EXHIBIT 10.14a
WAIVER AND TENTH AMENDMENT
WAIVER AND TENTH AMENDMENT (this "Tenth Amendment"), dated as of June
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3, 1997, among PAMECO CORPORATION (formerly named MLX Refrigeration & Air
Conditioning Group, Inc.), a Delaware corporation (the "Company"), NEW PAMECO
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GEORGIA CORPORATION, a Georgia corporation ("New Pameco"), and GENERAL ELECTRIC
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CAPITAL CORPORATION, a New York corporation ("GE Capital"), as the sole Lender
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and the Agent under the Credit Agreement described below.
W I T N E S S E T H :
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WHEREAS, the Company and GE Capital, as the Agent and as the sole
Lender, are parties to a Credit Agreement, dated as of March 19, 1992 (as
amended prior to the date hereof and as the same is being and may be further
amended, supplemented or otherwise modified from time to time, the "Credit
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Agreement"); and
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WHEREAS, it is contemplated that the Company and its parent, Pameco
Holdings, Inc., a Delaware corporation ("Holdings"), be merged on this date with
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and into New Pameco, with New Pameco being the surviving corporation from such
merger (the "New Pameco Merger") and with New Pameco changing its name to
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"Pameco Corporation" upon the closing of the New Pameco Merger; and
WHEREAS, the purpose of the New Pameco Merger is to facilitate the
initial public offering of shares of the common stock of New Pameco (the "New
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Pameco IPO") which is expected to close on or before June 10, 1997; and
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WHEREAS, the Company and New Pameco have requested that the Lenders
and the Agent consent to the New Pameco Merger and the New Pameco IPO and agree
to certain waivers and amendments in connection with the New Pameco Merger and
the New Pameco IPO; and
WHEREAS, the Lenders and the Agent are willing to grant such consent
and agree to such waivers and modifications upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
1. Defined Terms. Terms defined in the Credit Agreement are used
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herein with the meanings set forth in the Credit Agreement unless otherwise
defined herein.
2. Consent and Waivers. (a) The Agent and the Lenders hereby consent
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to, and the Agent and Lenders hereby waive any Default or any Event of Default
which may arise
under Section 6.3 or 6.7 of the Credit Agreement solely as a result of, the
consummation of the New Pameco Merger and the New Pameco IPO, provided that the
New Pameco Merger and the New Pameco IPO are consummated on the terms and
conditions disclosed in the registration statement (file number 333-24043) filed
by New Pameco with the Securities and Exchange Commission (as amended as of the
date hereof, the "Registration Statement") or on such other terms and conditions
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as may be approved in writing by the Lenders.
(b) Provided that New Pameco applies the proceeds of the New Pameco
IPO as provided in the Registration Statement, the Agent and the Lenders hereby
waive any requirement under Section 2.06(a) and 2.06(b) of the Credit Agreement
that the Company make any mandatory prepayment from the proceeds of the New
Pameco IPO.
3. Assignment and Assumption. (a) Effective upon the consummation of
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the New Pameco Merger, and without the necessity of any further action, (i) the
Company shall be have assigned to New Pameco all of the Company's rights, titles
and interests in and to the Credit Agreement and the other Loan Documents
executed by the Company and New Pameco hereby agrees to accept such assignment
(and the Lenders and the Agent hereby consent to such assignment), and (ii) the
Company shall have assigned to New Pameco all of the Company's covenants,
representations, warranties, obligations, duties, indebtedness and liabilities
under the Credit Agreement and the other Loan Documents executed by the Company
(whether arising or accruing before, on or after the consummation of the New
Pameco Merger) and New Pameco shall have assumed such covenants,
representations, warranties, obligations, duties, indebtedness and liabilities
and to perform and observe the same to the same extent as if it were an original
signatory to the Credit Agreement and such other Loan Documents (and the Lenders
and the Agent hereby consent to such assumption).
(b) New Pameco agrees that all rights, titles and interests acquired
by it in any and all Collateral of the Company acquired by it as a result of the
consummation of the New Pameco Merger shall continue to be subject to the Liens
and other rights, titles and interests of the Lenders and the Agent under the
Company Security Agreement, the Company Pledge Agreement, the Company Patent and
Trademark Assignment, the Lock Box Agreement and any other Collateral Documents
or Loan Documents executed by the Company.
(c) For avoidance of doubt, New Pameco agrees that, from and after
the consummation of the New Pameco Merger, (i) New Pameco shall be deemed to
have granted Liens to the Agent, for the benefit of the Lenders, under the
Company Security Agreement, the Company Pledge Agreement, the Company Patent and
Trademark Assignment, the Lock Box Agreement and any other Collateral Documents
or Loan Documents executed by the Company on any and all Collateral then owned
or thereafter acquired by New Pameco, all in accordance with (and to the same
extent as if New Pameco were an original signatory to) such Collateral Documents
and Loan Documents, (ii) New Pameco shall be and serve as the "Company" for all
purposes of the Credit Agreement and the other Loan Documents executed by the
Company and shall perform and observe all of the covenants, agreements, terms,
conditions, obligations, duties and liabilities of the "Company" thereunder and
shall be deemed to have granted to the Agent (for
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the benefit of the Lenders) all of the Liens granted by the "Company"
thereunder, all to the same extent as if New Pameco were an original signatory
thereto and on the terms and subject to the conditions of the Credit Agreement
and such other Loan Documents, and (iii) all references to the "Company" or
"Holdings" in any of the Loan Documents shall be deemed to be references to New
Pameco as successor by merger to Old Pameco and Holdings.
4. Amendments of Section 1.1. Section 1.1 of the Credit Agreement is
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hereby amended by:
(a) Deleting therefrom the definitions of the following terms:
"Adjusted Interest Coverage Ratio", "Guarantees", "Holdings", "Holdings
Guarantee", "Holdings Interest Expense", "Holdings Patent and Trademark
Assignment", "Holdings Pledge Agreement", "Holdings Preferred Stock",
"Holdings Security Agreement", "Management Services Agreement", "New
Subordinated Bridge Note", "Series A Preferred Stockholder Agreement", and
"Stockholder Agreements";
(b) Deleting therefrom the definition of the term "Applicable
Margin", and by substituting the following new definition of such term in
lieu thereof:
"Applicable Margin" for each Type of Loan shall mean for the period
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commencing with the Effective Date and each subsequent Adjustment Date and
ending on the day immediately preceding the next succeeding Adjustment
Date, the rate per annum set forth under the relevant column heading below
opposite the Interest Coverage Ratio for such period:
Period Index Rate Loans Eurodollar Loans
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Interest Coverage 0.00% 2.00%
Ratio less than 2.75 to 1.0
Interest Coverage 0.00% 1.75%
Ratio equal to or greater than
2.75 to 1.0
(c) Adding thereto in correct alphabetical order the following new
definitions:
"IPO Documents" shall mean (i) the Underwriting Agreement, dated as of
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June 3, 1997, among Pameco, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation and the other underwriters parties thereto, and (ii) the
Agreement and Plan of Merger, dated as of May 9, 1997, among New Pameco,
Holdings and the Company.
"New Pameco" shall have the meaning assigned to it in the Tenth
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Amendment.
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"New Pameco IPO" shall have the meaning assigned to it in the Tenth
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Amendment.
"New Pameco Merger" shall have the meaning assigned to it in the Tenth
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Amendment.
"Registration Statement" shall have the meaning assigned to it in the
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Tenth Amendment.
"Tenth Amendment" shall mean the Waiver and Tenth Amendment, dated as
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of June 3, 1997, among Pameco Corporation, New Pameco Georgia Corporation,
the Lender signatory thereto and the Agent.
"Tenth Amendment Effective Date" shall have the meaning given such
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term in the Tenth Amendment.
5. Amendment of Section 2.13. Section 2.13 of the Credit Agreement
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is hereby amended by deleting therefrom the date "November 21, 1996" as it
appears and substituting therefor the date "June 3, 1997".
6. Amendment of Section 2.18. Section 2.18 of the Credit Agreement
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is hereby amended by deleting such section in its entirety and by substituting
the following new section in lieu thereof:
2.18 Use of Proceeds. The proceeds of the Loan shall be
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used by the Company to finance the working capital and capital
expenditure requirements of the Company and its Subsidiaries in the
ordinary course of business.
7. Amendment of Section 3.1. Section 3.1 of the Credit
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Agreement shall be deleted in its entirety and the following new Section 3.1
shall be substituted in lieu thereof:
3.1 Financial Condition. (a)The audited consolidated
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balance sheets of the Company and its Consolidated Subsidiaries as at
February 28, 1997, and the related audited consolidated statements of
income, shareholder's equity and cash flows for the year then ended,
copies of which have heretofore be furnished to each Lender, are
complete and correct and present fairly the consolidated financial
condition of each such Person as at such date and the consolidated
results of its operations and its consolidated cash flows for the
fiscal period then ended. Also such financial statements have been
prepared in accordance with GAAP applied consistently throughout the
periods involved. The Company and its Consolidated Subsidiaries do
not have any material Contingent Obligation, contingent liability or
liability for taxes or long-term lease or unusual forward or long-term
commitment likely (individually or in the aggregate) to result in a
Material Adverse Effect that is not reflected in said financial
statements or in the notes thereto. During the
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period from February 28, 1997 to and including the date hereof there
has been no sale, transfer or other disposition by the Company or any
of its Consolidated Subsidiaries of any material part of its business
or property and no purchase or other acquisition of any business or
property (including any capital stock of any other Person) material in
relation to the consolidated financial condition of the Company and
its Consolidated Subsidiaries at February 28, 1997, except pursuant to
the New Pameco Merger as disclosed in the aforesaid audited financial
statements.
(b) Except as set forth on Schedule VII, there has been no
material adverse change in the business, operations, property or
condition (financial or otherwise) of the Company and its Consolidated
Subsidiaries taken as a whole since February 28, 1997.
(c) No dividends or other distributions have been declared,
paid or made upon any shares of capital stock of the Company or any of
its Subsidiaries, nor have any shares of capital stock of the Company
or any of its Subsidiaries been redeemed, retired, purchased or
otherwise acquired for value by the Company or any of its Subsidiaries
since February 28, 1997, except as may be permitted hereunder.
(d) The pro forma consolidated balance sheet of the Company
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and its Consolidated Subsidiaries as at February 28, 1997, a copy of
which has been furnished to each Lender, has been prepared in
accordance with GAAP (except that, in lieu of footnotes, the Company
may provide to the Agent such supporting information as it shall have
reasonably available), adjusted as if the New Pameco Merger, the New
Pameco IPO and all transactions contemplated by the IPO Documents and
the Registration Statement had occurred as at the date of such balance
sheet, and present fairly on a pro forma basis the consolidated
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financial condition of the Company and its Consolidated Subsidiaries
at such date assuming that the events described in this sentence had
actually occurred on such date.
8. Amendment of Section 3.18. Section 3.18 of the Credit
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Agreement shall be deleted in its entirety and the following new Section 3.18
shall be substituted in lieu thereof:
3.18 Solvency and Equivalent Value. After giving effect to the
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New Pameco Merger, the New Pameco IPO, the transactions contemplated by the
IPO Documents, the repayment in full of the Junior Subordinated Debt, the
New Subordinated Debt and the Subordinated Bridge Loan and the payment of
all legal, investment banking, accounting and other fees and expenses
related hereto and thereto, each of the Company and its Subsidiaries will
be Solvent as of and on each of (i) the Tenth Amendment Effective Date and
(ii) the date on which the New Pameco IPO is consummated.
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9. Amendment of Section 3.22. Section 3.22 of the Credit Agreement
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is hereby deleted in its entirety and the following new Section 3.22 is
substituted in lieu thereof:
3.22 IPO Documents and Registration Statement. A true and
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complete copy of the form of each of the IPO Documents and Registration
Statement (including all exhibits, schedules and amendments to any thereof)
has been delivered to each Lender. Each of the IPO Documents and the
Registration Statement has been duly executed and delivered by the parties
thereto and is in full force and effect in accordance with its terms. As of
the Tenth Amendment Effective Date, the representations and warranties of
Holdings, the Company and New Pameco contained in the IPO Documents are
true and correct in all material respects as if made as of such date
(unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date); the Agent and the Lenders are entitled
to rely upon such representations and warranties to the same extent as
though the same were set in full herein. Neither Holdings, the Company,
New Pameco nor any of their respective Subsidiaries is in default under any
of the IPO Documents and, to the best knowledge of the Company after due
inquiry, no event or condition exists which would give any party the right
to terminate any of the IPO Documents or to fail to consummate the
transactions contemplated thereby.
10. Amendment of Section 3.24. Section 3.24 of the Credit Agreement
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is hereby amended by deleting therefrom the references to the names "▇▇▇▇▇ ▇.
▇▇▇▇▇" and "▇▇▇▇▇▇ ▇▇▇▇▇▇" and by substituting reference to the name "▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇".
11. Addition of Section 3.34. A new Section 3.34 shall be inserted
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after Section 3.33 of the Credit Agreement and shall read as follows;
3.34 New Pameco Merger and IPO. As of the Tenth Amendment
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Effective Date, all actions necessary for the consummation the New Pameco
Merger in accordance with the terms and conditions of the IPO Documents
have been duly taken.
12. Amendment of Section 6.1(b). Section 6.1(b) of the Credit
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Agreement is hereby amended in its entirety to read as follows:
(b) Indebtedness of the Company in respect of the Junior
Subordinated Debt, the New Subordinated Debt, and the Subordinated
Bridge Loan; provided, however, that all Indebtedness with respect to
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the foregoing subordinated debt shall be repaid in full by the Company
from the proceeds of the New Pameco IPO on the date on which the New
Pameco IPO is consummated, which date shall be no later than June 10,
1997, and shall not be outstanding thereafter;
13. Amendment of Section 6.3. Section 6.3 of the Credit
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Agreement is hereby amended by deleting the reference therein to the "Transfer
Agreement" and by substituting in lieu thereof a reference to the "Transfer
Agreement or the IPO Documents".
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14. Amendment of Section 6.4. Section 6.4 of the Credit
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Agreement is hereby deleted in its entirety and the following new Section 6.4
is substituted in lieu thereof:
6.4 Limitation on Dividends and Restricted Payments. The
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Company shall not, and shall not permit any of its Subsidiaries to, declare
or pay any dividend (other than dividends payable solely in common stock of
the Company) on, or make any payment on account of, or set part assets for
a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any shares of any class of
capital stock of the Company or any of its Subsidiaries, or any warrants or
options to purchase such stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of the Company or
any of its Subsidiaries (collectively, "Restricted Payments"), except that:
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(a) any Subsidiary of the Company may make Restricted Payments to the
Company; and (b) the Company may make Restricted Payments in any one fiscal
year of the Company, beginning with the fiscal year ended February 28,
1998, so long as the aggregate amount of such payments for any such fiscal
year shall not exceed 75% of the Consolidated Net Income of the Company for
the immediately preceding fiscal year (as reflected in the audited
financial statements required by subsection 5.1(a) of the Credit Agreement
for such prior fiscal year of the Company, which financial statements must
have been prepared in accordance with GAAP applied consistently throughout
such fiscal year and certified with an Unqualified Opinion by an accountant
of nationally recognized standings selected by the Company and acceptable
to the Agent) and provided further, that no such payment shall be made
pursuant to this clause (b) when any Default or Event of Default has
occurred and is continuing.
15. Amendment of Section 6.5. Section 6.5 of the Credit Agreement is
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amended by deleting clause (g) thereof in its entirety and by substituting the
following new clause (g) in lieu thereof:
(g) the acquisition by purchase or otherwise of the capital
stock of or all or substantially all of the business, properties or assets
of any one or more Persons for aggregate consideration not to exceed
$1,000,000 in any one such acquisition transaction or in any series of
related acquisition transactions; provided that the aggregate consideration
for all acquisitions made pursuant to this paragraph (g) in any fiscal year
of the Company ending on or after February 28, 1997 shall not exceed
$5,000,000.
16. Amendment of Section 6.6. Section 6.6 of the Credit Agreement is
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amended by deleting clause (c) thereof in its entirety and by substituting the
following new clause (c) in lieu thereof:
(c) pursuant to the terms of the Transfer Agreement, the
Purchase Agreement or the IPO Documents.
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17. Amendment of Section 6.8. Section 6.8 of the Credit Agreement is
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hereby deleted in its entirety and the following new Section 6.8 is substituted
in lieu thereof:
6.8 Financial Condition Covenants. The Company shall not
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violate any of the financial covenants set forth on Schedule XX hereto.
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18. Deletion of Section 6.10. Section 6.10 of the Credit Agreement
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is hereby deleted in its entirety.
19. Amendment of Section 7. Section 7 of the Credit Agreement shall
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be amended by deleting therefrom paragraphs (o), (p), (s), (t), (u), (v), (w),
(y), (z), and (ad).
20. Revision of Certain Schedules; New Schedule. Schedule II and
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Schedule III to the Credit Agreement are hereby deleted and replaced with the
updated Schedule II and Schedule III attached hereto, respectively. In
addition, Schedule XX attached hereto is deemed incorporated in the Credit
Agreement by this reference.
21. Termination of Holdings Loan Documents. On the Tenth Amendment
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Effective Date, the Holdings Guarantee, the Holdings Security Agreement, the
Holdings Pledge Agreement, and the Holdings Patent and Trademark Assignment
shall be deemed terminated; provided, however, that such termination shall not
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release, modify or impair the obligations, liabilities and indebtedness of New
Pameco, as successor by merger to the Company and Holdings, under the Collateral
Documents and other Loan Documents executed by the Company, all of which shall
remain in effect as amended or supplemented by this Tenth Amendment except as
provided in this Section 21.
22. New Promissory Note. On the Tenth Amendment Effective Date, New
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Pameco shall execute and deliver to the Agent a Promissory Note (the "New
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Promissory Note"), substantially in the form of Annex A to this Tenth Amendment,
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in substitution and exchange for, but not in payment of, that certain promissory
note of the Company made in favor of GE Capital in the principal amount of
$100,000.000.00.
23. New Fee Letter. On the Tenth Amendment Effective Date, the
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Company, New Pameco, PSC, GE Capital and Redwood Receivables Company shall have
entered into a Fee Letter dated June 3, 1997 (the "New Fee Letter").
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24. Conditions to Effectiveness. This Tenth Amendment shall become
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effective (the actual date of such effectiveness, the "Tenth Amendment Effective
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Date") as of the date first above written when:
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(a) counterparts hereof shall have been duly executed and
delivered by each of the parties hereto and acknowledged by Holdings;
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(b) the Agent shall have received a Promissory Note, executed
and delivered by a duly authorized officer New Pameco, which conforms to
the requirements of the Credit Agreement and Section 22 of this Tenth
Amendment;
(c) the Agent shall have received, with a copy for each Lender,
a certificate of the Secretary or an Assistant Secretary of each of the
Company, New Pameco and Holdings (collectively, the "Credit Parties"),
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dated as of the Tenth Amendment Effective Date, and certifying (i) that
attached thereto is a true and complete copy of the resolutions (which
resolutions are in form and substance reasonably satisfactory to each
Lender) of the board of directors of such Credit Party authorizing, as
applicable, the execution, delivery and performance of this Tenth
Amendment, the Consent and Acknowledgment attached hereto, the New
Promissory Note, the New Fee Letter, and related matters, in each case
certified by the Secretary or an Assistant Secretary of such Credit Party
as of the Tenth Amendment Effective Date and (ii) as to the incumbency and
specimen signature of such Credit Party's officers executing this Tenth
Amendment and all other documents required or necessary to be delivered
hereunder or in connection herewith. Such certificate shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded as of the date of such certificate;
(d) the Agent shall have received, with a copy for each Lender,
true and complete copies of the certificate of incorporation and by-laws of
each Credit Party, certified as of the Tenth Amendment Effective Date as
complete and correct copies thereof by the Secretary or an Assistant
Secretary of such Credit Party;
(e) the Agent shall have received with a counterpart for each
Lender the executed legal opinion of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP., counsel to
the Credit Parties, in form and substance satisfactory to the Agent;
(f) the consummation of the transactions contemplated hereby and
by the IPO Documents shall not contravene, violate or conflict with, or
involve the Agent or any Lender in a violation of, any Requirement of Law;
(g) the Agent shall have received evidence of the filing of such
Uniform Commercial Code financing statements as the Agent has requested in
order to continue in favor of the Agent, for the benefit of the Agent and
the Lenders, a perfected First Lien on the Collateral;
(h) the Agent shall have received copies of all lien searches
that it deems appropriate with respect to New Pameco, and none of such
searches shall have revealed that any existing liens or encumbrances on the
assets of New Pameco exists other than those liens or encumbrances that are
permitted under Section 6.2 of the Credit Agreement as amended hereby;
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(i) the Agent shall have received a Certificate of Existence,
dated no more than ten (10) days prior to the Tenth Amendment Effective
Date, with respect to New Pameco from the Secretary of State of Georgia;
(j) the New Pameco Merger shall have been consummated as
contemplated by the IPO Documents and the Registration Statement, the Agent
shall have received a fully executed copy of the related Agreement and Plan
of Merger, dated as of May 9, 1997, among Old Pameco, Holdings and New
Pameco, and the Agent shall have received a copy of the Certificate of
Merger for the New Pameco Merger as filed in the Offices of the Secretaries
of State of the States of Delaware and Georgia; and
(k) the Company and New Pameco shall have taken such other
actions and provided such other documentation as the Agent may request.
25. Conditions Subsequent. (a) (i) The New Pameco IPO shall
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have been consummated as contemplated by the IPO Documents and the Registration
Statement on or before June 10, 1997 and (ii) on the date that the New Pameco
IPO is consummated (which date shall be no later than June 10, 1997) (the "IPO
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Closing Date"), New Pameco shall provide to the Agent evidence satisfactory to
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the Agent of the consummation of the New Pameco IPO;
(b) (i) On the IPO Closing Date, New Pameco shall have repaid in
full all of the then-outstanding Junior Subordinated Debt, New Subordinated Debt
and Subordinated Bridge Loan and (ii) the Agent shall have received on the IPO
Closing Date evidence satisfactory to the Agent that all such Indebtedness has
been paid in full and is no longer outstanding; and
(c) Within thirty (30) days after the Tenth Amendment Effective
Date, the Agent shall have received the results of a recent search by a Person
satisfactory to the Agent of the Uniform Commercial Code filings which may have
been filed in the jurisdictions set forth on Schedule III with respect to Old
Pameco, Holdings and New Pameco, or such other evidence satisfactory to Agent of
the filing of the financing statements filed pursuant to the Tenth Amendment and
any other financing statements that may have been filed by third party
creditors; all such searches and other evidence will be obtained at the expense
of New Pameco.
Any default by New Pameco in the observance or performance of any
of the foregoing conditions subsequent shall be deemed an "Event of Default"
under the Credit Agreement.
26. Representations and Warranties of the Company and New
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Pameco. Each of the Company and New Pameco represents and warrants that:
(a) each of this Tenth Amendment, the Credit Agreement as
amended by this Tenth Amendment, and the New Promissory Note has been duly
authorized, executed and delivered by each such party which is a signatory
thereto;
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(b) each of this Tenth Amendment, the Credit Agreement as
amended by this Tenth Amendment, 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 set forth in
Section 3 of the Credit Agreement is true and correct as of the Tenth
Amendment Effective Date; provided that (i) references in the Credit
Agreement to "this Agreement" shall be deemed references to the Credit
Agreement as amended to date and by this Tenth Amendment and references to
the "Note" in the Credit Agreement shall be deemed references to the New
Promissory Note, (ii) all references to Schedule II and Schedule III to the
Credit Agreement shall be deemed to be references to Schedule II and
Schedule III attached to this Tenth Amendment, respectively, and (iii)
references in the Credit Agreement and the other Loan Documents to the
"Company" or "Holdings" shall be deemed to be references to New Pameco as
successor by merger to Old Pameco and Holdings, and New Pameco hereby makes
each such representation and warranty to and for the benefit of the Lenders
and the Agent as if the same were set forth in full herein;
(d) prior to the consummation of the Merger, New Pameco was not
engaged in any business activities and had incurred no Indebtedness;
(e) except for the actions and filings expressly provided for
herein and taken or made by the Pameco Entities, no further action is
required to be taken, or filings to be made, in order for each of the Loan
Documents to continue to be in full force and effect;
(f) after giving effect to this Tenth Amendment, there does not
exist any Default or Event of Default, and after giving effect to the New
Pameco Merger and the New Pameco IPO, there will not exist any Default or
Event of Default; and
(g) neither the Company, Holdings nor New Pameco has any trade
name, fictitious name, assumed name or "doing business as" name except as
disclosed on the updated Schedule II to the Credit Agreement attached
hereto and such schedule also lists the locations of New Pameco's chief
executive office and principal place of business (both before and after
giving effect to the New Pameco Merger) as well as all other locations
where New Pameco will be doing business after giving effect to the New
Pameco Merger.
27. Continuing Effects. Except as expressly waived hereby, the
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Credit Agreement shall continue to be and shall remain in full force and effect
in accordance with its terms.
28. Expenses. New Pameco agrees to pay and reimburse the Agent for
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all of its out-of-pocket costs and expenses incurred in connection with (a) any
and all periodic field examinations relating to the Credit Agreement which have
been undertaken by General Electric
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ through and after the date hereof and (b) the negotiation,
preparation, execution, and delivery of this Tenth Amendment, including the
reasonable fees and expenses of counsel to the Agent.
29. Counterparts. This Tenth Amendment may be executed in any number
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of separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
30. GOVERNING LAW. THIS TENTH AMENDMENT SHALL BE GOVERNED BY, AND
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CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Tenth
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
PAMECO CORPORATION
By: _____________________________________________
Treasurer
NEW PAMECO GEORGIA CORPORATION
By: _____________________________________________
Treasurer
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and as the sole Lender
By: _____________________________________________
Title:___________________________________________
ACKNOWLEDGMENT AND CONSENT
The undersigned does hereby acknowledge and consent to the within and
foregoing Waiver and Tenth Amendment.
PAMECO HOLDINGS, INC.
By:______________________________________________
Treasurer
-13-
PROMISSORY NOTE
---------------
$100,000,000.00 New York, New York
March 19, 1992
Amended and Restated
June 3, 1997
FOR VALUE RECEIVED, the undersigned, PAMECO CORPORATION (the
"Company"), a Georgia corporation formerly known as New Pameco Georgia
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Corporation and the successor by merger to Pameco Corporation, a Delaware
corporation, hereby unconditionally promises to pay on the Termination Date, to
the order of GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation (the
"Lender") at the office of General Electric Capital Corporation, as agent for
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the lenders parties to the Credit Agreement referred to below (in such capacity,
the "Agent"), located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, in lawful
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money of the United States of America and in immediately available funds, the
principal amount equal to the lesser of (a) ONE HUNDRED MILLION AND 00/100
DOLLARS ($100,000,000.00) and (b) the aggregate unpaid principal amount of all
Loans made by the Lender to the undersigned pursuant to subsection 2.1 of said
Credit Agreement and all other Loans made or deemed made by the Company under
the Credit Agreement.
The undersigned further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time from the date
hereof at the applicable rate per annum as specified in subsection 2.4 of said
Credit Agreement until any such amount shall become due and payable (whether at
the stated maturity, by acceleration or otherwise), and thereafter on such
overdue amount at the rate per annum set forth in subsection 2.4(c) of said
Credit Agreement until paid in full (both before and after judgment). Interest
shall be due and payable in arrears on each Interest Payment Date, as such term
is defined in the Credit Agreement, provided that interest accruing pursuant to
subsection 2.4(c) shall be payable on demand.
The holder of this Note is authorized to record the date, Type and
amount of each Loan made by such Lender, each continuation thereof, each
conversion of all or a portion thereof to another Type, the date and amount of
each payment or prepayment of principal thereof and the length of each Interest
Period with respect thereto, and any such recordation shall constitute prima
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facie evidence of the accuracy of the information so recorded in the absence of
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manifest error, provided that failure by the Lender to make such recordation on
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this Note shall not affect any of the obligations of the Company under this Note
or said Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement,
dated as of March 19, 1992 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the undersigned, the Lender, the
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other lenders and financial institutions parties thereto and General Electric
Capital Corporation, as Agent, is entitled to the benefits thereof, is secured
as provided therein and is subject to optional and mandatory prepayment in whole
or in part as provided therein. Terms used herein which are defined in the
Credit
2
Agreement shall have such defined meanings unless otherwise defined herein or
unless the context otherwise requires.
This Note is being issued in replacement of and substitution for that
certain Promissory Note dated November 21, 1996 by the Company to the order of
the Lender in the principal amount of $100,000,000, which was issued in
replacement of and substitution for those certain prior notes executed by the
Company in favor of Lender. In addition to the indebtedness evidenced by this
Note, this Note shall also evidence any accrued and unpaid interest on such
preceding notes.
Upon the occurrence of any one or more of the Events of Default
specified in such Credit Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable all as
provided therein.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
PAMECO CORPORATION, a Georgia corporation
By:_____________________________________________
Treasurer
SCHEDULE I
TO NOTE
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BASE RATE LOANS AND CONVERSIONS
AND REPAYMENTS OF PRINCIPAL
Amount of Amount of
Base Rate Eurodollar
Loans Con- Loans Amount of
Amount of verted into Converted Principal Unpaid Notation
Date Interest of Base Rate Eurodollar into Base Repaid Principal Made
---- ------ ----
Period Loans Loans Rate Loans Balance By
------ ----- ----- ---------- ------- --
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
SCHEDULE II
TO NOTE
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EURODOLLAR LOANS AND CONVERSIONS
AND REPAYMENTS OF PRINCIPAL
Amount of Amount of
Base Rate Eurodollar
Loans Con- Loans
Amount of verted into Converted Amount of Unpaid
Eurodollar Interest Eurodollar into Base Principal Principal Notation
Date Loan Period Loans Rate Loans Repaid Balance Made By
---- ----- ------ ----- ---------- ------ ------- -------
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
______ ________ __________ ____________ _______ ________ __________ _______
SCHEDULE II
to
Credit Agreement
LIST OF CHIEF EXECUTIVE OFFICE AND
PRINCIPAL PLACE OF BUSINESS OF THE COMPANY
-------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
LIST OF OTHER PLACES OF
BUSINESS OF THE COMPANY
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See Attachment I
TRADE NAMES, FICTITIOUS NAMES, ASSUMED NAMES
AND "DOING BUSINESS AS" NAMES OF THE COMPANY
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Pameco Corp. Knoxville Refrigeration
National Temperature Control Centers R&R Supply
NTCC Thermal Company
Melchoir, Armstrong, Dessau Thermal Supply
Melco ▇▇▇▇▇▇▇▇▇ Distribution
▇▇▇▇▇▇ Refrigeration Pameco-Aire
▇▇▇▇▇▇ Brothers Gulf Coast Air Conditioning
J & P Supply Rick's Supply
Chase Supply
▇▇▇▇▇ Supply
▇▇▇▇▇▇-▇▇▇▇▇
SCHEDULE III
to
Credit Agreement
FILING OFFICES
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STATE FILING OFFICE
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Alabama Secretary of State
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Alaska Department of Natural Resources
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Arizona Secretary of State
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Arkansas Secretary of State
Sebastian County Recorder
Washington County Recorder
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California Secretary of State
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Colorado Secretary of State
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Connecticut Secretary of State
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Delaware Secretary of State
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Florida Secretary of State
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Georgia Clerk of Superior Court of Gwinnett County
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Hawaii Registrar of Conveyances
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Idaho Secretary of State
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Illinois Secretary of State
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Indiana Secretary of State
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Iowa Secretary of State
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Kentucky Secretary of State
Jefferson County Recorder
Christian County Recorder
Daviess County Recorder
▇▇▇▇▇▇▇▇▇ County Recorder
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Lousiana Clerk of Court of Quachita Parish
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Maryland State Department of Assessment and Taxation
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Massachusetts Secretary of State
Town Clerk, Waltham, MA
Town Clerk, West Springfield, MA
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Michigan Secretary of State
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Minnesota Secretary of State
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2
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Mississippi Secretary of State
Washington County Recorder
▇▇▇▇▇ County Recorder
▇▇▇▇▇ County Recorder
Pike County Recorder
▇▇▇▇▇ County Recorder
Lauderdale County Recorder
Lafayette County Recorder
▇▇▇ County Recorder
Lowndes County Recorder
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Missouri Secretary of State
Cape Girardeau County Recorder
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Montana Secretary of State
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Nebraska Secretary of State
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Nevada Secretary of State
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New Jersey Secretary of State
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New Mexico Secretary of State
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New York Secretary of State
Nassau County Recorder
Albany County Recorder
Onondaga County Recorder
Monroe County Recorder
Erie County Recorder
Bronx County Recorder
Queens County Recorder
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North Carolina Secretary of State
Buncombe County Recorder
Mecklenburg County Recorder
Guilford County Recorder
Catawba County Recorder
Forsyth County Recorder
Wake County Recorder
Pitt County Recorder
Cumberland County Recorder
Onslow County Recorder
New Hanover County Recorder
Durham County Recorder
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North Dakota Secretary of State
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Oklahoma Secretary of State
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Oregon Secretary of State
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3
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Pennyslvania Secretary of State
Dauphin County Recorder
Luzerne County Recorder
Philadelphia County Recorder
Lehigh County Recorder
▇▇▇▇▇▇▇▇▇▇ County Recorder
Prussia County Recorder
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Rhode Island Secretary of State
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South Carolina Secretary of State
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South Dakota Secretary of State
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Tennessee Secretary of State
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Texas Secretary of State
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Utah Division of Corporation and Commercial Code
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Virginia State Corporation Commission
County Clerk of Fairfax County, VA
City Clerk of Danville, VA
City Clerk of Lynchburg, VA
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Washington Department of Licensing
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Wisconsin Department of Financial Division of Corporate
and Consumer Services
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Wyoming Natron County Recorder
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SCHEDULE XX
to
Credit Agreement
FINANCIAL COVENANTS
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The Company shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP,
consistently applied:
(a) Company EBITDA. As of any date of determination, the Company
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EBITDA for the preceding twelve consecutive fiscal months shall not be less than
$7,800,000.
(b) Interest Coverage Ratio. As of any date of determination, the
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Interest Coverage Ratio for the preceding twelve consecutive fiscal months shall
not be less than 1.07 to 1.0.
(c) Fixed Charge Coverage Ratio. As of any date of determination, the
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ratio of (i) Company EBITDA to (ii) Company Fixed Charges for the preceding
twelve consecutive fiscal months shall not be less than 1.05 to 1.0.
(d) Maintenance of Net Worth. The Company Net Worth on the last day
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of each fiscal quarter ending on the last day of any fiscal year set forth below
shall not be less than the amount set forth opposite such fiscal year:
FISCAL YEAR ENDING AMOUNT
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February 28, 1998 $52,500,000
February 28, 1999 $56,000,000
Each Fiscal Year
ending thereafter $59,500,000