EXHIBIT 10.16
AMENDMENT AGREEMENT NO. 1
TO AMENDED AND RESTATED
REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT
THIS AMENDMENT AGREEMENT NO. 1 TO AMENDED AND RESTATED REVOLVING CREDIT
AND REIMBURSEMENT AGREEMENT (this "Agreement") is made and entered into as of
this 20th day of February, 1998, by and among WATSCO, INC., a Florida
corporation (the "Borrower"), the Lenders signatory hereto (the "Lenders") and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association and successor
to NationsBank, National Association (South), as Agent (the "Agent") for the
Lenders party to the Credit Agreement described below.
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and the Lenders have entered into an
Amended and Restated Revolving Credit Agreement dated August 8, 1997 (the
"Credit Agreement") pursuant to which the Lenders have agreed to make available
to the Borrower a revolving credit facility of up to $260,000,000; and
WHEREAS, as a condition to the making of loans the Lenders have
required that each Subsidiary of Borrower execute a Facility Guaranty whereby it
guarantees payment of the Obligations arising under the Credit Agreement; and
WHEREAS, the Borrower intends to dispose of its non-distribution
businesses consisting of its manufacturing operations (the "Manufacturing
Business") owned by its Manufacturing Subsidiary and its temporary staffing
business, Dunhill Staffing Systems, Inc. and Subsidiaries (the "Staffing
Business") in a single or series of transactions; and
WHEREAS, the Borrower has requested and the Agent and the Lenders have
agreed, subject to the terms and conditions of this Agreement, to amend certain
provisions of the Credit Agreement as set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, promises and
conditions herein set forth, it is hereby agreed as follows:
1. DEFINITIONS. The term "Credit Agreement" as used herein and in the
Loan Documents shall mean that certain Amended and Restated Revolving Credit and
Reimbursement Agreement dated as of August 8, 1997 by and among the Agent, the
Lenders and the Borrower, as hereby amended and as from time to time further
amended or modified. Unless the context otherwise requires, all capitalized
terms used herein without definition shall have the respective meanings provided
therefor in the Credit Agreement.
2. AMENDMENTS. Subject to the conditions set forth herein, the Credit
Agreement shall be and hereby is amended, effective as of the date hereof, as
follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
inserting therein the following new defined terms in alphabetical
order:
"'Manufacturing Subsidiaries' means each of
P.E./▇▇▇▇▇▇, Inc., Watsco Components, Inc., and Watsco Export,
Inc."
(b) Section 8.4 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of clause (e) thereof, deleting the
"." at the end of clause (f) thereof and inserting the word "; and" in
replacement thereof and by adding a new clause (g) at the end thereof
which shall read in its entirety as follows:
"(g) Liens incurred in any sale, transfer or
disposition of accounts receivable as permitted under SECTION
8.6(G)."
(c) Section 8.6 of the Credit Agreement is hereby deleted in
its entirety and the following new Section 8.6 is inserted in
replacement thereof:
"8.6 TRANSFER OF ASSETS. Sell, lease, transfer or
otherwise dispose of any assets of Borrower or any Subsidiary
(including any ownership interest in any Subsidiary) other
than (a) dispositions of inventory in the ordinary course of
business, (b) dispositions of equipment or real property
which, in the aggregate during any Fiscal Year, have a fair
market value or book value, whichever is less, of $5,000,000
or less and is not replaced by equipment having at least
equivalent value, (c) dispositions of property that is
substantially worn, damaged, obsolete or, in the judgment of
the Borrower, no longer best used or useful in its business or
that of any Subsidiary, (d) transfers of assets necessary to
give effect to merger or consolidation transactions permitted
by SECTION 8.8, (e) the disposition of Eligible Securities in
the ordinary course of management of the investment portfolio
of the Borrower and its Subsidiaries, (f) the sale or
disposition of all or substantially all of the capital stock
or assets of Dunhill or any of the Manufacturing Subsidiaries
for no less than fair market value, as determined by the Board
of Directors of the Borrower, (upon which event the Agent
will, at the request and reasonable expense of the Borrower,
execute such documents as shall be acceptable to the Agent and
its special counsel releasing Dunhill and each Manufacturing
Subsidiary from its obligations under any Facility Guaranty to
which it is a party), consideration for which may include
notes of purchasers in an aggregate amount not exceeding
$25,000,000 and a repayment term not exceeding three years,
and (g) the sale, without recourse, other than for
misrepresentation, by Gemaire Distributors, Inc. and Coastline
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Distribution, Inc. of accounts receivable having a value, net
on all allowances and discounts, of not to exceed during any
Fiscal Year an aggregate dollar value of $5,000,000 which
receivables shall be payable by Persons who are not United
States citizens or organized and existing under the laws of
the United States or a state or territory thereof."
(d) Section 8.7 of the Credit Agreement is hereby amended by
(i) amending and restating clause (f) in its entirety so that as
amended it reads as follows:
"(f) additional investments in Persons provided that
(i) the aggregate costs incurred in making such investments
(reduced by cash dividends or other cash payments received on
or in consideration of such investments) does not exceed
$20,000,000 in the aggregate at any time and (ii) prior to and
immediately after giving effect to such investment, no Default
or Event of Default shall exist and be continuing;"
(ii) deleting the word "and" at the end of clause (g) thereof, (iii)
replacing the "." at the end of clause (h) thereof with a semicolon and
(iv) inserting new clauses (i) and (j) at the end thereof which shall
read as follows:
"(i) investments consisting of ownership interests in
another Person resulting from dispositions or mergers
permitted under SECTION 8.6(F) and SECTION 8.8 hereof; and
(j) the notes of purchasers described in Section
8.6(f)."
(e) Section 8.8 of the Credit Agreement is hereby deleted in
its entirety and the following new Section 8.8 is inserted in
replacement thereof:
"8.8 MERGER OR CONSOLIDATION. (a) Consolidate with or
merge into any other Person, or (b) permit any other Person to
merge into it, or (c) liquidate, wind-up or dissolve or sell,
transfer or lease or otherwise dispose of all or a substantial
part of its assets; PROVIDED, HOWEVER, (i) any Subsidiary of
the Borrower may merge or transfer all or substantially all of
its assets into or consolidate with the Borrower or any
wholly-owned Subsidiary of the Borrower, and (ii) any other
Person may merge into or consolidate with the Borrower or any
wholly-owned Subsidiary and any Subsidiary may merge into or
consolidate with any other Person in order to consummate an
Acquisition permitted by SECTION 8.2, PROVIDED FURTHER, that
any resulting or surviving entity shall execute and deliver
such agreements and other documents, including a Facility
Guaranty, and take such other action as the Agent may require
to evidence or confirm its express assumption of the
obligations and liabilities of its predecessor entities under
the Loan Documents; and PROVIDED FURTHER that Dunhill and
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any Manufacturing Subsidiary may merge with or into or
consolidate with any other Person in connection with the
disposition of Dunhill or such Manufacturing Subsidiary in
accordance with SECTION 8.6(F) so long as a result thereof the
Borrower and/or its Subsidiaries shall not be liable for or
assume any liability or obligation of any Person who was not
immediately prior to such time a Subsidiary."
3. GUARANTORS. Each of the Guarantors has joined into the execution of
this Agreement for the purpose of consenting to the amendment contained herein
and reaffirming its guaranty of the Obligations.
4. BORROWER'S REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents, warrants and certifies that:
(1) The representations and warranties made by it in
Article VI of the Credit Agreement are true on and as of the date
hereof before and after giving effect to this Agreement except that the
financial statements referred to in Section 6.6(a) shall be those most
recently furnished to each Lender pursuant to Section 7.1(a) and (b) of
the Credit Agreement;
(2) The Borrower has the power and authority to
execute and perform this Agreement and has taken all action required
for the lawful execution, delivery and performance thereof.
(3) There has been no material adverse change in the
condition, financial or otherwise, of the Borrower and its Subsidiaries
since the date of the most recent financial reports of the Borrower
received by each Lender under Section 7.1 of the Credit Agreement,
other than changes in the ordinary course of business, none of which
has been a material adverse change;
(4) The business and properties of the Borrower and
its Subsidiaries are not, and since the date of the most recent
financial report of the Borrower and its Subsidiaries received by the
Agent under Section 7.1 of the Credit Agreement have not been,
adversely affected in any substantial way as the result of any fire,
explosion, earthquake, accident, strike, lockout, combination of
workmen, flood, embargo, riot, activities of armed forces, war or acts
of God or the public enemy, or cancellation or loss of any major
contracts; and
(5) No event has occurred and no condition exists
which, upon the consummation of the transaction contemplated hereby,
constituted a Default or an Event of Default on the part of the
Borrower under the Credit Agreement or the Notes either immediately or
with the lapse of time or the giving of notice, or both.
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5. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding
and agreement of the parties hereto in relation to the subject matter hereof and
supersedes any prior negotiations and agreements among the parties relative to
such subject matter. None of the terms or conditions of this Agreement may be
changed, modified, waived or canceled orally or otherwise, except by writing,
signed by all the parties hereto, specifying such change, modification, waiver
or cancellation of such terms or conditions, or of any proceeding or succeeding
breach thereof.
6. FULL FORCE AND EFFECT OF AGREEMENT. Except as hereby specifically
amended, modified or supplemented, the Credit Agreement and all of the other
Loan Documents are hereby confirmed and ratified in all respects and shall
remain in full force and effect according to their respective terms.
7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
[Signature pages follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
BORROWER:
WATSCO, INC.
WITNESS:
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------ ---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ Title: Vice President Finance and Chief
------------------ Financial Officer
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GUARANTORS:
WATSCO COMPONENTS, INC.
P.E./DEL MAR, INC.
CDS HOLDINGS, INC.
COASTLINE DISTRIBUTION, INC.
A&C DISTRIBUTORS, INC.
GEMAIRE DISTRIBUTORS, INC.
▇.▇. ▇▇▇▇▇ DISTRIBUTORS, INC.
GEM CREDIT CORPORATION
THE FLORIDA AD COMPANY
GEMAIRE INTERNATIONAL, INC.
GEMAIRE HOLDINGS, INC.
GEMAIRE CARIBE, INC.
COMFORT SUPPLY, INC.
WATSCO EXPORT, INC.
THE HOUSTON AD COMPANY, INC.
HEATING & COOLING SUPPLY, INC.
THREE STATES SUPPLY COMPANY, INC.
CP DISTRIBUTORS, INC.
COMFORT PRODUCTS DISTRIBUTING, INC.
CENTRAL PLAINS DISTRIBUTING, INC.
CENTRAL AIR CONDITIONING DISTRIBUTORS, INC.
WEATHERTROL SUPPLY COMPANY
AIR SYSTEMS DISTRIBUTORS, INC.
DUNHILL STAFFING SYSTEMS, INC.
DUNHILL TEMPORARY SYSTEMS OF
INDIANAPOLIS, INC.
DUNHILL TEMPORARY SYSTEM OF
INDIANAPOLIS, L.P.
DUNHILL TEMPORARY SYSTEMS, INC.
WITNESS: DUNHILL PERSONNEL SYSTEM OF
NEW JERSEY, INC.
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ DUNHILL STAFFING SYSTEMS OF
------------------ MILWAUKEE, INC.
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇ DUNHILL ENTERPRISES, INC.
-------------------
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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AGENT:
NATIONSBANK, NATIONAL ASSOCIATION, as
Agent for the Lenders
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
LENDERS:
NATIONSBANK, NATIONAL ASSOCIATION
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
FIRST UNION NATIONAL BANK
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: SENIOR VICE PRESIDENT
▇▇▇▇▇▇▇ BANK, N.A.
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: VICE PRESIDENT/CORPORATE BANKING
SUNTRUST BANK, MIAMI, N.A.
By: /S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: SENIOR VICE PRESIDENT
THE BANK OF NEW YORK
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
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THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /S/ R. GLASS
-----------------------------------
Name: R. GLASS
Title: VICE PRESIDENT
COMERICA BANK
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: VICE PRESIDENT
WACHOVIA BANK, N.A.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
PNC BANK, KENTUCKY, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
THE SAKURA BANK, LIMITED
By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VICE PRESIDENT & SENIOR MANAGER
THE FUJI BANK AND TRUST COMPANY
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: VICE PRESIDENT & MANAGER
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