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EXHIBIT 10.69
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment"),
dated as of October 27, 1998 (but effective as of September 30, 1998), is
entered into among KEVCO, INC., a Texas corporation (the "Borrower"), the banks
listed on the signature pages hereof (collectively, the "Lenders"), and
NATIONSBANK, N.A. (successor by merger to NationsBank of Texas, N.A.), as the
Administrative Agent (in said capacity, the "Administrative Agent").
A. The Borrower, the Lenders and the Administrative Agent are parties
to that certain Second Amended and Restated Credit Agreement, dated as of
December 1, 1997, as amended by that certain First Amendment to Credit
Agreement, dated as of February 12, 1998 (the "Credit Agreement"; the terms
defined in the Credit Agreement and not otherwise defined herein shall be used
herein as defined in the Credit Agreement).
B. The Borrower, the Lenders and the Administrative Agent desire to
(i) amend the Credit Agreement and (ii) waive an Event of Default under the
Credit Agreement.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the Borrower,
the Lenders and the Administrative Agent covenant and agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
(a) The definition of "Applicable Base Rate Margin" set forth in
Section 1.1 of the Credit Agreement is hereby amended to read as follows:
"'Applicable Base Rate Margin'" means the following per annum
percentages, applicable in the following situations:
Facility A Term
Loan Advances Facility B
and Revolving Term Loan
Applicability Advances Advances
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(a) The Leverage Ratio is greater than or equal to 1.500 2.000
5.00 to 1
(b) The Leverage Ratio is greater than or equal to 1.250 1.750
4.50 to 1 but less than 5.00 to 1
(c) The Leverage Ratio is greater than or equal to 1.000 1.500
3.75 to 1 but less than 4.50 to 1
than 4.50 to 1
(d) The Leverage Ratio is less than 3.75 to 1 0. 750 1.250
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The Applicable Base Rate-Margin payable by the Borrower on the Base Rate
Advances outstanding hereunder shall be adjusted on each Adjustment Date as
tested by using the Leverage Ratio for the most recent four fiscal quarters. If
the financial statements required pursuant to Section 6.1 or 6.2 hereof, as
applicable, and the related Compliance Certificate are not received by the
Administrative Agent by the date required, the Applicable Base Rate Margin
shall be determined as if the Leverage Ratio is greater than or equal to 5.00
to 1 until such time as such financial statements and Compliance Certificate
are received. Notwithstanding the foregoing, the Applicable Base Rate Margin
from and after the Agreement Date until and including two Business Days
following the date of receipt of the financial statements for the fiscal
quarter ending June 30, 1998 and related Compliance Certificate shall be
determined as if the Leverage Ratio is greater than or equal to 5.00 to 1."
(b) The definition of "Applicable LIBOR Rate Margin" set forth in
Section 1.1 of the Credit Agreement is hereby amended to read as follows:
"'Applicable LIBOR Rate Margin'" means the following per
annum percentages, applicable in the following situations:
Facility A Term
Loan Advances Facility B
and Revolving Term Loan
Applicability Advances Advances
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(a) The Leverage Ratio is greater than or equal 3.000 3.500
to 5.00 to 1
(b) The Leverage Ratio is greater than or equal 2.750 3.250
to 4.50 to 1 but less than 5.00 to 1
(c) The Leverage Ratio is greater than or equal 2.500 3.000
to 3.75 to 1 but less than 4.50 to 1
(d) The Leverage Ratio is greater than or equal 2.250 2.750
to 3.00 to 1 but less than 3.75 to 1
(e) The Leverage Ratio is less than 3.00 to 1 2.000 2.500
The Applicable LIBOR Rate Margin payable by the Borrower on the LIBOR Advances
outstanding hereunder shall be adjusted on each Adjustment Date as tested by
using the Leverage Ratio for the most recent four fiscal quarters. If the
financial statements required pursuant to Section 6.1 or 6.2 hereof, as
applicable, and the related Compliance Certificate are not received by the
Administrative Agent by the date required, the Applicable LIBOR
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Rate Margin shall be determined as if the Leverage Ratio is greater than or
equal to 5.00 to 1 until such time as such financial statements and Compliance
Certificate are received. Notwithstanding the foregoing, the Applicable LIBOR
Rate Margin from and after the Agreement Date until and including two Business
Days following the date of receipt of the audited financial statements for the
fiscal quarter ending June 30, 1998 and the related Compliance Certificates
shall be determined as if the Leverage Ratio is greater than or equal to 5.00
to 1."
(c) Article 6 of the Credit Agreement is hereby amended by adding a
new Section 6.7 thereto to read as follows:
"Section 6.7 Monthly Financial Statements and Information.
Within 30 days after the end of each month, a consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such month
and the related consolidated statement of income for such month and
for the elapsed portion of the year ended with the last day of such
month; all of which shall be certified by the president or chief
financial officer or other officer of the Borrower acceptable to the
Administrative Agent, to be, in his or her opinion acting solely in
his or her capacity as an officer of the Borrower, complete and
correct in all material respects and to present fairly, in accordance
with GAAP, the financial position and results of operations of the
Borrower and its Subsidiaries as at the end of and for such month, and
for the elapsed portion of the year ended with the last day of such
month, subject only to normal year-end adjustments."
2. WAIVER. The Lenders hereby waive the Event of Default that occurred
under the Credit Agreement as a result of the failure of the Borrower to comply
with Section 7.10(a) of the Credit Agreement at the fiscal quarter ending
September 30, 1998. The waiver provided herein does not (a) affect any other
covenant or provision of the Credit Agreement and (b) relate to any fiscal
quarter-end other than September 30, 1998.
3. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
execution and delivery hereof, the Borrower represents and warrants that, as of
the date hereof and after giving effect to the amendments contemplated by the
foregoing Section 1 and the waiver contemplated by the foregoing Section 2.
(a) the representations and warranties contained in the Credit
Agreement are true and correct on and as of the date hereof as if made on and
as of such date;
(b) no event has occurred and is continuing which constitutes a
Default or an Event of Default;
(c) the Borrower has full power and authority to execute and deliver
this Second Amendment, and this Second Amendment and the Credit Agreement, as
amended hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in
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accordance with their respective terms, except as enforceability may be limited
by applicable debtor relief laws and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law) and except as rights to indemnity may be limited by federal or state
securities laws; and
(d) no authorization, approval, consent, or other action by, notice
to, or filing with, any governmental authority or other Person (including the
Board of Directors of the Borrower), is required for the execution, delivery or
performance by the Borrower of this Second Amendment or the acknowledgment of
this Second Amendment by any Subsidiary that executed a Subsidiary Guaranty.
4. CONDITIONS OF EFFECTIVENESS. This Second Amendment shall be
effective as of September 30, 1998, subject to the following:
(a) the Administrative Agent shall have received a counterpart of this
Second Amendment executed by Lenders comprising the Determining Lenders;
(b) the Administrative Agent shall have received counterparts of this
Second Amendment executed by the Borrower and acknowledged by each Subsidiary
that executed a Subsidiary Guaranty;
(c) the representations and warranties set forth in Section 3 of this
Second Amendment shall be true and correct; and
(d) the Administrative Agent and the Lenders shall have received in
form and substance satisfactory to the Administrative Agent and the Lenders,
such other documents and certificates as the Administrative Agent shall
require.
5. SUBSIDIARIES ACKNOWLEDGMENT. By signing below, each of the
Subsidiaries which has executed a Subsidiary Guaranty (i) acknowledges,
consents and agrees to the execution, delivery and performance by the Borrower
of this Second Amendment, (ii) acknowledges and agrees that its obligations in
respect of its Subsidiary Guaranty are not released, diminished, waived,
modified, impaired or affected in any manner by this Second Amendment or any of
the provisions contemplated herein, (iii) ratifies and confirms its obligations
under its Subsidiary Guaranty, and (iv) acknowledges and agrees that it has no
claims or offsets against, or defenses or counterclaims to, its Subsidiary
Guaranty.
6. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Second Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", or words of like import
shall mean and be a reference to the Credit Agreement, as affected and amended
by this Second Amendment.
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(b) The Credit Agreement, as amended by this Second Amendment, and all
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
7. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all
costs and expenses of the Administrative Agent in connection with the
preparation, reproduction, execution and delivery of this Second Amendment, and
the other instruments and documents to be delivered hereunder (including the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent with respect thereto and with respect to advising the Administrative
Agent as to its rights and responsibilities under the Credit Agreement, as
amended by this Second Amendment).
8. EXECUTION IN COUNTERPARTS. This Second Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which when taken together shall constitute but one
and the same instrument.
9. GOVERNING LAW; BINDING EFFECT. This Second Amendment shall be
governed by and construed in accordance with the laws of the State of Texas and
shall be binding upon the Borrower and each Lender and their respective
successors and assigns.
10. HEADINGS. Section headings in this Second Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Second Amendment for any other purpose.
11. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS SECOND
AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AS TO THE SUBJECT MATTER THEREIN AND HEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES.
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the date first above written.
BORROWER: KEVCO, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO
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ADMINISTRATIVE AGENT: NATIONSBANK, N.A. as the Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
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LENDERS: NATIONSBANK, N.A., as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
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NATIONAL CITY BANK KENTUCKY
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇
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Title: VICE PRESIDENT
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GUARANTY FEDERAL BANK, F.S.B.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President
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▇▇▇▇▇ FARGO BANK, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
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PILGRIM AMERICA PRIME RATE TRUST
By: Pilgrim America Investments, Inc.
as its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇, CFA
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Title: VICE PRESIDENT
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ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors, Inc., as Collateral
Manager
By:
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Name:
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Title:
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ALLIANCE CAPITAL FUNDING, L.L.C.
By: Alliance Capital Management, L.P., as
Manager on behalf of ALLIANCE CAPITAL
FUNDING, L.L.C.
By: ALLIANCE C A P I T A L MANAGEMENT
CORPORATION, General Partner of Alliance
Capital Management, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice President
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▇▇▇▇▇▇▇ ▇▇▇▇▇ DEBT STRATEGIES PORTFOLIO
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management, L.P., as
Investment Advisor
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title: AUTHORIZED SIGNATORY
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▇▇▇▇▇▇▇ ▇▇▇▇▇ Debt Global Investment Series:
INCOME STRATEGIES PORTFOLIO
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management, L.P., as
Investment Advisor
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title: AUTHORIZED SIGNATORY
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BANK ONE, TEXAS, N.A.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
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▇▇▇ Capital Funding LP
By: Highland Capital Management, L.P., as
Collateral Manager
By:
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Name:
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Title:
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ACKNOWLEDGED AND AGREED:
KEVCO MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO
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KEVCO HOLDING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO
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KEVCO GP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO
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KEVCO COMPONENTS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO
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DCM DELAWARE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO
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KEVCO MANUFACTURING, L.P.
By: KEVCO GP, INC., its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO
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KEVCO DISTRIBUTION, L.P.
By: KEVCO GP, INC., its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO
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