Exhibit 10.18
EXECUTION COPY
AMENDMENT NO. 1
TO SECURITIZATION AGREEMENTS
AMENDMENT NO. 1, dated as of January 24, 1997, among PAMECO
SECURITIZATION CORPORATION ("PSC"), PAMECO CORPORATION ("Pameco"), REDWOOD
RECEIVABLES CORPORATION ("Redwood") and GENERAL ELECTRIC CAPITAL CORPORATION
("GECC").
WHEREAS, Pameco, as originator (in such capacity, the "Originator")
and PSC are parties to a Receivables Transfer Agreement, dated as of April 29,
1996 (as heretofore amended, supplemented or otherwise modified, the "Transfer
Agreement");
WHEREAS, PSC, as seller (in such capacity, the "Seller"), Redwood, as
purchaser (in such capacity, the "Purchaser"), GECC, as operating agent (in such
capacity, the "Operating Agent") and collateral agent (in such capacity, the
"Collateral Agent") and Pameco, as servicer (in such capacity, the "Servicer")
are parties to a Receivables Purchase and Servicing Agreement, dated as of April
29, 1996 (as heretofore amended, supplemented or otherwise modified, the
"Purchase Agreement");
WHEREAS, Redwood and GECC are parties to a Liquidity Loan Agreement,
dated as of April 29, 1996 (as heretofore amended, supplemented or otherwise
modified, the "Liquidity Agreement"; together with the Transfer Agreement and
the Purchase Agreement, the "Securitization Agreements"); and
WHEREAS, the parties hereto desire to amend the Securitization
Agreements and certain ancillary documents and agreements referred to therein in
the manner set forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. All capitalized terms used herein, unless
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otherwise defined, are used as defined in the Purchase Agreement.
ARTICLE II
AMENDMENTS TO TRANSFER AGREEMENT
SECTION 2.1 AMENDMENTS TO SECTION 2.01. (a) Section 2.01(a) of the
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Transfer Agreement is amended by deleting the phrase "without recourse, except
as specifically provided herein" which appears in the second and third lines
therein.
(b) Section 2.01(c) of the Transfer Agreement is amended by deleting
the word "such" which appears in the first line thereof, and substituting in
lieu thereof the word "the", and deleting the phrase "on or before such Transfer
Date" which appears at the end of such Section 2.01(c).
(c) Section 2.01(d) of the Transfer Agreement is amended by deleting
such provision in its entirety and substituting in lieu thereof the following:
"(d) On and after each Transfer Date hereunder, PSC
shall, upon payment by PSC in accordance with Section 2.01(c)
hereof in the case of Sold Receivable, own the Transferred
Receivables and the Originator shall not take any action
inconsistent with such ownership, nor shall the Originator claim
any ownership interest in any such Transferred Receivables."
(d) Section 2.01(e) of the Transfer Agreement is amended by adding at
the end thereof the following sentence: "Each sale and contribution by the
Originator to PSC is made without recourse to the Originator, except as set
forth in Section 4.404 hereof."
SECTION 2.2 AMENDMENTS TO SECTION 2.03. (a) Section 2.03 of the
--------------------------
Transer Agreement is amended by:
(i) adding at the end of the first sentence of such Section
the following phrase:
"and there is no event that has occurred and is continuing which
constitutes a Termination Event or would constitute a Termination Event but for
the requirement that notice be given or time elapse or both":
(ii) deleting from the second sentence of such Section the
phrase "or be added, as the case may be," and adding the phrase "such
Subsidiary or Affiliate" after the word "add" as it appears therein; and
(iii) deleting from the third sentence of such Section the word
"section" and substituting in lieu thereof the words "Section 2.03".
SECTION 2.3 AMENDMENT TO SECTION 4.01. Section 4.01(b) (vii) of the
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Transfer Agreement is amended by adding the phrase "allows the holder thereof to
bring suit or otherwise enforce its remedies against an Obligor through judicial
process," after the word "Receivable" which appears in the first line therein.
SECTION 2.4 AMENDMENTS TO SECTION 4.02. (a) Section 4.02(h)(i) of
--------------------------
the Transfer Agreement is amended by adding the phrase "or its ability to
perform its obligations hereunder" after the word "Originator" which appears in
the last line therein.
(b) Section 4.02(h)(iii) of the Transfer Agreement is amended by
adding the phrase "or its ability to perform its obligations hereunder" after
the word "Originator" which appears in the last line therein.
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(c) Section 4.02(h)(iv) of the Transfer Agreement is amended by
adding the phrase ", or written threat to commence any proceedings," after the
word "proceedings" which appears in the first line therein.
(d) Section 4.02(h)(v) of the Transfer Agreement is amended by adding
the phrase "or its ability to perform its obligations hereunder" after the word
"Originator" which appears in the last line therein.
(e) Section 4.02(h)(vi) of the Transfer Agreement is amended by
adding the phrase "or its ability to perform its obligations hereunder" after
the word "Originator" which appears in the last line therein.
SECTION 2.5 AMENDMENT TO SECTION 7.04. Section 7.04(a) of the
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Transfer Agreement is hereby amended by deleting therefrom the amount
"$40,000,000" as it appears therein and substituting therefor the amount
"$50,000,000".
SECTION 2.6 NEW PROMISSORY NOTE. On the effective date of this
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Amendment No. 1, Pameco shall execute and delivery to PSC a Promissory Note (the
"New Promissory Note") substantially in the form of Annex A hereto, in
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substitution and exchange for, but not in payment of, that certain promissory
note of Pameco dated May 1, 1996 made in favor of PSC in the principal amount of
$40,000,000.
ARTICLE III
AMENDMENTS TO PURCHASE AGREEMENT
SECTION 3.1 AMENDMENT TO SECTION 2.03(A). Section 2.03(a) of the
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Purchase Agreement is amended by deleting the last sentence of that paragraph
and substituting in lieu thereof the following:
"Availability will be determined by the Operating Agent
based on the most recent Investment Base Certificate
delivered to the Purchaser and the Operating Agent and such
other information as may then be available to the Operating
Agent including, without limitation, any information from
any audit performed pursuant to Section 5.01(f)."
SECTION 3.2 AMENDMENT TO SECTION 2.04. Section 2.04(d) of the
-------------------------
Purchase Agreement is amended by deleting the phrase "Outstanding Balance" which
appears in therein and substituting in lieu thereof the phrase "Billed Amount
less all payments received from the Obligor with respect thereto".
SECTION 3.3 AMENDMENT TO SECTION 4.02. (a) Section 4.02(b) of the
-------------------------
Purchase Agreement is amended by adding the phrase "and is able to bring suit or
otherwise enforce its remedies through judicial process against each Obligor of
a Transferred Receivable" to the end thereof.
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(b) Section 4.02(k) of the Purchase Agreement is amended by adding
the phrase "each of the Originator and" before the phrase "the Servicer" each
time such phrase appears therein.
SECTION 3.4 AMENDMENT TO SECTION 6.02. Section 6.02(c) of the
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Purchase Agreement is amended by deleting the phrase "and after" and adding the
phrase "and any date thereafter" after the term "Facility Termination Date".
SECTION 3.5 AMENDMENT TO SECTION 6.05. (a) Section 6.05(b)(viii) of
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the Purchase Agreement is amended by deleting the phrase "(c)(i) - (c)(v)" and
substituting in lieu thereof the phrase "(c)(i) - (c)(vi)".
(b) Section 6.05(c) of the Purchase Agreement is amended by:
(i) adding a new clause (v) to read: "(v) to the Collateral
Account, an amount equal to (A) accrued and unpaid Daily Yield minus (B)
the sum of (i) amounts paid pursuant to Section 6.05(c)(i)(A), (ii) amounts
paid pursuant to Section 6.05(c) (ii)(A), and (iii) amounts amounts paid
under Section 6.05(c)(iv)(A) to the extent not paid pursuant to Section
6.05(b)(vi)" at the end of clause (v) thereof;
(ii) redesignating clauses (v) and (vi) as (vi) and (vii),
respectively; and
(iii) changing the reference from "(c) (v)" to "(c) (vi)" in
clause (vii) (after redesignation).
(c) Section 6.05(d) of the Purchase Agreement is amended by deleting
such paragraph in its entirely and substituting in lieu thereof the following:
"(d) on the Facility Termination Date and after any date
thereafter, on each such date by no later than 11:00 a.m. the
Operating Agent shall transfer all amounts then on deposit in the
Retention Account to the Collateral Account;"
SECTION 3.6 AMENDMENT TO SECTION 14.06. Section 14.06 of the
--------------------------
Purchase Agreement is amended by adding a new sentence at the end thereof to
read as follows:
"Whenever the Seller or the Servicer, as the case may be, is required
or permitted to obtain the consent of the Purchaser under this
Agreement, such consent shall be obtained only in the form of a prior
written consent of the Purchaser."
SECTION 3.7 AMENDMENT TO SCHEDULE 3. Effective as of March 1, 1997,
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Schedule 3 to the Purchase Agreement is amended by deleting from the definition
of "Daily Margin" and "Daily Default Margin" the number "2.75" as it appears in
two place therein and substituting in lieu thereof the number "2.40".
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SECTION 3.8 AMENDMENT TO EXHIBIT H. Exhibit H to the Purchase
----------------------
Agreement is amended by deleting the chart as it appears in Section 1(d) of such
Exhibit and substituting in lieu thereof the following chart:
FISCAL YEAR ENDING AMOUNT
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February 28, 1997 $12,500,000
February 28, 1998 17,500,000
February 28, 1999 21,000,000
Each Fiscal Year ending thereafter 24,500,000
SECTION 3.9 AMENDMENT TO EXHIBIT I. Exhibit I to the Purchase
----------------------
Agreement is amended by deleting the percentage "7.5%" from clause (i) of such
Exhibit and substituting in lieu thereof the percentage "9.2%".
ARTICLE IV
AMENDMENTS TO ANNEX X
SECTION 4.1 AMENDMENTS TO ANNEX X. Annex X is hereby amended by:
(a) deleting from the definition of "Fee Letter" the date "April
29, 1996" and substituting therefor the date "January 24, 1997";
(b) deleting from the definition of "Final Purchase Date" the
date "April 29, 2001" and substituting therefor the date "November 21,
2001";
(c) deleting from the definition of "Maximum Purchase Limit" the
amount $40,000,000" and substituting therefor the amount "50,000,000";
(d) deleting the definition of "Purchase Discount Rate" and
substituting thereof the following definition:
"Purchase Discount Rate" means a rate, as of any date, equal to 100%
----------------------
minus the greater of (a)(i) the sum of the Loss Reserve Ratio and the
Dilution Reserve Ratio minus (ii) 30%, or (b) 15%."; and
(e) deleting the definition of "Purchase Excess" and
substituting thereof the following definition:
"Purchase Excess" means, for any date, the extent to which the
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then Capital Investment exceeds the Availability as determined, as of such
date, by the Operating Agent based on the most recently submitted
Investment Base Certificate delivered to the Purchaser and the Operating
Agent and such other information as may then be available to the Operating
Agent including without limitation any information from any audit performed
pursuant to Section 5.01(f) of the Purchase Agreement."
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ARTICLE V
AMENDMENTS TO LIQUIDITY AGREEMENT, ETC.
SECTION 5.1 AMENDMENT TO SECTION 1.01. The definition of "Liquidity
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Commitment" appearing in Section 1.01 of the Liquidity Agreement is amended by
deleting the number "$41,200,000" appearing therein and by inserting, in lieu
thereof, the number "$51,500,000".
SECTION 5.2 AMENDMENT TO RFC SUPPLEMENT. That certain RFC Supplement
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dated as of April 29, 1996 between Redwood and GECC (the "RFC Supplement") is
hereby amended as follows:
(a) by deleting the number "$40,000,000" appearing therein and by
inserting, in lieu thereof, the number "$50,000,000";
(b) by deleting clause (ii) of the definition "LOC Percentage"
appearing in Annex 1 thereof in its entirety and by inserting, in lieu
thereof the following: "(ii) 30%; and"; and
(c) by deleting clauses (i) and (ii) appearing in clause (y) of Annex
1 thereof in their entirety and by inserting, in lieu thereof the
following: "30%".
SECTION 5.3 AMENDMENT TO FORM OF LIQUIDITY NOTES. Exhibit C to the
------------------------------------
Liquidity Agreement is hereby amended by deleting such Exhibit in its entirety
and by inserting, in lieu thereof, a new Exhibit C in the form of Annex B
hereto.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1 REPRESENTATIONS AND WARRANTIES OF PSC AND PAMECO.
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Each of the PSC and Pameco represents and warrants that:
(a) each of this Amendment No. 1 and the New Promissory Note has been
duly authorized, executed and delivered by each such party which is a signatory
thereto;
(b) each of this Amendment No. 1 and the New Promissory Note
constitutes the legal, valid and binding obligation of each such party which is
a signatory thereto;
(c) each of the representations and warranties of such party set
forth in the Securitization Agreements is true and correct as of the Amendment
Effective Date (as defined below); provided, that references in the
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Securitization Agreements to the Purchase Agreement and to the Transfer
Agreement, shall be deemed references to the Purchase Agreement as amended by
this Amendment No. 1 and to the Transfer Agreement as amended by this Amendment
No.1, respectively, and references to the Pameco Note shall be deemed references
to the New Promissory Note.
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SECTION 6.2 REPRESENTATIONS AND WARRANTIES OF REDWOOD. Redwood
-----------------------------------------
represents and warrants that:
(a) this Amendment No. 1 has been duly authorized, executed and
delivered by Redwood;
(b) this Amendment No. 1 constitutes the legal, valid and binding
obligation of Redwood; and
(c) each of the representations and warranties of Redwood party set
forth in the Securitization Agreements is true an correct as of the Amendment
Effective Date (as defined below); provided, that references in the
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Securitization Agreements to the Purchase Agreement and to the Transfer
Agreement, shall be deemed references to the Purchase Agreement as amended by
this Amendment No. 1 and to the Transfer Agreement as amended by this Amendment
No. 1 respectively, and references to the Pameco Note shall be deemed references
to the New Promissory Note.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1 CONDITIONS PRECEDENT. This Amendment No. 1 shall become
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effective (the actual date of such effectiveness, the "Amendment Effective
-------------------
Date") as of the date first above written subject to the satisfaction of the
following conditions precedent: that the Purchaser, the Operating Agent and the
Collateral Agent shall each have received the following, in form and substance
satisfactory to the Operating Agent:
(a) Counterparts hereof shall have been duly executed and
delivered by the parties hereto;
(b) PSC shall have received the New Promissory Note, executed and
delivered by a duly authorized officer of Pameco;
(c) the Operating Agent shall have received fees as required in the
Fee Letter dated January 24, 1997 from the Operating Agent to Redwood (the "New
Fee Letter");
(d) the Purchaser, Operating Agent and Collateral Agent shall have
received the executed legal opinion (including confirmation of true sale
opinion) of Xxxxxxxxxx & Xxxx, L.L.P., counsel to the Seller and the Servicer,
in form and substance satisfactory to the Operating Agent;
(e) the Operating Agent shall have received a certificate of the
Secretary or an Assistant Secretary of each of the Seller and the Servicer,
dated as of the Amendment Effective Date, and certifying (i) the names and true
signatures of the officers authorized on its behalf to sign this Amendment No.
1, (ii) a copy of the such party's certificate of incorporation and by-laws, and
(iii) a copy of the resolutions of the board of directors of such party
approving this Amendment No. 1 and the related transactions to which it is a
party, all in form and substance
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satisfactory to the Operating Agent. Such certificate shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded as of the date of such certificate;
(f) the Operating Agent shall have received an Officer's Certificate
from each of the Seller and the Servicer in the forms of Annexes C-1 and C-2
hereto, respectively;
(g) PSC shall have received a certificate of the Secretary or an
Assistant Secretary of the Originator, dated as of the Amendment Effective Date,
and certifying (i) the names and true signatures of the officers authorized on
its behalf to sign this Amendment No. 1 and the New Promissory Note, (ii) a copy
of the Originator's certificate of incorporation and by-laws, and (iii) a copy
of the resolutions of the board of directors of the Originator approving this
Amendment No. 1 and the related transactions to which it is a party. Such
certificate shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded as of the date of such certificate;
(h) the Operating Agent shall have received rating agency letters
from Xxxxx'x Investors Service and Standard & Poor's Rating Services affirming
the rating of the Redwood commercial paper as "Prime-1" and "A-1+",
respectively, after giving effect to this Amendment No. 1 and consummation of
the transactions contemplated hereby; and
(i) PSC and Pameco shall have taken such other actions and provided
such documentation as the Operating Agent may request.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 COUNTERPARTS. This Amendment No. 1 may be executed on
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any number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
SECTION 8.2 GOVERNING LAW. THIS AMENDMENT NO. 1 SHALL BE GOVERNED
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BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
SECTION 8.3 EXPENSES. Pameco agrees to pay and reimburse the
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Operating Agent for all of its out-of-pocket costs and expenses incurred in
connection with the negotiation, preparation, execution, and delivery of this
Amendment No. 1, including the reasonable fees and expenses of counsel to the
Operating Agent and the Collateral Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
1 to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
PAMECO SECURITIZATION CORPORATION
By:_____________________________________
Title: President
REDWOOD RECEIVABLES CORPORATION
By:_____________________________________
Title:
PAMECO CORPORATION
By:_____________________________________
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
as Operating Agent and Collateral
Agent
By:_____________________________________
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
as Liquidity Agent
By:_____________________________________
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
as Letter of Credit Agent and Letter
of Credit Provider
By:_____________________________________
Title:
9
ANNEX A
[NEW FORM OF PAMECO NOTE]
10
ANNEX B
[NEW FORM OF LIQUIDITY NOTE]
11
ANNEX C-1
FORM OF OFFICER'S CERTIFICATE OF SELLER
---------------------------------------
Pameco Securitization Corporation
Officer's Certificate
I, [Name of Officer], the duly elected [Insert Title] of Pameco
Securitization Corporation (the "Seller"), hereby certify pursuant to Section
7.1(f) of Amendment No. 1 to Securitization Agreements, dated as of January 24,
1997 ("Amendment No. 1"; capitalized terms used but not defined in this
Officer's Certificate having the meaning set forth in Amendment No. 1), between
the Seller, Pameco Corporation, Redwood Receivables Corporation (the
"Purchaser") and General Electric Capital Corporation, and for the benefit of
the Purchaser, the Operating Agent and General Electric Capital Corporation, as
follows:
(1) after giving effect to the effectiveness of the Purchase
Agreement, no Termination Event or Incipient Event will have occurred and be
continuing; and
(2) the representations and warranties of the Seller contained in
Section 4.01 of the Purchase Agreement, in the Transfer Agreement and in any
other document, certificate or financial or other statement delivered by the
Seller in connection with the Purchase Agreement or the Transfer Agreement are
true and correct in all material respects and with the same force and effect as
though such representations and warranties had been made as of such date, except
to the extent any such representations and warranties relate solely to an
earlier date.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this 24th day of January, 1997.
PAMECO SECURITIZATION CORPORATION
By:_________________________________________________
Name:
Title:
12
ANNEX C-2
FORM OF OFFICER'S CERTIFICATE OF SELLER
---------------------------------------
Pameco Securitization Corporation
Officer's Certificate
I, [Name of Officer], the duly elected [Insert Title] of Pameco
Securitization Corporation (the "Servicer"), hereby certify pursuant to Section
7.1(f) of Amendment No. 1 to Securitization Agreements, dated as of January 24,
1997 ("Amendment No. 1"; capitalized terms used but not defined in this
Officer's Certificate having the meaning set forth in Amendment No. 1), between
Pameco Securitization Corporation, the Servicer, Redwood Receivables Corporation
(the "Purchaser") and General Electric Capital Corporation, and for the benefit
of the Purchaser, the Operating Agent and General Electric Capital Corporation,
as follows:
(1) after giving effect to the effectiveness of the Purchase
Agreement, no Termination Event or Incipient Event will have occurred and be
continuing; and
(2) the representations and warranties of the Seller contained in
Section 4.01 of the Purchase Agreement, in the Transfer Agreement and in any
other document, certificate or financial or other statement delivered by the
Seller in connection with the Purchase Agreement or the Transfer Agreement are
true and correct in all material respects and with the same force and effect as
though such representations and warranties had been made as of such date, except
to the extent any such representations and warranties relate solely to an
earlier date.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this 24th day of January, 1997.
PAMECO CORPORATION
By:_________________________________________________
Name:
Title:
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PAMECO NOTE
$50,000,000.00 May 1, 1996
Amended and Restated
January 24, 1997
FOR VALUE RECEIVED PAMECO CORPORATION, a Delaware corporation
("Pameco") hereby promises to pay to PAMECO SECURITIZATION CORPORATION (the
"Lender"), for its account, the principal sum of FIFTY MILLION DOLLARS
($50,000,000) (or such lesser amount as shall equal the aggregate unpaid
principal amount of the PRC Loans made by the Lender to Pameco under the
Transfer Agreement referred to below), in lawful money of the United States of
America and in immediately available funds immediately on the demand of the
Lender.
The date, amount and interest rate, of each PRC Loan made by the
Lender to Pameco, and each payment made on account of the principal thereof,
shall be recorded by the Lender on its books and, prior to any transfer of this
Note, endorsed by the Lender on the schedule attached hereto or any continuation
thereof.
This Note is the Pameco Note referred to in the Receivables Transfer
Agreement (as modified and supplemented and in effect from time to time, the
"Transfer Agreement") dated as of the date hereof by and among Pameco and the
Lender and evidences PRC Loans made by the Lender thereunder. Capitalized terms
used in this Note and not defined herein have the respective meanings assigned
to them in the Transfer Agreement.
The Transfer Agreement provides for prepayments of PRC Loans upon the
terms and conditions specified therein.
Notwithstanding any other provisions contained in this Note, if at any
time the rate of interest payable by Pameco under this Note, when combined with
any and all other charges provided for in this Note, in the Purchase Agreement
or in any other document (to the extent such other charges would constitute
interest for the purpose of any applicable law limiting interest that may be
charged on this Note), exceeds the highest rate of interest permissible under
applicable law (the "Maximum Lawful Rate"); then so long as the Maximum Lawful
Rate would be exceeded the rate of interest under this Note shall be equal to
the Maximum Lawful Rate. If at any time thereafter the rate of interest payable
under this Note is less than the Maximum Lawful Rate, Pameco shall continue to
pay interest under this Note at the Maximum Lawful Rate until such time as the
total interest paid by Pameco is equal to the total interest that would have
been paid had such applicable law not limited the interest rate payable under
this Note. In no event event shall the total interest received by the Lender
under this Note exceed the amount which the Lender could lawfully have received
had the interest due under this Note been calculated since the date of this Note
at the Maximum Lawful Rate.
If any payment under this Note falls due on a day which is not a
Business Day, then such due date shall be extended to the next succeeding
Business Day and interest (calculated
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at the Pameco Interest Rate for each day during the period then ending) shall be
payable on the principal so extended.
This Note is being issued in replacement of and substitution for that
certain Pameco Note dated May 1, 1996 by Pameco to the order of the Lender in
the principal amount of $40,000,000. In addition to the indebtedness evidenced
by this Note, this Note shall also evidence any accrued and unpaid interest on
such preceding note.
Pameco expressly waives presentment, demand, diligence, protest and
all notices of any kind whatsoever with respect to this Note.
This Note is made and delivered in New York, New York and shall be
governed by, and construed in accordance with, the internal laws (without
application of its conflict of laws provisions) of the State of New York.
IN WITNESS WHEREOF, Pameco has caused this Note to be signed and
delivered by its duly authorized officer as of the date set forth above.
Very truly yours,
PAMECO CORPORATION
By:________________________________
Name:
Title:
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PROMISSORY NOTE
REDWOOD RECEIVABLES CORPORATION
$51,500,000.00 May 1, 1996
Amended and Restated
January 24, 1997
FOR VALUE RECEIVED, REDWOOD RECEIVABLES CORPORATION, a Delaware
corporation (the "Company"), promises to pay to GENERAL ELECTRIC CAPITAL
CORPORATION (the "Liquidity Lender"), or registered assigns, the principal sum
of FIFTY ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($51,500,000) or, if less,
the unpaid principal amount of the aggregate loans ("Liquidity Loans") made by
the Liquidity Lender to the Company pursuant to the Liquidity Loan Agreement,
dated as of April 29, 1996 (as amended, the "Liquidity Loan Agreement"), between
the Company, the Liquidity Lender and General Electric Capital Corporation as
agent for the Liquidity Lender (as agent, the "Liquidity Agent") on the dates
specified in Sections 2.02(c), 4.02 and 4.03 of the Liquidity Loan Agreement,
and to pay interest on the unpaid principal amount of the Note outstanding from
time to time at the Liquidity Interest Rate provided in the Liquidity Loan
Agreement and on the dates specified in Section 4.01 of the Liquidity Loan
Agreement. Capitalized terms used in this Note and not defined herein have the
respective meanings assigned to them in the Liquidity Loan Agreement.
Notwithstanding any other provisions contained in this Note, if at any
time the rate of interest payable by the Company under this Note, when combined
with any and all other charges provided for in this Note, in the Liquidity Loan
Agreement or in any other document (to the extent such other charges would
constitute interest for the purpose of any applicable law limiting interest that
may be charged on this Note), exceeds the highest rate of interest permissible
under applicable law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be exceeded the rate of interest under this Note shall be
equal to the Maximum Lawful Rate. If at any time thereafter the rate of
interest payable under this Note is less than the Maximum Lawful Rate, the
Company shall continue to pay interest under this Note at the Maximum Lawful
Rate until such time as the total interest paid by the Company is equal to the
total interest that would have been paid had such applicable law not limited the
interest rate payable under this Note. In no event shall the total interest
received by the Liquidity Lender under this Note exceed the amount which the
Liquidity Lender could lawfully have received had the interest due under this
Note been calculated since the date of this Note at the Maximum Lawful Rate.
Payments of the principal of, premium, if any, and interest on this
Note shall be made by the Company to the holder hereof by wire transfer of
immediately available funds by 3:00 p.m. New York City time, in the manner and
at the address specified for such purpose as provided in Section 4.04 of the
Liquidity Loan Agreement, or in such manner or at such other address as the
holder of this Note shall have specified in writing to the Company for such
purpose, without the presentation or surrender of this Note or the making of any
notation on this Note.
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If any payment under this Note falls due on a day which is not a
Business Day, then such due date shall be extended to the next succeeding
Business Day in such locations and interest (calculated at the Interest Rate in
effect for the period then ending) shall be payable on the principal so
extended.
This Note is being issued in replacement of and substitution for that
certain Note dated May 1, 1996 by the Company to the order of the Lender in the
principal amount of $41,200,000. In addition to the indebtedness evidenced by
this Note, this Note shall also evidence any accrued and unpaid interest on such
preceding note.
The Company expressly waives presentment, demand, diligence, protest
and all notices of any kind whatsoever with respect to this Note.
The holder hereof may, subject to the provisions of Article IX of the
Liquidity Loan Agreement, sell, assign, transfer, negotiate, grant
participations in or otherwise dispose of all or any portion of this Note and
the indebtedness evidenced by this Note.
This Note is secured by (i) the security interests assigned and
granted to General Electric Capital Corporation, as collateral agent on behalf
of, among others, the Liquidity Lender and the Liquidity Agent (in such
capacity, the "Collateral Agent") from time to time pursuant to Purchase
Agreements, and (ii) the security interests granted to the Collateral Agent
pursuant to the Collateral Agent Agreement. The holder of this Note is entitled
to the benefits of the Purchase Agreement and the Collateral Agent Agreement and
may enforce the agreements of the Company contained in such agreements and
exercise the remedies provided for by, or otherwise available in respect of,
such agreements, all in accordance with the terms of such agreements. If an
event of Default shall occur and be continuing, the unpaid balance of the
principal of this Note, together with accrued interest, may be declared and
become due and payable in the manner with the effect provided in the Liquidity
Loan Agreement and the Collateral Agent Agreement.
This Note is made and delivered in New York, New York and shall be
governed by, and construed in accordance with, the internal laws (without
application of its conflict of laws provisions) of the State of New York.
IN WITNESS WHEREOF, the company has caused this Note to be signed and
delivered by its duly authorized officer as of the date set forth above.
Very truly yours,
REDWOOD RECEIVABLES CORPORATION
By:__________________________________
Name:
Title:
17
January 24, 1997
Pameco Corporation
World Headquarters
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Pameco Securitization Corporation
0000 Xxxxxx Xxxxx - Xxxxx X
Xxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
We refer to (i) the Receivables Purchase and Servicing Agreement dated
as of April 29, 1996, as amended (the "Purchase Agreement") among Pameco
Securitization Corporation, as seller (the "Seller"), Redwood Receivables
Corporation, as purchaser ("Redwood"), General Electric Capital Corporation, as
operating agent ("GECC"), and Pameco Corporation, as servicer, and (ii) the
Credit Agreement dated as of March 19, 1992, as amended (the "Credit
Agreement"), among Pameco Corporation, the lenders listed therein (the
"Lenders") and GECC, as agent for the Lenders (in such capacity, the "Agent").
Terms not otherwise defined in this letter shall have the meanings assigned to
them under the Purchase Agreement.
This letter is the Fee Letter referred to in the Purchase Agreement
and in the Credit Agreement and sets forth our understanding with respect to
certain fees that are payable by the Seller and Pameco Corporation pursuant to
the Purchase Agreement and the Credit Agreement. This letter supersedes and
replaces that certain Fee Letter among us dated November 21, 1996.
18
Pameco Corporation
Pameco Securitization Corporation -2- January 24, 1997
The parties to this letter agree as follows:
1. The Seller and Pameco Corporation shall pay an Unused Commitment
Fee equal to three-eights of one percent (0.375%) per annum calculated
daily and payable monthly on the amount by which $100,000,000 exceeds the
sum of (i) the outstanding Capital Investment on such date and (ii) the
outstanding "Loans" under the Credit Agreement on such date (such sum, the
"Total Outstandings"), with the Seller being responsible for the Unused
commitment Fee based on that portion of Total Outstandings on each day
representing outstanding Capital Investments and Pameco Corporation being
responsible for the Unused Commitment Fee based on that portion of Total
Outstandings on each day representing outstanding "Loans" under the Credit
Agreement.
2. The Seller shall pay, on the date hereof, a Facility Structuring
Fee to the Operating Agent in the amount of $50,000.
3. The provisions of Sections 14.04(a) of the Purchase Agreement are
incorporated herein.
4. This letter shall be governed by, an construed in accordance with
New York law.
Very truly yours,
GENERAL ELECTRIC CAPITAL
CORPORATION, as Lender, as Agent
and As Operating Agent
By:________________________________
Name:
Title:
19
Pameco Corporation
Pameco Securitization Corporation -3- January 24, 1997
REDWOOD RECEIVABLES
CORPORATION
By:________________________________
Name:
Title:
Agreed and accepted as of
the date first above written:
PAMECO SECURITIZATION CORPORATION
as Seller
By:______________________________
Name: Xxxxxxxx X. Xxxxxxxx
Title: President
PAMECO CORPORATION
as Servicer
By:______________________________
Name: Xxxxxxxx X. Xxxxxxxx
Title: President
20
