHER DEFINITIONAL PROVISIONS ...................... 2
ARTICLE II. AMENDMENTS TO CREDIT AGREEMENT
Section 2.01 AMENDMENTS TO DEFINITIONS .......................... 2
Section 2.02 AMENDMENTS TO ARTICLE II ........................... 4
Section 2.03 AMENDMENTS TO ANNEXES, SCHEDULES AND EXHIBITS ...... 4
ARTICLE III. CONDITIONS
Section 3.01 LOAN DOCUMENTS ..................................... 4
Section 3.02 REPRESENTATIONS AND WARRANTIES ..................... 4
Section 3.03 NO DEFAULT ......................................... 4
Section 3.04 NO CHANGE .......................................... 4
Section 3.05 SECURITY INSTRUMENTS ............................... 5
Section 3.06 OTHER INSTRUMENTS OR DOCUMENTS ..................... 5
ARTICLE IV. MISCELLANEOUS
Section 4.01 ADOPTION, RATIFICATION AND CONFIRMATION OF
CREDIT AGREEMENT ................................. 5
Section 4.02 RATIFICATION AND AFFIRMATION OF GUARANTY ........... 5
Section 4.03 SUCCESSORS AND ASSIGNS ............................. 5
Section 4.04 COUNTERPARTS ....................................... 5
Section 4.05 NUMBER AND GENDER .................................. 6
Section 4.06 ENTIRE AGREEMENT ................................... 6
Section 4.07 INVALIDITY ......................................... 6
Section 4.08 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS ....... 6
Section 4.09 GOVERNING LAW ...................................... 6
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ANNEXES, EXHIBITS AND SCHEDULES
Annex I - List of Percentage Shares, Maximum Revolving Credit Amounts,
and Revolver Term Loans
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SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Second Amendment") executed effective as of the 12th day of February, 1999 (the
"Effective Date"), is by and among Pentacon, Inc., a corporation formed under
the laws of the State of Delaware (the "Borrower"); each of the lenders that is
a signatory hereto or which becomes a signatory hereto and to the hereinafter
described Credit Agreement as provided in Section 12.06 of the Credit Agreement
(individually, together with its successors and assigns, a "Lender" and,
collectively, the "Lenders"); and NationsBank, N.A., a national banking
association (in its individual capacity, "NationsBank"), and as administrative
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Administrative Agent and the Lenders are
parties to that certain Amended and Restated Credit Agreement dated as of
September 3, 1998, as amended by the First Amendment to Credit Agreement dated
as of December 31, 1998 (the "Credit Agreement"), pursuant to which the Lenders
agreed to make loans to and extensions of credit on behalf of the Borrower; and
WHEREAS, the Borrower and the Lenders desire to amend the Credit Agreement
in the particulars hereinafter provided;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01 TERMS DEFINED ABOVE. As used in this Second Amendment, each
of the terms "Administrative Agent", "Borrower", "Credit Agreement", "Effective
Date", "Second Amendment", "Lenders" and "NationsBank" shall have the meaning
assigned to such term hereinabove.
SECTION 1.02 TERMS DEFINED IN CREDIT AGREEMENT. Each term defined in the
Credit Agreement and used herein without definition shall have the meaning
assigned to such term in the Credit Agreement, unless expressly provided to the
contrary.
SECTION 1.03 OTHER DEFINITIONAL PROVISIONS.
(a) The words "hereby", "herein", "hereinafter", "hereof", "hereto"
and "hereunder" when used in this Second Amendment shall refer to this
Second Amendment as a whole and not to any particular Article, Section,
subsection or provision of this Second Amendment.
(b) Section, subsection and Exhibit references herein are to such
Sections, subsections and Exhibits to this Second Amendment unless
otherwise specified.
ARTICLE II. AMENDMENTS TO CREDIT AGREEMENT
The Borrower, the Administrative Agent, and the Lenders agree that the
Credit Agreement is hereby amended, effective as of the Effective Date, in the
following particulars.
SECTION 2.01 AMENDMENTS TO DEFINITIONS.
(a) The following terms, which are defined in Section 1.02 of the Credit
Agreement, are hereby amended in their entirety to read as follows:
"Agreement" shall mean this Amended and Restated Credit Agreement, as
amended and supplemented by the First Amendment and the Second Amendment, as the
same may from time to time be further amended or supplemented.
"Applicable Margin" shall mean for 3.0% per annum for Eurodollar Loans and
1.0% per annum for Base Rate Loans; provided, however, if a Capital Market Event
has not occurred on or before March 15, 1999, "Applicable Margin" shall mean,
from and after March 15, 1999, 4.0% per annum for Eurodollar Loans and 2.0% per
annum for Base Rate Loans; and further provided, however, on the first
Determination Date (hereinafter defined) following the occurrence of a Capital
Market Event, "Applicable Margin" shall mean the applicable per annum percentage
set forth at the appropriate intersection in the table shown below, based on the
Leverage Ratio, for the four quarterly periods ending on and determined as of
the immediately preceding Quarterly Date:
--------------------------------------------------------------------------
LEVERAGE RATIO APPLICABLE MARGIN APPLICABLE
FOR EURODOLLAR LOANS MARGIN FOR BASE
RATE LOANS
--------------------------------------------------------------------------
Less than 3.00 1.750% 0.25%
--------------------------------------------------------------------------
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--------------------------------------------------------------------------
Less than 3.50, but 2.000% 0.50%
greater than or
equal to 3.00
--------------------------------------------------------------------------
Less than 4.00, but 2.375% 0.75%
greater than or
equal to 3.50
--------------------------------------------------------------------------
Less than 4.50, but 2.625% 1.00%
greater than or
equal to 4.00
--------------------------------------------------------------------------
Less than 5.0, but 2.875% 1.25%
greater than or
equal to 4.50
--------------------------------------------------------------------------
Greater than or 3.250% 1.50%
equal to 5.0
--------------------------------------------------------------------------
After the occurrence of a Capital Market Event, the Applicable Margin shall be
established following each Quarterly Date (each, a "Determination Date"). Any
change in the Applicable Margin following each Determination Date shall be
determined based upon the computations set forth in the Compliance Certificate
furnished to the Administrative Agent pursuant to Section 8.01(h) or Section
9.03(i), subject to review and approval of such computations by the
Administrative Agent. Each change in the Applicable Margin shall be effective
commencing as of the next Business Day following the date such certificate is
received (including, without limitation, in respect of Eurodollar Loans then
outstanding notwithstanding that such change occurs during an Interest Period),
and shall remain in effect until the date that is the next Business Day
following the first to occur of the date on which (i) a new certificate is
delivered for which a change in the Applicable Margin occurs or (ii) is required
to be delivered; provided, however; if the Borrower shall fail to deliver any
such certificate within the time period required by Section 8.01(h), then the
Applicable Margin shall be the highest percentage amount stated for each Type of
Loan as set forth in the then applicable table until the appropriate certificate
is so delivered.
(b) Section 1.02 of the Credit Agreement is hereby further amended and
supplemented by adding the following new definition where alphabetically
appropriate, which reads in its entirety as follows:
"Second Amendment" shall mean that certain Second Amendment to Amended and
Restated Credit Agreement dated as of February 12, 1999, by and among the
Borrower, the Administrative Agent and the Lenders.
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SECTION 2.02 AMENDMENTS TO ARTICLE II. Subsections 2.03(d) and (e) of the
Credit Agreement are hereby amended in their entirety to read as follows:
"(d) If a Subordinated Debt Event occurs on or before March 15,
1999, the Percentage Shares, Maximum Revolving Credit Amounts and Revolver
Term Loans of each Lender shall be the amounts set forth on Annex I under
item B thereof.
(e) Unless previously reduced to an amount equal to or less than
$90,000,000 pursuant to Sections 2.03(b), (c) or (d), on March 15, 1999
the Aggregate Maximum Revolving Credit Amounts shall automatically be
reduced to $90,000,000."
SECTION 2.03 AMENDMENTS TO ANNEXES, SCHEDULES AND Exhibits. Annex I to the
Credit Agreement is hereby replaced with Annex I attached hereto. Accordingly,
all references in the Credit Agreement, to Annex I shall be deemed to be
references to Annex I attached to this Second Amendment.
ARTICLE III. CONDITIONS
The enforceability of this Second Amendment against the Administrative
Agent and the Lenders is subject to the satisfaction of the following conditions
precedent:
SECTION 3.01 LOAN DOCUMENTS. The Administrative Agent shall have received
multiple original counterparts, as requested by the Administrative Agent, of
this Second Amendment executed and delivered by a duly authorized officer of the
Borrower, the Administrative Agent, each Guarantor, and each Lender.
SECTION 3.02 REPRESENTATIONS AND WARRANTIES. Except as affected by the
transactions contemplated in the Credit Agreement and this Second Amendment,
each of the representations and warranties made by the Borrower and the
Guarantors in or pursuant to the Security Instruments, including the Credit
Agreement, shall be true and correct in all material respects as of the
Effective Date, as if made on and as of such date. Borrower hereby represents
and warrants to the Administrative Agent that the execution, delivery and
performance of this Second Amendment has been duly authorized and that the
representation in the Credit Agreement as to the enforceability and
authorization thereof shall refer to the Credit Agreement, as amended by this
Second Amendment.
SECTION 3.03 NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing as of the Effective Date.
SECTION 3.04 NO CHANGE. No event shall have occurred since September 30,
1998, which, in the reasonable opinion of the Lenders, could have a material
adverse effect on the condition
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(financial or otherwise), business, operations or prospects of the Borrower or
the Guarantors.
SECTION 3.05 SECURITY INSTRUMENTS. All of the Security Instruments shall
be in full force and effect and provide to the Administrative Agent the security
intended thereby to secure the Indebtedness, as amended and supplemented hereby.
SECTION 3.06 OTHER INSTRUMENTS OR DOCUMENTS. The Administrative Agent or
any Lender or counsel to the Administrative Agent shall receive such other
instruments or documents as they may reasonably request.
ARTICLE IV. MISCELLANEOUS
SECTION 4.01 ADOPTION, RATIFICATION AND CONFIRMATION OF CREDIT AGREEMENT.
Each of the Borrower, the Guarantors, the Administrative Agent, and the Lenders
does hereby adopt, ratify and confirm the Credit Agreement, as amended hereby,
and acknowledges and agrees that the Credit Agreement, as amended hereby, is and
remains in full force and effect.
SECTION 4.02 RATIFICATION AND AFFIRMATION OF GUARANTY. Each Guarantor
hereby expressly (i) acknowledges the terms of this Second Amendment, (ii)
ratifies and affirms its obligations under its Amended and Restated Guaranty
Agreement or Guaranty Agreement, as applicable, dated as of September 3, 1998,
in favor of the Administrative Agent and the Lenders, as amended, supplemented
or otherwise modified (the "Guaranty Agreement"), (iii) acknowledges, renews and
extends its continued liability under its Guaranty Agreement and agrees that its
Guaranty Agreement remains in full force and effect; and (iv) guarantees to the
Administrative Agent and each Lender to promptly pay when due all amounts owing
or to be owing by it under its Guaranty Agreement pursuant to the terms and
conditions thereof.
SECTION 4.03 SUCCESSORS AND ASSIGNS. This Second Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted pursuant to the Credit Agreement.
SECTION 4.04 COUNTERPARTS. This Second Amendment may be executed by one or
more of the parties hereto in any number of separate counterparts, and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument and shall be enforceable as of the Effective Date upon the execution
of one or more counterparts hereof by the Borrower, the Guarantors, the
Administrative Agent and the Lenders. In this regard, each of the parties hereto
acknowledges that a counterpart of this Second Amendment containing a set of
counterpart execution pages reflecting the execution of each party hereto shall
be sufficient to reflect the execution of this Second Amendment by each
necessary party hereto and shall constitute one instrument.
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SECTION 4.05 NUMBER AND GENDER. Whenever the context requires, reference
herein made to the single number shall be understood to include the plural; and
likewise, the plural shall be understood to include the singular. Words denoting
sex shall be construed to include the masculine, feminine and neuter, when such
construction is appropriate; and specific enumeration shall not exclude the
general but shall be construed as cumulative. Definitions of terms defined in
the singular or plural shall be equally applicable to the plural or singular, as
the case may be, unless otherwise indicated.
SECTION 4.06 ENTIRE AGREEMENT. This Second Amendment constitutes the
entire agreement among the parties hereto with respect to the subject hereof.
All prior understandings, statements and agreements, whether written or oral,
relating to the subject hereof are superseded by this Second Amendment.
SECTION 4.07 INVALIDITY. In the event that any one or more of the
provisions contained in this Second Amendment shall for any reason be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Second Amendment.
SECTION 4.08 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS. All titles or
headings to Articles, Sections, subsections or other divisions of this Second
Amendment or the exhibits hereto, if any, are only for the convenience of the
parties and shall not be construed to have any effect or meaning with respect to
the other content of such Articles, Sections, subsections, other divisions or
exhibits, such other content being controlling as the agreement among the
parties hereto.
SECTION 4.09 GOVERNING LAW. This Second Amendment shall be deemed to be a
contract made under and shall be governed by and construed in accordance with
the internal laws of the State of Texas.
THIS SECOND AMENDMENT AND OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE
PARTIES BEFORE OR SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE EXECUTION
HEREOF TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT AND REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the Effective Date.
BORROWER: PENTACON, INC.
By: ____________________________
Name:
Title:
LENDER AND AGENT: NATIONSBANK, N.A.
By: ____________________________
Name:
Title:
LENDERS: PARIBAS
By: ____________________________
Name:
Title:
By: ____________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By: ____________________________
Name:
Title:
Signature Page - 1
GUARANTORS: ALATEC PRODUCTS, INC.
By: ____________________________
Name:
Title:
AXS SOLUTIONS, INC.
By: ____________________________
Name:
Title:
CAPITOL BOLT & SUPPLY, INC.
By: ____________________________
Name:
Title:
MAUMEE INDUSTRIES, INC.
By: ____________________________
Name:
Title:
SALES SYSTEMS, LIMITED
By: ____________________________
Name:
Title:
Signature Page - 2
TEXAS INTERNATIONAL AVIATION,
INC.
By: ____________________________
Name:
Title:
PACE PRODUCTS, INC.
By: ____________________________
Name:
Title:
D-BOLT PRODUCTS, INC.
By: ____________________________
Name:
Title:
WEST COAST AERO PRODUCTS
HOLDING CORPORATION, INC.
By: ____________________________
Name:
Title:
ASI AEROSPACE GROUP, INC.
By: ____________________________
Name:
Title:
Signature Page - 3
XXXXXXX AVIATION, INC.
By: ____________________________
Name:
Title:
Signature Page - 4
ANNEX I
LIST OF PERCENTAGE SHARES,
MAXIMUM REVOLVING CREDIT AMOUNTS
AND REVOLVER TERM LOANS
A. So long as a Subordinated Debt Event has not occurred on or before
March 15, 1999:
--------------------------------------------------------------------------------
PERCENTAGE MAXIMUM REVOLVING REVOLVER
NAME OF LENDER SHARE CREDIT AMOUNT TERM LOANS
--------------------------------------------------------------------------------
NationsBank, N.A. 80.000% $88,000,000 $32,000,000
--------------------------------------------------------------------------------
Paribas 8.5714% $9,428,540 $3,428,571.43
--------------------------------------------------------------------------------
Union Bank of 11.4286% $12,571,460 $4,571,428.57
California, N.A.
--------------------------------------------------------------------------------
TOTAL 100% $110,000,000 $40,000,000
--------------------------------------------------------------------------------
B. If a Subordinated Debt Event occurs on or before March 15, 1999:
--------------------------------------------------------------------------------
PERCENTAGE MAXIMUM REVOLVING REVOLVER
NAME OF LENDER SHARE CREDIT AMOUNT TERM LOANS
--------------------------------------------------------------------------------
NationsBank, N.A. 60.6594% $39,428,590.00 -0-
--------------------------------------------------------------------------------
Paribas 8.5714% $5,571,410 -0-
--------------------------------------------------------------------------------
Union Bank of 30.7692% $20,000,000 -0-
California, N.A.
--------------------------------------------------------------------------------
TOTAL 100% $65,000,000 -0-
--------------------------------------------------------------------------------
Annex I-1
