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EXHIBIT 10.71
SECOND WAIVER
THIS SECOND WAIVER (this "Second Waiver") is entered into as of the
15th day of February, 1999, by and among the banks listed on the signature pages
hereof (the "Lenders"), KEVCO, INC., a Texas corporation (the "Borrower"), and
NATIONSBANK, N.A. (successor by merger to NationsBank of Texas, N.A.), as
Administrative Agent for the Lenders (the "Administrative Agent") to the extent
and in the manner provided for in the Credit Agreement (defined below and herein
so called).
BACKGROUND
(a) The Lenders, the Borrower, 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, and
that certain Second Amendment to Credit Agreement, dated as of October
27, 1998 (but effective as of September 30, 1998) (said Credit
Agreement, as amended, the "Credit Agreement"; terms defined in the
Credit Agreement and not otherwise defined herein shall be used herein
as defined in the Credit Agreement).
(b) The Lenders (other than Wells Fargo Bank, N.A.), the
Borrower and the Administrative Agent entered into a Waiver, dated
December 30, 1998 (the "First Waiver"), waiving any Event of Default
with respect to Sections 7.10 and 7.11 of the Credit Agreement which
may have occurred as a result of the failure of the Borrower to comply
with said Sections for the fiscal quarter ending December 31, 1998 (the
"Existing Events of Default").
(c) The First Waiver will expire by its terms on February 15,
1999, whereupon the Lenders will have the option to exercise all rights
and remedies that they have under the Credit Agreement with respect to
the Existing Events of Default, including but not limited to, refusing
to make any additional Advances under the Credit Agreement.
(d) The Borrower has requested an extension of the waiver with
respect to the Existing Events of Default, thereby allowing the
Borrower to obtain additional Advances under the Credit Agreement which
would not otherwise be permitted under the terms of the Credit
Agreement and the First Waiver.
(e) As an accommodation to the Borrower in order to permit the
Borrower to obtain additional Advances under the Credit Agreement, the
Lenders, but conditioned upon the Borrower's compliance with the terms
and conditions set forth herein, hereby agree to extend the termination
of the waiver with respect to the Existing Events of Default as
provided herein.
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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 parties
hereto covenant and agree as follows:
1. SECOND WAIVER. Subject to the satisfaction of the conditions of
effectiveness set forth in Section 8 of this Second Waiver and the other
conditions contained herein, the Lenders hereby waive the Existing Events of
Default.
2. TERMINATION. This Second Waiver shall automatically terminate and be
of no further force or effect on the earlier to occur of (a) February 25, 1999
or (b) breach of or default by the Borrower under any agreement or covenant
contained in this Second Waiver (the "Waiver Termination"). The Waiver
Termination shall be automatic and will take place without any action by the
Administrative Agent or any Lender.
3. NO WAIVER. This Second Waiver shall not be and shall not be deemed
to be a waiver of any Defaults or Events of Default under the Credit Agreement
other than the Existing Events of Default.
4. COOPERATION BY BORROWER. The Borrower shall fully cooperate with all
reasonable requests made by the Administrative Agent or any Lender with respect
to (a) the granting and perfection of security interests in Collateral and (b)
information regarding all books, records and assets of the Borrower and its
Subsidiaries and will permit and cooperate with any collateral audit undertaken
by or on behalf of the Lenders, with all such costs to be borne by the Borrower.
5. ACKNOWLEDGMENT OF THE BORROWER. The Borrower acknowledges and agrees
that the Lenders executing this Second Waiver have done so in their sole
discretion and without any obligation. The Borrower further acknowledges and
agrees that any action taken or not taken by the Lenders or the Administrative
Agent prior to, on or after the date hereof shall not (a) create any obligation
of the Lenders after termination of this Waiver, (b) constitute a waiver or
modification of any term, covenant or provision of any Loan Document other than
with respect to the Existing Events of Default or (c) prejudice any rights or
remedies other than with respect to the Existing Events of Default which the
Administrative Agent or any Lender now has or may have in the future under any
Loan Document, Applicable Law or otherwise, all of which rights and remedies are
expressly reserved by the Administrative Agent and the Lenders.
6. RELEASE.
(a) The Borrower and each Guarantor hereby unconditionally and
irrevocably remises, acquits, and fully and forever releases and
discharges the Administrative Agent and the Lenders and all respective
affiliates and subsidiaries of the Administrative Agent and the
Lenders, their respective officers, servants, employees, agents,
attorneys, principals, directors and shareholders, and their respective
heirs, legal representatives, successors and assigns (collectively, the
"Released Lender Parties") from any and all
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claims, demands, causes of action, obligations, remedies, suits,
damages and liabilities (collectively, the "Borrower Claims") of any
nature whatsoever, whether now known, suspected or claimed, whether
arising under common law, in equity or under statute, which the
Borrower or any Guarantor ever had or now has against the Released
Lender Parties which may have arisen at any time on or prior to the
date of this Second Waiver and which were in any manner related to any
of the Loan Documents or the enforcement or attempted enforcement by
the Administrative Agent or the Lenders of rights, remedies or
recourses related thereto.
(b) The Borrower and each Guarantor covenants and agrees never
to commence, voluntarily aid in any way, prosecute or cause to be
commenced or prosecuted against any of the Released Lender Parties any
action or other proceeding based upon any of the Borrower Claims which
may have arisen at any time on or prior to the date of this Second
Waiver and were in any manner related to any of the Loan Documents.
(c) The agreements of the Borrower and each Guarantor set
forth in this Section 6 shall survive termination of this Second
Waiver.
7. 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 Second Waiver set forth in
the foregoing Section 1:
(a) the representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct on and as
of the date hereof as made on and as of such date; and
(b) no event has occurred and is continuing which constitutes
a Default or an Event of Default.
8. CONDITIONS OF EFFECTIVENESS. This Second Waiver shall be effective
(and the obligation of the Lenders to make future Advances under the Credit
Agreement) as of February 15, 1999, subject to the following:
(a) the Administrative Agent shall have received counterparts
of this Second Waiver executed by the Borrower and the Determining
Lenders;
(b) the representations and warranties set forth in Section 7
shall be true and correct;
(c) all actions required by the Lenders or the Administrative
Agent to complete the taking and perfection of Liens in the Collateral
the Borrower has agreed to provide to the Lenders shall be taken and
completed, including without limitation recordation of appropriate
deeds and mortgages in the title records; and
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(d) the Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent and its counsel,
such other documents, certificates and instruments as the
Administrative Agent shall require.
9. 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 Waiver and the
other instruments and documents to be delivered hereunder.
10. EXECUTION IN COUNTERPARTS. This Second Waiver may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each 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.
11. GOVERNING LAW: BINDING EFFECT. This Second Waiver shall be governed
by and construed in accordance with the laws of the State of Texas and shall be
binding upon the Borrower, the Administrative Agent, each Lender and their
respective successors and assigns.
12. HEADINGS. Section headings in this Second Waiver are included
herein for convenience of reference only and shall not constitute a part of this
Second Waiver for any other purpose.
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties hereto have executed this Second Waiver
as the date first above written.
KEVCO, INC.
By: /s/ Jerry E. Kimmel
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Name: Jerry E. Kimmel
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Title: Chairman, President, CEO
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NATIONSBANK, N.A., as Administrative Agent and
as a Lender
By: /s/ William E. Livingstone, IV
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Name: William E. Livingstone, IV
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Title: Senior Vice President
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NATIONAL CITY BANK KENTUCKY
By:
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Name:
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Title:
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GUARANTY FEDERAL BANK, F.S.B.
By: /s/ Robert S. Hays
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Name: Robert S. Hays
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Title: Vice President
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WELLS FARGO BANK, N.A.
By: /s/ Dana D. Cagle
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Name: Dana D. Cagle
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Title: Vice President
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PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc., as its
Investment Manager
By: /s/ Michel Prince, CFA
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Name: Michel Prince, 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: /s/ Michael J. Campbell
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Name: Michael J. Campbell
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Title: Senior Vice President &
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Portfolio Manager
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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 CAPITAL
MANAGEMENT CORPORATION,
General Partner of Alliance
Capital Management, L.P.
By: /s/ Joel Serebransky
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Name: Joel Serebransky
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Title: Vice President
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MERRILL LYNCH DEBT STRATEGIES
PORTFOLIO
By. Merrill Lynch Asset Management, L.P., as
Investment Advisor
By: /s/ Paul Travers
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Name: Paul Travers
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Title: Authorized Signatory
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Merrill Lynch Debt Global Investment Series:
INCOME STRATEGIES PORTFOLIO
By. Merrill Lynch Asset Management, L.P., as
Investment Advisor
By: /s/ Paul Travers
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Name: Paul Travers
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Title: Authorized Signatory
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BANK ONE, TEXAS, N.A.
By: /s/ Bradley C. Peters
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Name: Bradley C. Peters
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Title: Vice President
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PAM Capital Funding LP
By: Highland Capital Management, L.P., as
Collateral Manager
By: /s/ James Dondero, CFA, CPA
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Name: James Dondero, CFA, CPA
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Title: President, Highland Capital
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Management L.P.
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ACKNOWLEDGED AND AGREED:
KEVCO MANAGEMENT, INC.
By: /s/ Jerry E. Kimmel
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Name: Jerry E. Kimmel
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Title: Chairman, President & CEO
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KEVCO HOLDING, INC.
By: /s/ Jerry E. Kimmel
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Name: Jerry E. Kimmel
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Title: Chairman, President & CEO
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KEVCO GP, INC.
By: /s/ Jerry E. Kimmel
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Name: Jerry E. Kimmel
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Title: Chairman, President & CEO
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KEVCO COMPONENTS, INC.
By: /s/ Jerry E. Kimmel
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Name: Jerry E. Kimmel
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Title: Chairman, President & CEO
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DCM DELAWARE, INC.
By: /s/ Jerry E. Kimmel
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Name: Jerry E. Kimmel
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Title: Chairman, President & CEO
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KEVCO MANUFACTURING, L.P.
By: KEVCO GP, INC., its General Partner
By: /s/ Jerry E. Kimmel
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Name: Jerry E. Kimmel
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Title: Chairman, President & CEO
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KEVCO DISTRIBUTION, L.P.
By: KEVCO GP, INC., its General Partner
By: /s/ Jerry E. Kimmel
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Name: Jerry E. Kimmel
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Title: Chairman, President & CEO
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