EXHIBIT (b)(2)
FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "First
Amendment"), dated as of November 25, 1997, is entered into among KEVCO
DELAWARE, INC., a Delaware corporation (the "Borrower"), the banks listed on the
signature pages hereof (collectively, the "Lenders"), and NATIONSBANK OF TEXAS,
N.A., as Administrative Lender (in said capacity, the "Administrative Lender").
A. The Borrower, the Lenders and the Administrative Lender are parties to
that certain Amended and Restated Credit Agreement, dated as of February 27,
1997 (the "Credit Agreement"; capitalized terms used herein and not defined
herein shall have the meaning given to them in the Credit Agreement).
B. As of October 21, 1997, Kevco, Inc., a Texas corporation (the
"Parent"), SCC Acquisition Corp., an Indiana corporation and wholly-owned
Subsidiary of the Parent ("SCC"), and Shelter Components Corporation, an Indiana
corporation ("Shelter"), entered into an Agreement and Plan of Merger (the
"Acquisition Agreement"), upon the terms and subject to the conditions of which
the Parent will acquire all of the outstanding shares (the "Shelter Shares") of
common stock of Shelter.
C. In order to obtain a portion of the financing required to consummate
the acquisition of the Shelter Shares, the Parent is issuing $105,000,000
principal amount of its Senior Subordinated Notes due 2007 ("Senior Subordinated
Notes"), pursuant to that certain Indenture, among the Parent, certain
Subsidiaries of the Parent (including the Borrower), and United States Trust
Company of New York, as Trustee (the "Trustee").
D. The proceeds from the issuance of the Senior Subordinated Notes, and
certain other amounts (collectively, the "Escrowed Funds"), will be held by the
Trustee in escrow pursuant to an Escrow Agreement between the Parent and the
Trustee (the "Escrow Agreement"), and subject to the terms thereof, will be
released to (i) the Parent when the Parent shall have purchased such number of
Shelter Shares as constitutes on a fully-diluted basis at least a majority of
the total number of outstanding shares of Shelter (the "Qualified Tender Offer
Purchase"), or (ii) to the Trustee if, as of December 31, 1997, the conditions
for release of the Escrowed Funds under the Escrow Agreement have not been
satisfied, whereupon the Escrowed Funds shall be used to redeem the Senior
Subordinated Notes.
E. Contemporaneously with the Qualified Tender Offer Purchase, the Parent
and the Borrower will refinance all indebtedness outstanding under the Credit
Agreement pursuant to a Second Amended and Restated Credit Agreement, whereupon
the Credit Agreement shall terminate and be of no further force and effect.
F. A technical amendment to the Credit Agreement is necessary in order to
permit the issuance of the Senior Subordinated Notes prior to the termination of
the Credit Agreement.
G. The Borrower, the Lenders and the Administrative Lender desire to amend
the Credit Agreement to permit the issuance of the Senior Subordinated Notes
prior to the termination of 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 Lender covenant and agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
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(a) Section 1.1 of the Credit Agreement shall be amended by adding the
following defined terms thereto in proper alphabetical order:
"Escrow Indebtedness" means the obligations of the Parent, the
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Borrower and its Subsidiaries in respect of the Senior Subordinated Notes
so long as there are funds held by the Escrow Agent for the benefit of the
Trustee and the holders of the Senior Subordinated Notes in respect of the
Senior Subordinated Notes in an amount to fully satisfy such obligations.
"Senior Subordinated Notes" means those certain Senior Subordinated
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Notes of the Parent due 2007 in aggregate principal amount of $105,000,000.
"Trustee" means United States Trust Company of New York, in its
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capacity as Trustee with respect to the Senior Subordinated Notes.
(b) The definition of "Permitted Liens" set forth in Section 1.1 of the
Credit Agreement is hereby amended by (i) deleting "and" after clause (g)
thereof, (ii) deleting "." after clause (h) thereof and inserting "; and" in
lieu thereof, and (iii) adding a new clause (i) thereto to read as follows:
"(i) Liens on the proceeds of the Senior Subordinated Notes held in
escrow by the Trustee pending distribution pursuant to the terms of such
escrow."
(c) Section 7.1 of the Credit Agreement is hereby amended by (i) deleting
"and" after clause (g) thereof, (ii) relettering existing clause (h) thereof as
clause (i), and (iii) adding a new clause (h) thereto to read as follows:
"(h) Escrow Indebtedness; and"
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(d) For purposes of calculation of financial covenants set forth in the
Credit Agreement, Escrow Indebtedness will not be deemed to be Indebtedness.
2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
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execution and delivery hereof, the Borrower represents and warrants that,as of
the date hereof and after giving effect to the amendments provided in the
foregoing Section 1:
(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, deliver and
perform this First Amendment and the Credit Agreement, as amended by this First
Amendment, the execution, delivery and performance of this First Amendment and
the Credit Agreement, as amended by this First Amendment, have been duly
authorized by all corporate action of the Borrower, and this First Amendment and
the Credit Agreement, as amended hereby, constitute the legal, valid and binding
obligations of the Borrower, enforceable in 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;
(d) neither the execution, delivery and performance of this First Amendment
or the Credit Agreement, as amended by this First Amendment, nor the
consummation of any transactions herein or therein, will contravene or conflict
with any law, rule or regulation to which the Borrower or any of its
Subsidiaries is subject or any indenture, agreement or other instrument to which
the Borrower or any of its Subsidiaries or any of their respective property is
subject; and
(e) no authorization, approval, consent or other action by, notice to, or
filing with, any governmental authority or other Person not already obtained, is
required for the (i) execution, delivery or performance by the Borrower of this
First Amendment and the Credit Agreement, as amended by this First Amendment or
(ii) the acknowledgement by the Parent and each Subsidiary of this First
Amendment.
3. CONDITIONS OF EFFECTIVENESS. The First Amendment shall be effective
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as of November 25, 1997, subject to the following:
(a) the Administrative Lender shall have received counterparts of this
First Amendment executed by the Determining Lenders;
(b) the Administrative Lender shall have received counterparts of this
First Amendment executed by the Borrower and acknowledged by the Parent and each
Subsidiary;
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(c) the representations and warranties set forth in Section 2 shall be true
and correct; and
(d) the Administrative Lender and the Lenders shall have received in form
and substance satisfactory to the Administrative Lender and the Lenders, such
other documents, certificates and instruments as the Lenders shall reasonably
require.
4. PARENT ACKNOWLEDGEMENT. By signing below, the Parent (i)
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acknowledges, consents and agrees to the execution by the Borrower of this First
Amendment, (ii) acknowledges and agrees that its obligations in respect of its
Parent Guaranty are not released, diminished, waived, modified, impaired or
affected in any manner by this First Amendment or any of the provisions
contemplated herein, (iii) ratifies and confirms its obligations under its
Parent Guaranty, and (iv) acknowledges and agrees that it has no claims or
offsets against, or defenses or counterclaims to, its Parent Guaranty.
5. SUBSIDIARY ACKNOWLEDGEMENT. By signing below, each Subsidiary (i)
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acknowledges, consents and agrees to the execution by the Borrower of this First
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 First 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.
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(a) Upon the effectiveness of this First 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
First Amendment.
(b) The Credit Agreement, as amended by this First Amendment, and all other
Loan Documents shall remain in full force and effect and are hereby ratified and
confirmed.
7. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on demand all costs
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and expenses of Administrative Lender in connection with the preparation,
reproduction, execution and delivery of the First Amendment and the other
instruments and documents to be delivered hereunder (including the reasonable
fees and out-of-pocket expenses of counsel for Administrative Lender with
respect thereto and with respect to advising Administrative Lender as to its
rights and responsibilities under the Credit Agreement, as amended by this First
Amendment).
8. EXECUTION IN COUNTERPARTS. This First Amendment may be executed in
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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 taken together shall constitute but one and the
same instrument.
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9. GOVERNING LAW; BINDING EFFECT. This First Amendment shall be governed
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by and construed in accordance with the laws of the State of Texas and shall be
binding upon Borrower and each Lender and their respective successors and
assigns.
10. HEADINGS. Section headings in this First Amendment are included
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herein for convenience of reference only and shall not constitute a part of this
First Amendment for any other purpose.
11. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS FIRST
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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 First Amendment
as of the date first above written.
KEVCO DELAWARE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO, Vice President, Treasurer
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NATIONSBANK OF TEXAS, N.A., as
Administrative Lender and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Senior Vice President
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GUARANTY FEDERAL BANK, F.S.B.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: V.P.
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THE SUMITOMO BANK, LIMITED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President and Manager
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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: V.P.
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ACKNOWLEDGED AND AGREED:
KEVCO, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO, Vice President, Treasurer
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SUNBELT WOOD COMPONENTS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO, Vice President, Treasurer
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▇▇▇▇▇ SUPPLY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO, Vice President, Treasurer
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CONSOLIDATED FOREST PRODUCTS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO, Vice President, Treasurer
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ENCORE INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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Title: CFO, Vice President, Treasurer
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