Exhibit 10.10
AMENDMENT AGREEMENT XX. 0
XXXXXXXXX XX. 0, dated as of April 29, 1996, among Pameco Corporation
(the "Borrower"), the lenders party hereto (the "Lenders") and General Electric
Capital Corporation, as Agent (the "Agent").
WHEREAS, the Borrower, the Lenders and the Agent are parties to a
Credit Agreement dated as of March 19, 1992 (as amended, and as the same may be
further amended, supplemented or modified from time to time in accordance with
its terms, the "Credit Agreement") and such parties desire to amend the Credit
Agreement.
THE PARTIES AGREE AS FOLLOWS:
SECTION 1. Definitions. All capitalized terms used herein, unless
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otherwise defined, are used as defined in the Credit Agreement.
SECTION 2. Amendment to Credit Agreement. Subject to the
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satisfaction of the conditions set forth in Section 3 below, the Credit
Agreement is amended effective as of the date hereof as follows:
(a) Section 1 of the Credit Agreement is hereby amended by adding the
following definitions in the proper order:
"Collections" shall have the meaning ascribed thereto in Annex X to
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the Transfer Agreement and the Receivables Purchase Agreement.
"Company Pledge Agreement" means that certain Pledge Agreement, dated
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as of April 29, 1996, by the Company in favor of the Agent pledging the stock of
PSC.
"Fixed Rate" shall have the meaning ascribed thereto in Section 2.4(c)
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hereof.
"Fixed Rate Tranche" shall have the meaning ascribed thereto in
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Section 2.4(c) hereof.
"Notice of Fixed Rate Election" shall have the meaning ascribed
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thereto in Section 2.4(d) hereof.
"One Month Eurodollar Rate" with respect to each day during each
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Interest Period of one calendar month (as adjusted in accordance with Section
2.4(a) hereof) pertaining to a Eurodollar Loan shall mean, a rate per annum
determined for such day equal to the sum of (a) the Eurodollar Assessment Rate
at such time and (b) the quotient of the Eurodollar Base Rate for
such Interest Period divided by (x) one hundred percent minus (y) the
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Eurocurrency Reserve Requirements (rounded upward to the nearest 1/16th of 1%).
"PSC" shall mean Pameco Securitization Corporation, a Delaware
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corporation.
"Receivable" shall have the meaning ascribed thereto in Annex X to the
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Transfer Agreement and the Receivables Purchase Agreement.
"Receivables Purchase Agreement" means the Receivables Purchase and
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Servicing Agreement, dated as of April 29, 1996 among PSC, as Seller, Redwood
Receivables Corporation, as Purchaser, Pameco Corporation, as Servicer and
General Electric Capital Corporation, as Operating Agent and Collateral Agent.
"Transfer Agreement" means the Receivables Transfer Agreement, dated
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as of April 29, 1996 between Pameco Corporation and PSC.
(b) The chart contained in the definition of "Applicable Margin" in
Section 1 of the Credit Agreement is amended in its entirety to read as follows:
Period Index Rate Loans Eurodollar Loans
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Adjusted Interest Rate Coverage 0.00 2.25
Ratio less than 2.75 to 1.0
Adjusted Interest Rate Coverage 0.00 2.00
Ratio equal to or greater than
2.75 to 1.0
(c) The definition of "Loan Documents" in Section 1 of the Credit
Agreement is hereby amended by inserting the words "Company Pledge Agreement,"
immediately after the word "Notes" therein.
(d) The definition of "Subsidiary" in Section 1 of the Credit
Agreement is hereby amended by adding the following sentence to the end thereof:
"Notwithstanding the foregoing, solely for purposes of compliance with
the covenants contained in the second sentence of Section 3.16(a) and
in Sections 5.14, 6.1, 6.2, 6.5, 6.7, 6.14, 6.15 and 6.18 hereof, the
term "Subsidiary" shall not be deemed to include PSC".
(e) The definition of "Termination Date" in Section 1 of the Credit
Agreement is amended by deleting the date "March 1, 1999" in the first line
thereof, and substituting in its place the date "April 29, 2001".
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(f) Section 2.1(a) of the Credit Agreement is hereby amended in its
entirety to read as follows:
Subject to the terms and conditions of this Agreement, each
Lender, severally and not jointly, agrees to make loans to the Company
from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the amount
equal to (i) the lesser of such Lender's Commitment Percentage of (x)
$70,000,000 and (y) the Borrowing Base then in effect minus (ii) such
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Lender's Commitment Percentage of the then outstanding Reimbursement
Obligations; provided that at no time during the Commitment Period may
(i) the aggregate principal amount of loans at any one time
outstanding and advanced against Eligible Inventory exceed $30,000,000
and (ii) the aggregate principal amount of loans outstanding hereunder
plus the aggregate "Capital Investment" outstanding under the
Receivables Purchase Agreement exceed $70,000,000. During the
Commitment Period, the Company may use the Commitments by borrowing,
prepaying and reborrowing, all in accordance with the terms and
conditions hereof.
(f) Section 2.1(b) of the Credit Agreement is hereby deleted in its
entirety.
(h) Section 2.4 of the Credit Agreement is hereby amended in its
entirety to read as follows:
"Section 2.4 Interest on Loans. Notwithstanding anything
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contained herein to the contrary including, without limitation, Sections
2.3, 2.7 and 2.8, the following shall govern with respect to interest on
Loans:
(a) The Company shall pay to the Agent for the account of each
Lender interest on the Loans at the following times: (i) with respect
to Loans bearing interest based upon the One Month Eurodollar Rate, in
arrears for the preceding calendar month, on the first day of each
calendar month and, with respect to each Fixed Rate Tranche, on the
last day of the relevant Interest Period therefor and such earlier
date that the Fixed Rate therefor in effect on the first day of such
Interest Period is no longer applicable to all or a portion of such
Fixed Rate Tranche but only for that portion of the Fixed Rate Tranche
for which such Fixed Rate is no longer applicable; (ii) if not
otherwise paid in full pursuant to clause (i) above, on the
Termination Date; and (iii) if any interest accrues or remains payable
after the Termination Date, upon demand. Whenever any payment to be
made hereunder or under any other Loan Document or on any Loan shall
be stated to be due and payable, or whenever the last day of any
Interest Period would otherwise occur, on a day which is not a
Business Day, such payment shall be made and the last day of such
Interest Period shall occur on the next succeeding Business Day and
such extension of time shall in such case be
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included in computing interest on such payment; provided, however,
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that if such extension would cause a payment of a Fixed Rate Tranche
to be made, or the last day of such Interest Period for a Fixed Rate
Tranche to occur, in the next following calendar month, such payment
shall be made and the last day of such Interest Period shall occur on
the next preceding Business Day. Interest shall be calculated by the
Agent on a daily basis and on the basis of a three hundred sixty (360)
day year, in each case for the actual number of days occurring in the
period for which such interest is payable. Each determination by the
Agent of an interest rate hereunder and each calculation of interest
hereunder shall be conclusive and binding for all purposes, absent
manifest error or bad faith.
(b) Except as provided in paragraph (c) below and Section 2.16
hereof, the Company shall be obligated to pay interest to the Agent
for the account of each Lender on the aggregate outstanding balance of
the Loans from the date made until paid in full at the One Month
Eurodollar Rate in effect for the relevant calendar month, plus the
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Applicable Margin therefor. The One Month Eurodollar Rate shall be
calculated for such calendar month in the manner determined in the
definition thereof and in the definition of Eurodollar Base Rate and
shall, except as provided in paragraph (c) below and Section 2.16
hereof, be applicable to the aggregate outstanding balance of the
Loans for each day in the calendar month for which such rate is
calculated.
(c) Provided that no Default or Event of Default has occurred and
is continuing, and subject to the terms and conditions set forth
herein, the Company may elect in the manner provided in paragraph (d)
below that the entire principal amount of the Loans, or a part thereof
(any such entire principal amount or part thereof, a "Fixed Rate
Tranche"), bear interest at a fixed rate (each such rate, a "Fixed
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Rate") for such one, two or three calendar month Interest Period as
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the Company shall select equal to the Eurodollar Rate (as in effect
for such one, two or three month Interest Period) plus the Applicable
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Margin therefor; provided that (i) each Fixed Rate Tranche for any
specific Interest Period of one, two or three calendar months at a
specific Fixed Rate, shall be in a minimum principal amount of
$1,000,000 or a whole multiple of $100,000 in excess thereof; (ii) no
Interest Period shall extend beyond the Termination Date; (iii) Fixed
Rate Tranches shall be in amounts that the Company reasonably
anticipates will not exceed the outstanding principal amount of the
Loans owing by the Company at any time during the Interest Period
selected by the Company; (iv) the principal amount of the Fixed Rate
Tranche to which any one, two or three month Interest Period relates
shall not be reduced, by payment, prepayment or otherwise, prior to
the last day of such Interest Period, unless such payment or
prepayment is accompanied by payment of the amounts specified in
Section 2.9 hereof; and (v) no more than 5 Interest Periods of two or
three calendar months shall be in effect at any time.
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(d) Subject to the requirements set forth in paragraph (c) above
and except as provided in Section 2.16 hereof, the Company may, by
written notice to the Agent delivered not later than the second
Business Day preceding the first day of which commences an Interest
Period selected by the Company for one, two or three calendar months
in respect of a Fixed Rate, elect that a Fixed Rate Tranche with
respect to any or all of the Loans bear interest at a Fixed Rate. Each
such notice (a "Notice of Fixed Rate Election") shall be substantially
in the form of Exhibit 2.4 hereto and shall specify (i) the amount of
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the Fixed Rate Tranche as to which such election is made and (ii) the
duration of the Interest Period with respect to such Fixed Rate
Tranche. The Agent and Lenders shall be entitled to rely upon and
shall be fully protected under this Agreement in relying upon any
Notice of Fixed Rate Election believed by the Agent to be genuine and
to assume that the persons executing and delivering the same were duly
authorized unless the responsible individual acting thereon for the
Agent shall have actual notice to the contrary. In the event that the
Company shall fail to give a new Notice of Fixed Rate Election with
respect to any Fixed Rate Tranche in accordance with this paragraph
(d) the entire principal amount of such Fixed Rate Tranche shall
thereafter bear interest based upon the One Month Eurodollar Rate as
provided in paragraph (b) above, commencing with the last day of the
Interest Period applicable to such Fixed Rate Tranche, unless and
until the Company shall thereafter give a new Notice of Fixed Rate
Election in accordance with this paragraph (d).
(e) During such time as any Default or Event of Default shall
have occurred and be continuing, amounts owing hereunder (including,
without limitation, interest and other amounts) shall bear interest at
a rate per annum equal to the rate that would otherwise be applicable
thereto pursuant to the foregoing provisions of this subsection 2.4
plus 2% from the date of such Default or Event of Default until such
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amount is paid in full (after as well as before judgment).
(f) The Company hereby authorizes the Agent to borrow on behalf
of the Company under this Agreement at any time and from time to time
(without any prior notice to or demand upon the Company) in order to
pay interest, fees and expenses owing under this Agreement."
(g) Loans which bear interest based upon the One Month
Eurodollar Rate shall not be subject to the indemnification provisions
contained in Section 2.9 hereof.
(i) Section 2.6(e) of the Credit Agreement is hereby amended by (i)
replacing the date "March 31, 1996" in the fifth line thereof with the date
"April 29, 1999", (ii) replacing the amount "$300,000" in the last line thereof
with the amount "$150,000" and (iii) adding the following sentence at the end
thereof:
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"The foregoing prepayment fee shall not be applicable if the
Commitments are terminated and the Loans are prepaid in full (i) as a
result of a refinancing from the proceeds of an initial public
offering by the Company of its stock or (ii) after an increase of two
percent (2%) or more in the effective rate of interest payable by the
Company hereunder which increase is attributable solely to the
requirement to pay increased costs pursuant to Section 2.22 hereof."
(j) Section 2.8 of the Credit Agreement is amended in its entirety to
read as follows: "[INTENTIONALLY OMITTED]"
(k) Section 2.13 of the Credit Agreement is hereby amended in its
entirety to read as follows:
"The Company shall pay to the Agent an unused line fee as set forth in
that certain Fee Letter, dated as of April 29, 1996, from General
Electric Capital Corporation and Redwood Receivables Corporation to
the Company and Pameco Securitization Corporation."
(l) Section 6.1 of the Credit Agreement is hereby amended, by adding
the phrase "and under the Transfer Agreement" at the end of clause (a) thereof.
(m) Section 6.2 of the Credit Agreement is hereby amended by (i)
deleting the word "and" at the end of clause (f) thereof and inserting the
following at the end of clause (g) thereof: "and (h) Liens created pursuant to
the Transfer Agreement or the Purchase Agreement".
(n) Section 6.3 of the Credit Agreement is hereby amended by adding
the following phrase after the term "6.7" in the second line thereof:
", except for the transactions described in the Transfer Agreement."
(o) Section 6.4(d) of the Credit Agreement is hereby amended by (i)
deleting the word "and" in the fourth line thereof and (ii) adding the following
after the word "Notes" in the fifth line thereof:
"(v) on the maturity date thereof, principal and interest on the
Subordinated Promissory Note, dated February 28, 1995 by Holdings in
favor of Xxxxx X. Xxxxxx, in the original principal amount of $43,449
and (vi) on the maturity date thereof, principal and interest on the
Junior Subordinated Promissory Note, dated March 19, 1992, by Holdings
in favor of Xxxxx X. Xxxxxx, in the original principal amount of
$28,558 as amended to date."
(p) Section 6.6 of the Credit Agreement is hereby amended by (i)
deleting the word "and" in the tenth line thereof and (ii) adding the following
clause at the end thereof: "and (c) pursuant to the terms of the Transfer
Agreement or the Purchase Agreement".
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(q) Section 6.7 of the Credit Agreement is hereby amended by deleting
the word "and" at the end of clause (c) thereof, and inserting the following
prior to the period at the end of clause (d) thereof:
"; and (e) the sale of Receivables pursuant to the Transfer Agreement
and the Receivables Purchase Agreement"
(r) Section 6.9 of the Credit Agreement is hereby amended in its
entirety to read as follows: "[INTENTIONALLY OMITTED]".
(s) Section 6.14 of the Credit Agreement is hereby amended by adding
the following proviso at the end thereof:
"; provided, however, that nothing in this Section 6.14 shall be
deemed to prohibit the transactions described in the Transfer
Agreement"
(t) Section 6.18 of the Credit Agreement is hereby amended by adding
the phrase "and the transactions described in the Transfer Agreement" at the end
thereof.
(u) Section 6.21 of the Credit Agreement is hereby amended by
deleting the word "The" at the beginning thereof, and substituting the following
clause in its place:
"Except in connection with Accounts transferred pursuant to the
Transfer Agreement, the"
(v) Subsection 7(r) of the Credit Agreement is hereby amended in its
entirety to read as follows: "[INTENTIONALLY OMITTED]".
(w) Section 9.3 of the Credit Agreement is hereby amended by deleting
the address of General Electric Capital Corporation where it appears therein and
replacing it with the following:
"General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Vice President -
Portfolio Commercial Finance"
(x) Schedule 1 to the Credit Agreement is hereby amended by deleting
the amount "$60,000,000" where it appears therein, and substituting in its place
the amount "$30,000,000".
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(y) Exhibit B (form of Borrowing Base Certificate) to the Credit
Agreement is hereby amended in its entirety to read as Exhibit B attached
hereto.
SECTION Conditions Precedent.
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(a) The effectiveness of this Amendment is subject to the conditions
precedent that the Agent shall have received each of the following:
(i) This Amendment delivered by the Borrower, the Lenders and
the Agent.
(ii) A certificate of an officer of the Borrower dated the date
of this Amendment, and certifying (A) that attached thereto is a true and
complete copy of a resolution of the Board of Directors of the Borrower
authorizing the execution, delivery and performance of this Amendment, the
Borrower Pledge Agreement (as defined below) and all other documents
required or necessary to be delivered hereunder and that such resolution
has not been modified, rescinded or amended and is in full force and
effect, and (B) as to the incumbency and specimen signature of each
Person's officers executing this Amendment and all other documents required
or necessary to be delivered hereunder.
(iii) A Pledge Agreement (the "Company Pledge Agreement"), duly
executed by the Borrower, in the form of Exhibit A hereto.
(iv) A Confirmation of Guarantee, duly executed by the Parent,
in the form of Exhibit C hereto.
(v) Such other approvals, opinions or documents, in form and
substance satisfactory to the Agent, as the Agent may reasonably request.
SECTION 4. Confirmation of Agreement and Loan Documents. Except as
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herein expressly amended, the Credit Agreement and each of the other documents
executed in connection therewith are ratified and confirmed in all respects and
shall remain in full force and effect in accordance with its terms. Each
reference in the Credit Agreement to "this Agreement" and in each of the other
documents executed in connection therewith to the "Credit Agreement" shall mean
the Credit Agreement as amended by this Amendment, and as hereinafter amended or
restated.
SECTION 5. Borrower's Representations and Warranties. The Borrower
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represents and warrants that:
(a) this Amendment and the Company Pledge Agreement have been duly
authorized, executed and delivered by the Borrower pursuant to its corporate
power;
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(b) this Amendment and the Company Pledge Agreement constitute the
legal, valid and binding obligation of the Borrower; and
(c) after giving effect to the amendments referred to herein, there
does not exist any Default or Event of Default.
SECTION 6. Expenses. The Borrower agrees to pay on demand all
reasonable fees and out-of-pocket expenses of the Lenders and the Agent incurred
in connection with the preparation, execution and delivery of this Amendment and
any documents referred to herein.
SECTION 7. Counterparts. Delivery of an executed counterpart of a
signature page to this Amendment by facsimile shall be effective as delivery of
a manually executed counterpart of this Amendment. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the Borrower, the Lenders and Agent have caused
this Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
PAMECO CORPORATION,
as Borrower
By:____________________________
Name: Xxxxxxxx X. Xxxxxxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
Individually and as Agent
By:_______________________________
Name: Xxxxx X. Xxxxxxx
Title: Duly Authorized Signatory
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EXHIBIT A
CONFIRMATION OF GUARANTEE
Reference is made to the Guarantee (the "Guarantee"), dated as of
March 19, 1992 made by Pameco Holdings, Inc., a Delaware corporation (the
"Guarantor") in favor of General Electric Capital Corporation, a New York
corporation, as agent for the Lenders (in such capacity, the "Agent"), in which
the Guarantor unconditionally and irrevocably guaranteed to the Agent and
Lenders the prompt and complete payment and performance of the "Obligations" as
such term is defined in the Credit Agreement, dated as of March 19, 1992 (the
"Credit Agreement"), among Pameco Corporation, the Lenders and the Agent;
capitalized terms used but not defined herein shall have the meanings given such
terms in the Credit Agreement.
Notwithstanding Amendment No. 6, dated as of the date hereof, among
Pameco Corporation, the Lenders and the Agent, the Guarantor hereby irrevocably
and unconditionally confirms to the Agent that the Guarantee remains in full
force and effect and that the Guarantor continues to irrevocably guarantee
payment, when due, of the Obligations.
Dated: As of April 29, 1996
PAMECO HOLDINGS, INC.
By:_____________________________
Name:
Title:
