<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-K/A
(AMENDMENT NO. 1)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___.
Commission file number 000-21621
----------------------
KEVCO, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-2666013
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Kevco, Inc.
1300 S. University Drive, Suite 200 76107
Fort Worth, Texas (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (817) 332-2758
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Name of each exchange
Title of Each Class on which registered
--------------------------- -----------------------
Common Stock, The Nasdaq Stock Market
par value of $.01 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or informational
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [x]
The aggregate market value of voting stock of the registrant held by
non-affiliates of the registrant was $21,877,460 on March 25, 1999, based on the
closing price of the registrant's Common Stock on such date of $5.50 per share,
as reported on The Nasdaq Stock Market.
As of March 25, 1999, 6,856,437 shares of the registrant's Common Stock
were outstanding.
<PAGE> 2
The Registrant hereby amends its Form 10-K, Part III, Items 10, 11, 12
and 13 and Part IV, Item 14 as follows:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The name, age and position of each executive officer of the Company is
set forth under the heading "Executive Officers" in Item 1 of this report, which
information is incorporated herein by reference.
The following sets forth information as of April 15, 1999, as to each
of the directors of the Company, including their ages and for directors that are
not also listed under the heading "Executive Officers" in Item 1 of this report,
their present principal occupations, other business experience during the last
five years, membership on committees of the Board of Directors and directorships
in other publicly-held companies.
<TABLE>
<CAPTION>
YEAR
TERM AS
DIRECTOR
NAME AGE POSITION EXPIRES
- ---- --- -------- ---------
<S> <C> <C> <C>
Jerry E. Kimmel 61 Chairman of the Board, 2000
President and Chief Executive
Officer
Ellis L. McKinley, Jr. 47 Vice President, Chief Financial 1999
Officer, Treasurer and Director
Richard Nevins (1) 51 Director 2001
Richard S. Tucker (1) 55 Secretary and Director 2000
Gregory G. Kimmel 30 Vice President and Director 2000
</TABLE>
- ----------------
(1) Member of the Audit Committee and the Compensation Committee
Richard Nevins has served as a director of the Company since November
1996. Since 1992, Mr. Nevins has served as President of Richard Nevins &
Associates, a financial advisory firm. Mr. Nevins has been a managing director
of Jefferies & Co., an investment banking firm, since July 1998. Since March
1998, Mr. Nevins has served as a director of Renaissance Cosmetics, Inc. From
December 1997 to June 1998, Mr. Nevins served as a director of ERLY Industries,
from 1995 to October 1996, he served as a director of Fruehauf Trailer
Corporation, from 1995 to 1996, he served as a director of Ampex Corporation and
from 1993 to 1995 he served as a director of The Actava Group (now Metromedia
International Group). During 1996, Mr. Nevins served as acting Chief Operating
Officer and Chief Restructuring Officer for Sun World International, a
California agricultural firm, following the filing of a petition in bankruptcy
by Sun World International. Mr. Nevins received his B.A. in Economics from the
University of California, Riverside in 1972 and his M.B.A. from Stanford
Graduate School of Business in 1975.
<PAGE> 3
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than 10%
of a registered class of the Company's equity securities, to file initial
reports of ownership and reports of changes in ownership with the Securities and
Exchange Commission (the "SEC"). Such persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it
with respect to fiscal 1998, or written representations from certain reporting
persons, the Company believes that all filing requirements applicable to its
officers, directors and persons who own more than 10% of a registered class of
the Company's equity securities have been complied with.
ITEM 11. EXECUTIVE COMPENSATION.
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding
compensation paid during each of the Company's last three fiscal years the chief
executive officer and each of the Company's other most highly compensated
executive officers, not exceeding four, whose total annual compensation for 1998
based on salary and bonus earned during 1998 exceeded $100,000 (the "Named
Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL FISCAL OPTIONS/ ALL OTHER
POSITION YEAR SALARY($) BONUS($) SARS(#) COMPENSATION($)
<S> <C> <C> <C> <C> <C>
Jerry Kimmel, 1998 $250,000 $238,299 - $34,821(1)
Chairman of the 1997 $250,000 $244,961 - $13,593(2)
Board, President and 1996 $366,271 $249,600 - $17,163(3)
Chief Executive
Officer
Clyde A. Reed, Jr., 1998 $224,477 $59,842 - $14,470(4)
Executive Vice 1997 $204,540 $81,438 - $12,665(5)
President and Chief 1996 $188,088 $96,667 11,750 $29,756(6)
Operating Officer
Ellis L. McKinley, Jr., 1998 $177,824 $25,026 - $ -
Vice President, Chief 1997 $162,975 $27,146 - $ 1,047(7)
Financial Officer and 1996 $145,980 $29,167 14,400 $ 1,057(7)
Treasurer
C. Lee Denham, 1998 $145,220 $ 70,054 - $ 590(8)
President, Sunbelt 1997 $114,095 $ 98,178 - $ 1,594(9)
1996 $ 95,580 $222,221 9,400 $ 1,439(10)
</TABLE>
<PAGE> 4
- -----------------
(1) Consists of $11,501, representing personal use of a Company supplied
car and $23,320, representing personal use of a company supplied
aircraft.
(2) Consists of $12,546, representing personal use of a Company supplied
car and $1,047, representing the Company's contribution to such
individual's 401(k) Plan account.
(3) Consists of $12,546, representing personal use of a Company supplied
car, $3,560, representing payments by the Company for medical insurance
premiums and $1,057, representing the Company's contribution to such
individual's 401(k) Plan account.
(4) Consists of $2,470, representing personal use of a Company supplied
car, and $12,000, representing expense recognized by the Company in
1998 relating to future payments to be made under a deferred
compensation agreement.
(5) Consists of $3,851, representing personal use of a Company supplied
car, $7,757, representing expense recognized by the Company in 1997
relating to future payments to be made under a deferred compensation
agreement and $1,047, representing the Company's contribution to such
individual's 401(k) Plan account.
(6) Consists of $4,518, representing personal use of a Company supplied
car, $24,181, representing expense recognized by the Company in 1996
relating to future payments to be made under a deferred compensation
agreement and $1,057, representing the Company's contribution to such
individual's 401(k) Plan account.
(7) Represents the Company's contribution to such individual's 401(k) Plan
account.
(8) Consists of $590, representing personal use of a Company supplied car.
(9) Consists of $547, representing personal use of a Company supplied car
and $1,047, representing the Company's contribution to such
individual's 401(k) Plan account.
(10) Consists of $377, representing personal use of a Company supplied car
and $1,057, representing the Company's contribution to such
individual's 401(k) Plan account.
YEAR END OPTION VALUES
The following table presents the information regarding the value of
stock options outstanding at December 31, 1998 held by each of the Named
Executive Officers. No stock options were exercised by or granted to the Named
Executive Officers in 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS/SARS AT FY-END(#) AT FY-END($)(1)
---------------------------------- --------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Jerry Kimmel - - - -
Clyde A. Reed, Jr. 18,847(2) - $11,426 -
C. Lee Denham 9,400(3) - - -
Ellis McKinley, Jr. 17,450(4) 4,000(5) $11,351 -
</TABLE>
<PAGE> 5
- ---------------------
(1) The closing price for the Company's Common Stock as reported through
The Nasdaq Stock Market on December 31, 1998, was $7.25. Value is
calculated on the basis of the difference between the option exercise
price and $7.25 multiplied by the number of shares of Common Stock
underlying the option.
(2) Consists of options to acquire 7,097 shares of Common Stock at $5.64
per share and options to acquire 11,750 shares of Common Stock at
$11.17 per share.
(3) Consists of options to acquire 9,400 shares of Common Stock at $11.17
per share.
(4) Consists of options to acquire 7,050 shares of Common Stock at $5.64
per share, options to acquire 9,400 shares of Common Stock at $11.17
per share and options to acquire 1,000 shares of Common Stock at $13.50
per share.
(5) Consists of options to acquire shares of Common Stock at $13.50 per
share, vesting at 500 shares per year.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company do not receive additional
compensation for serving as directors. Each director who is not an employee of
the Company receives a fee of $1,000 for attendance at each Board of Directors
meeting and $500 for attendance at each Board committee meeting (unless held on
the same day as a Board of Directors meeting). All directors of the Company are
reimbursed for out-of-pocket expenses incurred in attending meetings of the
Board of Directors or committees thereof, and for other out-of-pocket expenses
incurred in their capacity as directors of the Company.
EMPLOYMENT AGREEMENTS
Effective October 1, 1996, Mr. Kimmel entered into a five year
employment agreement with Kevco providing for an annual base salary of $250,000.
In addition to base salary, beginning in 1997, Mr. Kimmel, through his
employment agreement, has been eligible for an annual bonus equal to 2.4% of the
Company's income before income taxes for the year provided that income before
income taxes is at least $5.0 million. Such salary and bonus are subject to
increase, but not decrease, by the Company. Increases in Mr. Kimmel's
compensation are reviewed annually by the Company's Compensation Committee in a
manner so as to qualify under the performance based compensation provisions of
the Internal Revenue Code. Under the agreement, Mr. Kimmel has agreed to perform
services on behalf of the Company and its subsidiaries in Fort Worth, Texas as
he reasonably determines is necessary to carry out his duties under the
agreement. Under the agreement, Mr. Kimmel, his spouse and dependents are, until
the death of the survivor of Mr. Kimmel and his spouse, entitled to participate
at Kevco's expense in health programs offered to Company employees generally or,
if insurance coverage is not available, to have their health care costs
reimbursed by the Company. Under the agreement, upon the death of Mr. Kimmel,
the Company would continue to pay his base salary for the remainder of the then
existing agreement term. The agreement can be terminated by the Company only for
cause (as defined in such agreement). The employment agreement, which was
guaranteed by the subsidiaries of the Company, is automatically extended for an
additional year at the end of each year's service.
Effective May 24, 1977, Mr. Reed entered into a retirement agreement
with the Company that generally provides that the Company will pay Mr. Reed or
his beneficiaries $55,000 per year for 10 years if Mr. Reed is employed with the
Company at age 65 or upon death or disability. Such agreement also provides for
a smaller lump sum payment that the Company will make upon Mr. Reed's
termination of employment prior to age 65, death or disability. Such lesser
amount equals approximately $14,000 for each year following the effective date
of the agreement, up to such termination.
<PAGE> 6
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company leases three of its warehouse locations from an affiliated
partnership (K&E Land & Leasing, a Texas general partnership) of which Mr.
Kimmel is a managing partner. The Company also leases computer equipment from
K&E Land & Leasing. These leases (i) expire in November 2003, April 2005,
October 2007 and October 2003, respectively, (ii) provide for total future (i.e.
post 1998) base rent payments of approximately $630,000, $578,000, $2.0 million
and $1.1 million, respectively, and (iii) require payments to be made in equal
monthly amounts. As of December 31, 1998, Mr. Kimmel's indirect interest in such
leases was 38% and Gregory G. Kimmel's aggregate beneficial interest in such
leases was 4%. Mr. Kimmel's immediate family members (including Gregory G.
Kimmel's beneficial interest) owned indirect interests in such leases of 12%.
Aggregate expenditures by the Company under such leases in 1998 were
approximately $672,000, of which approximately $255,000 was indirectly
attributable to Jerry Kimmel's interests in such partnership (excluding
immediate family members' interests) and of which approximately $27,000 was
indirectly attributable to Gregory G. Kimmel's beneficial interest. It is
anticipated that aggregate expenditures by the Company under such leases for the
remainder of their terms will be approximately $4.3 million, of which
approximately $1.6 million will be indirectly payable (less partnership
expenses) to Mr. Kimmel (excluding immediate family members' interests) and of
which approximately $172,000 will be indirectly payable (less partnership
expenses) to Gregory G. Kimmel. The Company believes that the amounts it has
paid under such leases have not been less favorable to the Company than had the
leases been negotiated on an arms-length basis.
Two of the leased warehouses were financed through economic development
and industrial revenue bonds; one series of which was issued by Newton, Kansas
in the original principal amount of $575,000, and with respect to which the
Company is the sub-lessee of the premises and a co-guarantor, and one series of
which was issued by Elkhart, Indiana in the original principal amount of
$400,000, and with respect to which the Company is the lessee of the premises.
Gregory G. Kimmel and James Kimmel, Jerry Kimmel's brother, earned, in
the aggregate, approximately $192,000 in compensation in 1998. Richard Tucker, a
director of the Company in 1998 and currently Secretary of the Company, is a
partner in Jackson Walker L.L.P., which is the Company's principal outside legal
counsel.
<PAGE> 7
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth information with respect to beneficial
ownership of Common Stock as of April 15, 1999 by (i) all persons known to the
Company to be the beneficial owner of 5% or more of the Common Stock, (ii) each
director of the Company, (iii) each of the named Executive Officers, and (iv)
all the Company directors and executive officers as a group. This table does not
include shares of Common Stock that may be purchased pursuant to options not
exercisable within 60 days of April 15, 1999. All persons listed have sole
voting and investment power with respect to their shares unless otherwise
indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNER OR OF BENEFICIAL OF CLASS
NUMBER OF PERSONS IN GROUP OWNERSHIP --------
- -------------------------- ---------
<S> <C> <C>
Jerry E. Kimmel(1) 3,744,760(2) 54.6%
Clyde A. Reed, Jr. 30,015(3) *
Ellis L. McKinley, Jr. 22,450(4) *
Richard S. Tucker 5,500(5) *
Richard Nevins 7,405(5) *
C. Lee Denham 9,400(6) *
Gregory G. Kimmel 221,836(7) 3.2%
Wellington Management Company, 473,000(9) 6.9%
L.L.P.(8)
Brinson Partners, Inc.(10) 557,000(11) 8.1%
All directors and executive officers as 4,041,366(12) 58.4%
a group (7 persons)
</TABLE>
- -----------------------------------
* Less than 1%
(1) The address of Mr. Kimmel is University Centre I, 1300 S. University
Drive, Suite 200, Fort Worth, Texas 76107.
(2) Excludes 626,386 shares of outstanding Common Stock and 15,299 shares
of Common Stock issuable upon exercise of options beneficially owned by
Mr. Kimmel's adult children and his brother. Mr. Kimmel disclaims
beneficial ownership of such shares.
(3) Includes 18,846 shares of Common Stock subject to presently exercisable
options.
(4) Includes 17,450 shares of Common Stock subject to presently exercisable
options, or options exercisable within 60 days.
(5) Includes 2,500 shares of Common Stock subject to presently exercisable
options.
(6) Consists of 9,400 shares of Common Stock subject to presently
exercisable options.
(7) Includes 12,949 shares of Common Stock subject to presently exercisable
options and excludes 2,406 shares of Common Stock held as custodian for
such individual's children.
(8) The address of Wellington Management Company, LLP ("WMC") is 75 State
Street, Boston, Massachusetts 02109.
<PAGE> 8
(9) Based on a statement on Schedule 13G/A filed with the Securities and
Exchange Commission dated February 10, 1999, WMC has shared power to
dispose or direct the disposition of 473,000 shares of Common Stock and
shared power to vote or to direct the vote of 263,000 shares. As part
of such Schedule 13G/A, WMC disclosed that its relevant subsidiary
under Rule 13d-1(b)(1)(ii)(G) is Wellington Trust Company, NA., a
wholly-owned subsidiary of WMC and a bank as defined in Section 3(a)(6)
of the Securities Exchange Act of 1934, which has the same business
address as WMC.
(10) The address of Brinson Partners, Inc. ("BPI") is 209 South LaSalle,
Chicago, Illinois. The address of UBS AG ("UBSAG") is Bahnhofstrasse 45
8021, Zurich, Switzerland.
(11) Based on a statement on Schedule 13G filed with the Securities and
Exchange Commission dated February 16, 1999, BPI and UBSAG have shared
voting power and shared disposition power of 557,000 shares of common
stock. BPI is an Investment Adviser registered under section 203 of the
Investment Advisers Act of 1940. UBSAG is classified as a Bank as
defined in Section 3(a)(6) of the Securities Exchange Act of 1934
pursuant to no action relief granted by the staff of the Securities and
Exchange Commission. BPI is an indirect wholly-owned subsidiary of
UBSAG. UBSAG is reporting indirect beneficial ownership of holdings by
reason of its ownership of BPI. UBSAG does not hereby affirm the
existence of a group within the meaning of Rule 13d-5(b)(1).
(12) Includes 61,145 shares of Common Stock subject to presently exercisable
options.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information concerning relationships and related transactions is
set forth in Item 11 of this report under the heading "Compensation Committee
Interlocks and Insider Participation," which information is incorporated herein
by reference.
<PAGE> 9
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. INDEX TO FINANCIAL STATEMENTS.
The following Financial Statements are included herein:
<TABLE>
<S> <C>
Report of Independent Accountants.............................................................F-1
Consolidated Balance Sheets of December 31, 1998 and 1997.....................................F-2
Consolidated Statements of Income for the Years Ended
December 31, 1998, 1997 and 1996..............................................................F-3
Consolidated Statements of Stockholders' Equity
for the Years Ended December 31, 1998, 1997 and 1996..........................................F-4
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1998, 1997 and 1996..............................................................F-5
Notes to Consolidated Statements..............................................................F-7
</TABLE>
2. INDEX TO FINANCIAL SCHEDULES.
No schedules are included because of the absence of conditions
under which they are required or because information is
disclosed in the financial statements or notes thereto.
3. EXHIBITS
The exhibits filed as a part of this report are listed under
"Exhibits" at subsection (c) of this Item.
(b) REPORTS OF FORM 8-K:
The Company filed a Current Report on Form 8-K dated December
23, 1998, announcing that it had entered into a stock purchase
agreement with Wingate Partners II, L.P. ("Wingate") and that
a stock purchase agreement had been entered into between
Wingate and Jerry E. Kimmel.
<PAGE> 10
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<S> <C>
2.1 Merger Agreement, dated June 6, 1995 by and among Kevco, Inc. and
Service Supply Systems, Inc., joined by a wholly-owned subsidiary of
Kevco, Inc.(1)
2.2 Form of Plan and Agreement of Merger between Kevco Texas, Inc. and
Kevco Delaware, Inc.(1)
2.3 Form of Bill of Sale and General Assignment from Kevco Delaware, Inc.,
as Assignor, to Sunbelt Wood Components, Inc., as Assignee.(1)
2.4 Form of Assumption Agreement between Kevco Delaware, Inc. and Sunbelt
Wood Components, Inc.(1)
2.5 Asset Purchase Agreement by and among Consolidated Forest Products,
Inc., Consolidated Forest Products, L.L.C. and the members of
Consolidated Forest Products, L.L.C.(2)
2.6 Stock Purchase Agreement by and among Kevco Delaware, Inc. and the
shareholders of Bowen Supply, Inc.(2)
2.7 Agreement and Plan of Merger, dated as of October 21, 1997, between
Kevco, Inc., SCC Acquisition Corp. and Shelter Components
Corporation.(6)
2.8 Stock Purchase Agreement dated as of December 23, 1998 between Wingate
Partners II, L.P. and the Company.(11)(8)
2.9 Stock Purchase Agreement dated as of December 23, 1998 among Wingate
Partners II, L.P., Jerry E. Kimmel, and the Company.(11)(8)
2.10 Letter, dated February 15, 1999, to Kevco, Inc. from Wingate Partners
II, L.P.(13)
2.11 Letter, dated February 15, 1999, to Jerry E. Kimmel from Wingate
Partners II, L.P.(13)
3.1 Articles of Incorporation of Kevco, Inc., as amended.(1)
3.2 Bylaws of Kevco, Inc.(1)
4.1 Form of certificate evidencing ownership of the Common Stock of Kevco,
Inc.(1)
10.1 Amendment No. 2 to 1995 Stock Option Plan (Amended and Restated 1995
Stock Option Plan of Kevco, Inc.) and Supplementary Letter.(1)*
10.2 1996 Stock Option Plan of Kevco, Inc., as amended, and Supplementary
Letter.(1)*
10.3 Form of Amended and Restated Employment Agreement between Gerald E.
Kimmel and Kevco, Inc., joined therein by Kevco Delaware, Inc. and
Sunbelt Wood Components, Inc.(1)*
10.4 Employment Agreement between C. Lee Denham and Kevco, Inc. dated June
30, 1995.(1)*
</TABLE>
<PAGE> 11
<TABLE>
<S> <C>
10.5 Lease between K & E Land & Leasing and Kevco, Inc. dated December 1,
1977.(1)
10.6 Amendment No. 1 to Lease, by and between K & E Land & Leasing and
Kevco, Inc. dated March , 1982.(1)
10.7 Amendment No. 2 to Lease, by and between K & E Land & Leasing and
Kevco, Inc. dated May 30, 1983.(1)
10.8 Amendment No. 3 to Lease, by and between K & E Land & Leasing and
Kevco, Inc. dated February 1, 1993.(1)
10.9 Lease dated April 1, 1980 between City of Newton, Kansas and K & E Land
& Leasing.(1)
10.10 Sublease and Lease Guarantee Agreement dated April 1, 1980 between K &
E Land & Leasing and Kevco, Inc.(1)
10.11 Amendment No. 1 to Sublease and Lease Guaranty Agreement by and between
K & E Land & Leasing and Kevco, Inc. dated May 30, 1983.(1)
10.12 Lease Agreement dated October 12, 1987 between 1741 Conant Partnership
& Kevco Inc.(1)
10.13 Equipment Lease Agreement dated January 1, 1991 between K & E Land &
Leasing and Kevco, Inc.(1)
10.14 Amendment No. 1 to Equipment Lease Agreement between K & E Land &
Leasing and Kevco, Inc. dated February 12, 1993.(1)
10.15 Amendment No. 2 to Equipment Lease Agreement between K & E Land &
Leasing and Kevco, Inc. dated October 26, 1993.(1)
10.16 Amendment No. 3 to Equipment Lease Agreement between K & E Land &
Leasing and Kevco, Inc. dated May 23, 1994.(1)
10.17 Deferred Compensation Agreement between Kevco, Inc. and Clyde A. Reed,
Jr. dated May 24, 1977.(1)*
10.18 Amendment No. 1 to Deferred Compensation Agreement dated May ,
1980.(1)*
10.19 Amendment No. 2 to Deferred Compensation Agreement dated March 10,
1992.(1)*
10.20 Amended and Restated Health and Accident Plan of Kevco, Inc.(1)*
10.21 Investment and Tax Advice Plan of Kevco, Inc.(1)*
10.22 Credit Agreement among Kevco, Inc., certain Lenders and NationsBank of
Texas, N.A., as Administrative Lender dated June 30, 1995.(1)
10.23 First Amendment to Credit Agreement, dated as of September 1, 1995,
among Kevco, Inc., the banks listed on the signature pages thereof, and
NationsBank of Texas, N.A.(1)
10.24 Second Amendment to Credit Agreement, dated as of November 29, 1995,
among Kevco, Inc., the banks listed on the signature pages thereof, and
NationsBank of Texas, N.A.(1)
</TABLE>
<PAGE> 12
<TABLE>
<S> <C>
10.25 Revolving Credit Note of Kevco, Inc. to NationsBank of Texas, N.A.
dated September 1, 1995 in the amount of $14,285,714.28.(1)
10.26 Term Loan Note of Kevco, Inc. to NationsBank of Texas, N.A. dated
September 1, 1995 in the amount of $10,714,285.72.(1)
10.27 Revolving Credit Note of Kevco, Inc. to The Sumitomo Bank, Ltd. dated
February 2, 1996 in the amount of $5,714,285.72.(1)
10.28 Term Loan Note of Kevco, Inc. to The Sumitomo Bank, Ltd. dated February
2, 1996 in the amount of $4,285,714.28.(1)
10.29 PaineWebber Standardized 401(k) Profit-Sharing Adoption Agreement (No.
005) (To be used with Basic Plan Document No. 03 only) for Kevco, Inc.
dated May 24, 1996 and PaineWebber Defined Contribution Plan.(1)
10.30 Promissory Note of Gerald E. Kimmel to Kevco, Inc. dated October 26,
1993 in the amount of $5,000,000.(1)
10.31 Amendment No. 4 to Lease dated December 1, 1977 by and between K&E Land
& Leasing and Kevco, Inc. dated October 26, 1993.(1)
10.32 Assignment and Acceptance dated February 2, 1996 between The Daiwa
Bank, Limited and The Sumitomo Bank, Ltd., Chicago Branch.(1)
10.33 Form of Tax Indemnification and Distribution Agreement.(1)
10.34 Form of Promissory Note made by Kevco Texas, Inc. in the amount of
$3,733,000 (the Prior S Corporation Earnings Note).(1)
10.35 Form of Promissory Note made by Kevco Texas, Inc. (the Future S
Corporation Earnings Note).(1)
10.36 Form of Assignment of $5,000,000 Note made by Kevco, Inc. (n/k/a Kevco
Delaware, Inc.).(1)
10.37 Form of Adoption Agreement by Kevco, Inc. and Kevco Texas, Inc. (re:
1995 Stock Option Plan and 1996 Stock Option Plan).(1)
10.38 Amendment No. 1 dated September 21, 1988, to Lease Agreement by 1741
Conant Partnership as lessor and Kevco, Inc. (n/k/a Kevco Delaware,
Inc.).(1)
10.39 Letter Agreement dated June 22, 1982, between Kevco, Inc. (n/k/a Kevco
Delaware, Inc.) and K&E Land & Leasing. (re: lease rentals).(1)
10.40 Letter Agreement dated October 1, 1996 by Kevco, Inc., K&E Land &
Leasing, and 1741 Conant Partnership (re: lease rental).(1)
10.41 Form of Parent Pledge Agreement.(1)
10.42 Consent and Waiver, dated as of October 21, 1996, by and among
NationsBank of Texas, N.A., The Sumitomo Bank, Ltd. and Kevco Texas,
Inc.(1)
</TABLE>
<PAGE> 13
<TABLE>
<S> <C>
10.43 Amended and Restated Credit Agreement, dated as of February 27, 1997,
by and among Kevco Delaware, Inc., certain lenders and NationsBank of
Texas, N.A.(4)
10.44 Amendment No. 1 to Amended and Restated 1995 Stock Option Plan of
Kevco, Inc. (10)
10.45 Senior Commitment Letter dated October 27, 1997 from NationsBank of
Texas, N.A. and NationsBanc Montgomery Securities, Inc.(6)
10.46 First Amendment to Amended and Restated Credit Agreement dated as of
November 25, 1997 between Kevco Delaware, Inc., certain lenders and
NationsBank of Texas, N.A.(7)
10.47 Second Amended and Restated Credit Agreement dated December 1, 1997
between Kevco, Inc., certain lenders and NationsBank of Texas,
N.A.(7)(8)
10.48 Revolving Credit Note dated December 1, 1997 between Kevco, Inc. and
NationsBank of Texas, N.A. in the original principal amount of
$11,666,666.66.(7)
10.49 Revolving Credit Note dated December 1, 1997 between Kevco, Inc. and
National City Bank of Kentucky in the original principal amount of
$8,166,666.67.(7)
10.50 Revolving Credit Note dated December 1, 1997 between Kevco, Inc. and
Guaranty Federal Bank, F.S.B. in the original principal amount of
$7,000,000.00.(7)
10.51 Revolving Credit Note dated December 1, 1997 between Kevco, Inc. and
The Sumitomo Bank, Limited in the original principal amount of
$8,166,666.67.(7)
10.52 Facility A Term Loan Note dated December 1, 1997 between Kevco, Inc.
and NationsBank of Texas, N.A. in the original principal amount of
$13,333,333.34.(7)
10.53 Facility A Term Loan Note dated December 1, 1997 between Kevco, Inc.
and National City Bank Kentucky in the original principal amount of
$9,333,333.33.(7)
10.54 Facility A Term Loan Note dated December 1, 1997 between Kevco, Inc.
and Guaranty Federal Bank, F.S.B. in the original principal amount of
$8,000,000.00.(7)
10.55 Facility A Term Loan Note dated December 1, 1997 between Kevco, Inc.
and The Sumitomo Bank, Limited in the original principal amount of
$9,333,333.33.(7)
10.56 Facility B Term Loan Note dated December 1, 1997 between Kevco, Inc.
and NationsBank of Texas, N.A. in the original principal amount of
$50,000,000.00.(7)
10.57 Security Agreement dated December 1, 1997 between Kevco, Inc. and
NationsBank of Texas, N.A. as Administrative Agent.(7)
10.58 Registration Rights Agreement dated December 1, 1997 by and among
Kevco, Inc., as Issuer, the Subsidiaries of Kevco, Inc. identified
therein as Subsidiary Guarantors and Donaldson, Lufkin & Jenrette
Securities Corporation and NationsBanc Montgomery Securities, Inc., as
Initial Purchasers.(9)
</TABLE>
<PAGE> 14
<TABLE>
<S> <C>
10.59 Indenture dated December 1, 1997 among Kevco, Inc., SCC Acquisition
Corp., Kevco Delaware, Inc., Sunbelt Wood Components, Inc.,
Consolidated Forest Products, Inc., Bowen Supply, Inc. and Encore
Industries, Inc., as Subsidiary Guarantors and United States Trust
Company of New York, as Trustee.(9)
10.60 Supplemental Indenture between Shelter Components Corporation, a
Subsidiary of Kevco, Inc., and United States Trust Company of New York,
as Trustee.(9)
10.61 Supplemental Indenture dated as of December 1, 1997 between Shelter
Distribution, L.P., a Subsidiary of Kevco, Inc., and United States
Trust Company of New York, as Trustee.(9)
10.62 Supplemental Indenture dated as of December 1, 1997 between DCM, Inc.,
a Subsidiary of Kevco, Inc., and United States Trust Company of New
York, as Trustee.(9)
10.63 Supplemental Indenture dated as of December 1, 1997 between Duo-Form of
Michigan, Inc., a Subsidiary of Kevco, Inc., and United States Trust
Company of New York, as Trustee.(9)
10.64 Supplemental Indenture dated as of December 1, 1997 between Design
Components, Inc., a Subsidiary of Kevco, Inc., and United States Trust
Company of New York, as Trustee.(9)
10.65 Supplemental Indenture dated as of December 1, 1997 between Shelter
Components of Indiana, Inc., a Subsidiary of Kevco, Inc., and United
States Trust Company of New York, as Trustee.(9)
10.66 Supplemental Indenture dated as of December 1, 1997 between BPR
Holdings, Inc., a Subsidiary of Kevco, Inc., and United States Trust
Company of New York, as Trustee.(9)
10.67 First Amendment to Credit Agreement dated February 12, 1998 between
Kevco, Inc., certain lenders and NationsBank of Texas, N.A.(10)
10.68 Registered Global Note dated March 5, 1998 among Kevco, Inc., Kevco
Delaware, Inc., Sunbelt Wood Components, Inc., Bowen Supply, Inc.,
Encore Industries, Inc., Shelter Components Corporation, BPR Holdings,
Inc., Shelter Components of Indiana, Inc., Design Components, Inc.,
Duo-Form of Michigan, Inc., DCM, Inc. and Shelter Distribution, L.P.,
as Subsidiary Guarantors and United States Trust Company of New York,
as Trustee.(12)
10.69 Second Amendment to Credit Agreement, dated as of October 27, 1998 (but
effective as of September 30, 1998), entered into and among Kevco,
Inc., a Texas corporation, the banks listed on the signature pages
(collectively, the "Lenders"), and NationsBank, N.A. (successor by
merger to NationsBank of Texas, N.A.), as the Administrative Agent.(13)
10.70 Waiver entered into as of the 30th day of December 1998, by and among
the banks listed on the signature pages (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 to the extent and in the manner provided for in the Credit
Agreement.(13)
10.71 Second Waiver entered into as of the 15th day of February, 1999, by and
among the banks listed on the signature pages (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 to the extent and in the manner provided for in
the Credit Agreement.(13)
</TABLE>
<PAGE> 15
<TABLE>
<S> <C>
10.72 Third Amendment and Waiver entered into as of the 25th day of February,
1999, by and among the banks listed on the signature pages (the
"Lenders"), Kevco, Inc., a Texas corporation, and NationsBank, N.A.
(successor by merger to NationsBank of Texas, N.A.), as Administrative
Agent for the Lenders to the extent and in the manner provided for in
the Credit Agreement.(13)
10.73 Letter agreement waiver extension, dated March 22, 1999, between Kevco,
Inc., NationsBank, N.A., as Administrative Agent and Lender, and the
other parties thereto.(13)
10.74 Fourth Amendment and Waiver entered into as of the 6th day of April,
1999, by and among the banks listed on the signature pages (the
"Lenders"), Kevco, Inc., a Texas corporation, and NationsBank, N.A., as
Administrative Agent for the Lenders.(14)
21.1 Subsidiaries.(13)
23.1 Consent of PricewaterhouseCoopers LLP.(13)
24.1 Power of Attorney.(13)
27.1 Financial Data Schedule.(13)
</TABLE>
- ------
(1) Previously filed as an exhibit to the Company's Registration Statement
on Form S-1 (No. 333-11173) and incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated February 27, 1997, and incorporated herein by reference.
(3) Previously filed as an exhibit to the Company's registration statement
on Form S-8 (No. 333-19959), and incorporated herein by reference.
(4) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q, for the quarter ended March 31, 1997 and incorporated herein
by reference.
(5) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q, for the quarter ended June 30, 1997 and incorporated herein
by reference.
(6) Previously filed as an exhibit to the Company's Tender Offer Statement
on Schedule 14D-1, filed October 28, 1997, and incorporated herein by
reference.
(7) Previously filed as an exhibit to the Company's Tender Offer Statement
on Schedule 14D-1/A, filed December 12, 1997, and incorporated herein
by reference.
(8) Schedules and similar attachments to this exhibit have not been
previously filed herewith, but the nature of their contents is
described in the body of this exhibit. The Company agrees to furnish a
copy of any such omitted schedules and attachments to the Securities
and Exchange Commission upon request.
(9) Previously filed as an exhibit to the Company's registration statement
on Form S-4 (No. 333-43691), and incorporated herein by reference.
(10) Previously filed as an exhibit to the Company's Annual Report on Form
10-K, for the year ended December 31, 1998 and incorporated herein by
reference.
(11) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated December 23, 1998, and incorporated herein by reference.
(12) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q, for the quarter ended March 31, 1998, and incorporated
herein by reference.
(13) Previously filed herewith.
(14) Filed herewith.
* Management contract or compensatory plan or arrangement.
<PAGE> 16
S I G N A T U R E S
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
KEVCO, INC.
Date: April 28, 1999 By: /s/ Jerry E. Kimmel*
-----------------------------------
Jerry E. Kimmel,
Chairman, President and
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON APRIL 28, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
/s/ Jerry E. Kimmel* Chairman of the Board, Chief Executive Offer,
- -------------------------------------- President and Director (Principal Executive
JERRY E. KIMMEL Officer)
/s/ Ellis L. McKinley, Jr.* Vice President, Chief Financial Officer,
- -------------------------------------- Treasurer and Director (Principal Financial
ELLIS L. MCKINLEY, JR. Officer and Principal Accounting Officer)
/s/ Gregory G. Kimmel* Senior Vice President, Corporate Development
- -------------------------------------- and Director
GREGORY G. KIMMEL
/s/ Richard S. Tucker* Secretary and Director
- --------------------------------------
RICHARD S. TUCKER
/s/ Richard Nevins* Director
- --------------------------------------
RICHARD NEVINS
*By: /s/ Jerry E. Kimmel,
- --------------------------------------
JERRY E. KIMMEL
</TABLE>
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2.1 Merger Agreement, dated June 6, 1995 by and among Kevco, Inc. and
Service Supply Systems, Inc., joined by a wholly-owned subsidiary of
Kevco, Inc.(1)
2.2 Form of Plan and Agreement of Merger between Kevco Texas, Inc. and
Kevco Delaware, Inc.(1)
2.3 Form of Bill of Sale and General Assignment from Kevco Delaware, Inc.,
as Assignor, to Sunbelt Wood Components, Inc., as Assignee.(1)
2.4 Form of Assumption Agreement between Kevco Delaware, Inc. and Sunbelt
Wood Components, Inc.(1)
2.5 Asset Purchase Agreement by and among Consolidated Forest Products,
Inc., Consolidated Forest Products, L.L.C. and the members of
Consolidated Forest Products, L.L.C.(2)
2.6 Stock Purchase Agreement by and among Kevco Delaware, Inc. and the
shareholders of Bowen Supply, Inc.(2)
2.7 Agreement and Plan of Merger, dated as of October 21, 1997, between
Kevco, Inc., SCC Acquisition Corp. and Shelter Components
Corporation.(6)
2.8 Stock Purchase Agreement dated as of December 23, 1998 between Wingate
Partners II, L.P. and the Company.(11)(8)
2.9 Stock Purchase Agreement dated as of December 23, 1998 among Wingate
Partners II, L.P., Jerry E. Kimmel, and the Company.(11)(8)
2.10 Letter, dated February 15, 1999, to Kevco, Inc. from Wingate Partners
II, L.P.(13)
2.11 Letter, dated February 15, 1999, to Jerry E. Kimmel from Wingate
Partners II, L.P.(13)
3.1 Articles of Incorporation of Kevco, Inc., as amended.(1)
3.2 Bylaws of Kevco, Inc.(1)
4.1 Form of certificate evidencing ownership of the Common Stock of Kevco,
Inc.(1)
10.1 Amendment No. 2 to 1995 Stock Option Plan (Amended and Restated 1995
Stock Option Plan of Kevco, Inc.) and Supplementary Letter.(1)*
10.2 1996 Stock Option Plan of Kevco, Inc., as amended, and Supplementary
Letter.(1)*
10.3 Form of Amended and Restated Employment Agreement between Gerald E.
Kimmel and Kevco, Inc., joined therein by Kevco Delaware, Inc. and
Sunbelt Wood Components, Inc.(1)*
10.4 Employment Agreement between C. Lee Denham and Kevco, Inc. dated June
30, 1995.(1)*
</TABLE>
<PAGE> 18
<TABLE>
<S> <C>
10.5 Lease between K & E Land & Leasing and Kevco, Inc. dated December 1,
1977.(1)
10.6 Amendment No. 1 to Lease, by and between K & E Land & Leasing and
Kevco, Inc. dated March , 1982.(1)
10.7 Amendment No. 2 to Lease, by and between K & E Land & Leasing and
Kevco, Inc. dated May 30, 1983.(1)
10.8 Amendment No. 3 to Lease, by and between K & E Land & Leasing and
Kevco, Inc. dated February 1, 1993.(1)
10.9 Lease dated April 1, 1980 between City of Newton, Kansas and K & E Land
& Leasing.(1)
10.10 Sublease and Lease Guarantee Agreement dated April 1, 1980 between K &
E Land & Leasing and Kevco, Inc.(1)
10.11 Amendment No. 1 to Sublease and Lease Guaranty Agreement by and between
K & E Land & Leasing and Kevco, Inc. dated May 30, 1983.(1)
10.12 Lease Agreement dated October 12, 1987 between 1741 Conant Partnership
& Kevco Inc.(1)
10.13 Equipment Lease Agreement dated January 1, 1991 between K & E Land &
Leasing and Kevco, Inc.(1)
10.14 Amendment No. 1 to Equipment Lease Agreement between K & E Land &
Leasing and Kevco, Inc. dated February 12, 1993.(1)
10.15 Amendment No. 2 to Equipment Lease Agreement between K & E Land &
Leasing and Kevco, Inc. dated October 26, 1993.(1)
10.16 Amendment No. 3 to Equipment Lease Agreement between K & E Land &
Leasing and Kevco, Inc. dated May 23, 1994.(1)
10.17 Deferred Compensation Agreement between Kevco, Inc. and Clyde A. Reed,
Jr. dated May 24, 1977.(1)*
10.18 Amendment No. 1 to Deferred Compensation Agreement dated May ,
1980.(1)*
10.19 Amendment No. 2 to Deferred Compensation Agreement dated March 10,
1992.(1)*
10.20 Amended and Restated Health and Accident Plan of Kevco, Inc.(1)*
10.21 Investment and Tax Advice Plan of Kevco, Inc.(1)*
10.22 Credit Agreement among Kevco, Inc., certain Lenders and NationsBank of
Texas, N.A., as Administrative Lender dated June 30, 1995.(1)
10.23 First Amendment to Credit Agreement, dated as of September 1, 1995,
among Kevco, Inc., the banks listed on the signature pages thereof, and
NationsBank of Texas, N.A.(1)
10.24 Second Amendment to Credit Agreement, dated as of November 29, 1995,
among Kevco, Inc., the banks listed on the signature pages thereof, and
NationsBank of Texas, N.A.(1)
</TABLE>
<PAGE> 19
<TABLE>
<S> <C>
10.25 Revolving Credit Note of Kevco, Inc. to NationsBank of Texas, N.A.
dated September 1, 1995 in the amount of $14,285,714.28.(1)
10.26 Term Loan Note of Kevco, Inc. to NationsBank of Texas, N.A. dated
September 1, 1995 in the amount of $10,714,285.72.(1)
10.27 Revolving Credit Note of Kevco, Inc. to The Sumitomo Bank, Ltd. dated
February 2, 1996 in the amount of $5,714,285.72.(1)
10.28 Term Loan Note of Kevco, Inc. to The Sumitomo Bank, Ltd. dated February
2, 1996 in the amount of $4,285,714.28.(1)
10.29 PaineWebber Standardized 401(k) Profit-Sharing Adoption Agreement (No.
005) (To be used with Basic Plan Document No. 03 only) for Kevco, Inc.
dated May 24, 1996 and PaineWebber Defined Contribution Plan.(1)
10.30 Promissory Note of Gerald E. Kimmel to Kevco, Inc. dated October 26,
1993 in the amount of $5,000,000.(1)
10.31 Amendment No. 4 to Lease dated December 1, 1977 by and between K&E Land
& Leasing and Kevco, Inc. dated October 26, 1993.(1)
10.32 Assignment and Acceptance dated February 2, 1996 between The Daiwa
Bank, Limited and The Sumitomo Bank, Ltd., Chicago Branch.(1)
10.33 Form of Tax Indemnification and Distribution Agreement.(1)
10.34 Form of Promissory Note made by Kevco Texas, Inc. in the amount of
$3,733,000 (the Prior S Corporation Earnings Note).(1)
10.35 Form of Promissory Note made by Kevco Texas, Inc. (the Future S
Corporation Earnings Note).(1)
10.36 Form of Assignment of $5,000,000 Note made by Kevco, Inc. (n/k/a Kevco
Delaware, Inc.).(1)
10.37 Form of Adoption Agreement by Kevco, Inc. and Kevco Texas, Inc. (re:
1995 Stock Option Plan and 1996 Stock Option Plan).(1)
10.38 Amendment No. 1 dated September 21, 1988, to Lease Agreement by 1741
Conant Partnership as lessor and Kevco, Inc. (n/k/a Kevco Delaware,
Inc.).(1)
10.39 Letter Agreement dated June 22, 1982, between Kevco, Inc. (n/k/a Kevco
Delaware, Inc.) and K&E Land & Leasing. (re: lease rentals).(1)
10.40 Letter Agreement dated October 1, 1996 by Kevco, Inc., K&E Land &
Leasing, and 1741 Conant Partnership (re: lease rental).(1)
10.41 Form of Parent Pledge Agreement.(1)
10.42 Consent and Waiver, dated as of October 21, 1996, by and among
NationsBank of Texas, N.A., The Sumitomo Bank, Ltd. and Kevco Texas,
Inc.(1)
</TABLE>
<PAGE> 20
<TABLE>
<S> <C>
10.43 Amended and Restated Credit Agreement, dated as of February 27, 1997,
by and among Kevco Delaware, Inc., certain lenders and NationsBank of
Texas, N.A.(4)
10.44 Amendment No. 1 to Amended and Restated 1995 Stock Option Plan of
Kevco, Inc. (10)
10.45 Senior Commitment Letter dated October 27, 1997 from NationsBank of
Texas, N.A. and NationsBanc Montgomery Securities, Inc.(6)
10.46 First Amendment to Amended and Restated Credit Agreement dated as of
November 25, 1997 between Kevco Delaware, Inc., certain lenders and
NationsBank of Texas, N.A.(7)
10.47 Second Amended and Restated Credit Agreement dated December 1, 1997
between Kevco, Inc., certain lenders and NationsBank of Texas,
N.A.(7)(8)
10.48 Revolving Credit Note dated December 1, 1997 between Kevco, Inc. and
NationsBank of Texas, N.A. in the original principal amount of
$11,666,666.66.(7)
10.49 Revolving Credit Note dated December 1, 1997 between Kevco, Inc. and
National City Bank of Kentucky in the original principal amount of
$8,166,666.67.(7)
10.50 Revolving Credit Note dated December 1, 1997 between Kevco, Inc. and
Guaranty Federal Bank, F.S.B. in the original principal amount of
$7,000,000.00.(7)
10.51 Revolving Credit Note dated December 1, 1997 between Kevco, Inc. and
The Sumitomo Bank, Limited in the original principal amount of
$8,166,666.67.(7)
10.52 Facility A Term Loan Note dated December 1, 1997 between Kevco, Inc.
and NationsBank of Texas, N.A. in the original principal amount of
$13,333,333.34.(7)
10.53 Facility A Term Loan Note dated December 1, 1997 between Kevco, Inc.
and National City Bank Kentucky in the original principal amount of
$9,333,333.33.(7)
10.54 Facility A Term Loan Note dated December 1, 1997 between Kevco, Inc.
and Guaranty Federal Bank, F.S.B. in the original principal amount of
$8,000,000.00.(7)
10.55 Facility A Term Loan Note dated December 1, 1997 between Kevco, Inc.
and The Sumitomo Bank, Limited in the original principal amount of
$9,333,333.33.(7)
10.56 Facility B Term Loan Note dated December 1, 1997 between Kevco, Inc.
and NationsBank of Texas, N.A. in the original principal amount of
$50,000,000.00.(7)
10.57 Security Agreement dated December 1, 1997 between Kevco, Inc. and
NationsBank of Texas, N.A. as Administrative Agent.(7)
10.58 Registration Rights Agreement dated December 1, 1997 by and among
Kevco, Inc., as Issuer, the Subsidiaries of Kevco, Inc. identified
therein as Subsidiary Guarantors and Donaldson, Lufkin & Jenrette
Securities Corporation and NationsBanc Montgomery Securities, Inc., as
Initial Purchasers.(9)
</TABLE>
<PAGE> 21
<TABLE>
<S> <C>
10.59 Indenture dated December 1, 1997 among Kevco, Inc., SCC Acquisition
Corp., Kevco Delaware, Inc., Sunbelt Wood Components, Inc.,
Consolidated Forest Products, Inc., Bowen Supply, Inc. and Encore
Industries, Inc., as Subsidiary Guarantors and United States Trust
Company of New York, as Trustee.(9)
10.60 Supplemental Indenture between Shelter Components Corporation, a
Subsidiary of Kevco, Inc., and United States Trust Company of New York,
as Trustee.(9)
10.61 Supplemental Indenture dated as of December 1, 1997 between Shelter
Distribution, L.P., a Subsidiary of Kevco, Inc., and United States
Trust Company of New York, as Trustee.(9)
10.62 Supplemental Indenture dated as of December 1, 1997 between DCM, Inc.,
a Subsidiary of Kevco, Inc., and United States Trust Company of New
York, as Trustee.(9)
10.63 Supplemental Indenture dated as of December 1, 1997 between Duo-Form of
Michigan, Inc., a Subsidiary of Kevco, Inc., and United States Trust
Company of New York, as Trustee.(9)
10.64 Supplemental Indenture dated as of December 1, 1997 between Design
Components, Inc., a Subsidiary of Kevco, Inc., and United States Trust
Company of New York, as Trustee.(9)
10.65 Supplemental Indenture dated as of December 1, 1997 between Shelter
Components of Indiana, Inc., a Subsidiary of Kevco, Inc., and United
States Trust Company of New York, as Trustee.(9)
10.66 Supplemental Indenture dated as of December 1, 1997 between BPR
Holdings, Inc., a Subsidiary of Kevco, Inc., and United States Trust
Company of New York, as Trustee.(9)
10.67 First Amendment to Credit Agreement dated February 12, 1998 between
Kevco, Inc., certain lenders and NationsBank of Texas, N.A.(10)
10.68 Registered Global Note dated March 5, 1998 among Kevco, Inc., Kevco
Delaware, Inc., Sunbelt Wood Components, Inc., Bowen Supply, Inc.,
Encore Industries, Inc., Shelter Components Corporation, BPR Holdings,
Inc., Shelter Components of Indiana, Inc., Design Components, Inc.,
Duo-Form of Michigan, Inc., DCM, Inc. and Shelter Distribution, L.P.,
as Subsidiary Guarantors and United States Trust Company of New York,
as Trustee.(12)
10.69 Second Amendment to Credit Agreement, dated as of October 27, 1998 (but
effective as of September 30, 1998), entered into and among Kevco,
Inc., a Texas corporation, the banks listed on the signature pages
(collectively, the "Lenders"), and NationsBank, N.A. (successor by
merger to NationsBank of Texas, N.A.), as the Administrative Agent.(13)
10.70 Waiver entered into as of the 30th day of December 1998, by and among
the banks listed on the signature pages (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 to the extent and in the manner provided for in the Credit
Agreement.(13)
10.71 Second Waiver entered into as of the 15th day of February, 1999, by and
among the banks listed on the signature pages (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 to the extent and in the manner provided for in
the Credit Agreement.(13)
</TABLE>
<PAGE> 22
<TABLE>
<S> <C>
10.72 Third Amendment and Waiver entered into as of the 25th day of February,
1999, by and among the banks listed on the signature pages (the
"Lenders"), Kevco, Inc., a Texas corporation, and NationsBank, N.A.
(successor by merger to NationsBank of Texas, N.A.), as Administrative
Agent for the Lenders to the extent and in the manner provided for in
the Credit Agreement.(13)
10.73 Letter agreement waiver extension, dated March 22, 1999, between Kevco,
Inc., NationsBank, N.A., as Administrative Agent and Lender, and the
other parties thereto.(13)
10.74 Fourth Amendment and Waiver entered into as of the 6th day of April,
1999, by and among the banks listed on the signature pages (the
"Lenders"), Kevco, Inc., a Texas corporation, and NationsBank, N.A., as
Administrative Agent for the Lenders.(14)
21.1 Subsidiaries.(13)
23.1 Consent of PricewaterhouseCoopers LLP.(13)
24.1 Power of Attorney.(13)
27.1 Financial Data Schedule.(13)
</TABLE>
- ------
(1) Previously filed as an exhibit to the Company's Registration Statement
on Form S-1 (No. 333-11173) and incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated February 27, 1997, and incorporated herein by reference.
(3) Previously filed as an exhibit to the Company's registration statement
on Form S-8 (No. 333-19959), and incorporated herein by reference.
(4) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q, for the quarter ended March 31, 1997 and incorporated herein
by reference.
(5) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q, for the quarter ended June 30, 1997 and incorporated herein
by reference.
(6) Previously filed as an exhibit to the Company's Tender Offer Statement
on Schedule 14D-1, filed October 28, 1997, and incorporated herein by
reference.
(7) Previously filed as an exhibit to the Company's Tender Offer Statement
on Schedule 14D-1/A, filed December 12, 1997, and incorporated herein
by reference.
(8) Schedules and similar attachments to this exhibit have not been
previously filed herewith, but the nature of their contents is
described in the body of this exhibit. The Company agrees to furnish a
copy of any such omitted schedules and attachments to the Securities
and Exchange Commission upon request.
(9) Previously filed as an exhibit to the Company's registration statement
on Form S-4 (No. 333-43691), and incorporated herein by reference.
(10) Previously filed as an exhibit to the Company's Annual Report on Form
10-K, for the year ended December 31, 1998 and incorporated herein by
reference.
(11) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated December 23, 1998, and incorporated herein by reference.
(12) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q, for the quarter ended March 31, 1998, and incorporated
herein by reference.
(13) Previously filed herewith.
(14) Filed herewith.
* Management contract or compensatory plan or arrangement.
<PAGE> 1
EXHIBIT 10.74
FOURTH AMENDMENT AND WAIVER
THIS FOURTH AMENDMENT AND WAIVER (this "Amendment") is entered into as of
the 6th day of April, 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 through the date hereof and as further
amended, extended, renewed, or restated from time to
time, 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 Determining Lenders, 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 Determining Lenders, the Borrower and the
Administrative Agent entered into a Second Waiver,
dated February 15, 1999 (the "Second Waiver"),
extending the termination of the First Waiver from
February 15, 1999, to February 25, 1999.
(d) Lenders, the Borrower and the Administrative Agent
entered into a Third Amendment and Waiver, dated
February 25, 1999 (the "Third Amendment and Waiver"),
extending the termination of the Second Waiver from
February 25, 1999, to March 31, 1999, which has
subsequently been extended to April 15, 1999.
(e) The waiver granted in the Third Amendment and
Waiver will expire on April 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
<PAGE> 2
Existing Events of Default, including but not limited
to, refusing to make any additional Advances under the
Credit Agreement.
(f) The Borrower has requested a waiver with respect
to the Existing Events of Default and Defaults arising
under Sections 6.2 and 6.3 of the Credit Agreement
because of the Borrower's failure within the 90-day
period set forth to deliver the information required
with respect to its 1998 fiscal year (the "Additional
Defaults"), 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 Third Amendment and
Waiver.
(g) As an accommodation to the Borrower in order to
permit the Borrower to obtain additional Advances
under the Credit Agreement, the Lenders, conditioned
upon the Borrower's compliance with the terms and
conditions set forth herein, hereby agree to such
waiver with respect to the Existing Events of Default
as provided herein.
(h) Additionally, the Borrower, Administrative Agent,
and the Lenders desire to amend the Credit Agreement
to provide for, among other things, (i) an extension
of the Liquidity Commitment Maturity Date, and (ii)
changes to certain other provisions contained in 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 parties
hereto covenant and agree as follows:
1. WAIVER. Subject to the satisfaction of the conditions of
effectiveness set forth in Section 9 of this Amendment and the other
conditions contained herein, the Lenders hereby waive the Existing Events
of Default and the Additional Defaults.
2. NO WAIVER. The waiver provided in Section 1 of this Amendment
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.
3. AMENDMENTS TO THE CREDIT AGREEMENT. The Credit Agreement is
hereby amended as follows:
(a) Section 1.1 is amended by amending and restating
the following terms:
2
<PAGE> 3
"Interest Coverage Ratio" means, for any period, the
ratio of EBITDA to interest expense (including interest
expense pursuant to Capitalized Lease Obligations, but
excluding non-cash amortization of Subordinated Debt and
other non-cash loan costs) of the Borrower and its
Subsidiaries for such period.
"Liquidity Commitment Maturity Date" means June 30,
1999, or the earlier date of termination in whole of the
Liquidity Commitment pursuant to the Loan Documents.
"Facility A Term Loan Maturity Date" means June 30,
2000, or the earlier date of acceleration of the Facility A
Term Loan Advances pursuant to Section 8.2 hereof.
"Facility B Term Loan Maturity Date" means June 30,
2000, or the earlier date of acceleration of the Facility B
Term Loan Advances pursuant to Section 8.2 hereof.
"Revolving Commitment Maturity Date" means June 30,
2000, or the earlier date of termination in whole of the
Revolving Credit Commitment pursuant to Section 2.6 or 8.2
hereof.
(b) Section 2.5(c) is entirely amended, as
follows:
(c) Prepayments from Sales of Assets. Concurrently
with the receipt of Net Cash Proceeds from the sale or
disposition by the Borrower or any of its Subsidiaries of
any assets (including the Capital Stock of any Subsidiary)
sold or disposed of (other than (i) the sale of inventory
and other assets sold in the ordinary course of business,
(ii) the sale or other disposition of worn out or obsolete
assets, and (iii) the sale or other disposition of Cash
Equivalents in the ordinary course of business) during any
fiscal year in which the aggregate Net Cash Proceeds
previously received from such asset sales during such
fiscal year exceeds $500,000, the Borrower shall prepay
Advances in a principal amount equal to 100% of the amount
by which aggregate Net Cash Proceeds received from such
asset sales during such fiscal year exceeds $500,000. Any
such prepayments shall (i) include accrued interest to the
date of such prepayment on the principal amount prepaid,
(ii) be applied to repay outstanding Liquidity Advances and
to permanently reduce the Liquidity Commitment by the
amount of such prepayment, and if there are no Liquidity
Advances outstanding, such prepayment shall be applied to
the unpaid principal amount of the Facility A Term Loan
Advances and the Facility B Term Loan Advances, in inverse
order of maturity, pro rata based upon the respective
principal amounts of the Facility A Term Loan Advances and
Facility B Term Loan Advances outstanding at the time of
such prepayment (provided, however, if at any time that
there are no Liquidity Advances, Facility A Term Loan
Advances or Facility B Term Loan Advances outstanding, any
such prepayment shall be applied to repay outstanding
Revolving Credit Advances and to permanently reduce the
Revolving Credit
3
<PAGE> 4
Commitment by the amount of such prepayment), and (iii) not
be subject to the notice and minimum payment provisions of
this Section 2.5.
(c) Section 2.5(d) is entirely amended, as
follows:
(d) Prepayments from Excess Cash Flow. On March 31,
2000, the Borrower shall prepay Liquidity Advances,
Facility A Term Loan Advances, or Facility B Term Loan
Advances, as applicable, in an aggregate principal amount
equal to 75% of Excess Cash Flow, if any, for the fiscal
year ending immediately preceding such date. Any such
prepayment shall (i) include accrued interest to the date
of such prepayment on the principal amount prepaid, (ii) be
applied to repay outstanding Liquidity Advances and to
permanently reduce the Liquidity Commitment by the amount
of such prepayment, and if there are no Liquidity Advances
outstanding, such prepayment shall be applied to the unpaid
principal amount of the Facility A Term Loan Advances and
the Facility B Term Loan Advances, in inverse order of
maturity, pro rata based upon the respective principal
amounts of the Facility A Term Loan Advances and Facility B
Term Loan Advances outstanding at the time of such
prepayment, and (iii) not be subject to the notice and
minimum payment provisions of this Section 2.5.
(d) Section 2.5(e) is entirely amended, as
follows:
(e) Prepayment from Sales Of Capital Stock.
Concurrently with the receipt of Net Cash Proceeds from the
sale or disposition by the Borrower to any Person (other
than (i) to the Borrower or any of its Subsidiaries and
(ii) sales of Capital Stock the Net Proceeds of which are
concurrently applied to complete an Acquisition permitted
pursuant to Section 7.6 hereof) of any Capital Stock of the
Borrower, the Borrower shall prepay Advances in an
aggregate principal amount equal to 50% of such Net Cash
Proceeds. Any such prepayments shall (i) include accrued
interest to the date of such prepayment on the principal
amount prepaid, (ii) be applied to repay outstanding
Liquidity Advances and to permanently reduce the Liquidity
Commitment by the amount of such prepayment, and if there
are no Liquidity Advances outstanding, such prepayment
shall be applied to the unpaid principal amount of the
Facility A Term Loan Advances and the Facility B Term Loan
Advances, in inverse order of maturity, pro rata based upon
the respective principal amounts of the Facility A Term
Loan Advances and Facility B Term Loan Advances outstanding
at the time of such prepayment (provided, however, if at
any time that there are no Liquidity Advances, Facility A
Term Loan Advances or Facility B Term Loan Advances
outstanding, any such prepayment shall be applied to repay
outstanding Revolving Credit Advances and to permanently
reduce the Revolving Credit Commitment by the amount of
such prepayment), and (iii) not be subject to the notice
and minimum payment provisions of this Section 2.5.
(e) Section 2.5(f) is entirely amended, as
follows:
4
<PAGE> 5
(f) Prepayment from Issuance of Institutional Debt
and Subordinated Debt. Concurrently with the receipt of Net
Cash Proceeds from the issuance of Institutional Debt and
Subordinated Debt (excluding the Senior Subordinated Notes)
by the Borrower or any of its Subsidiaries to any Person, the
Borrower shall prepay Advances in an aggregate principal
amount equal to 100% of such Net Cash Proceeds. Any such
prepayments shall (i) include accrued interest to the date of
such prepayment on the principal amount prepaid, (ii) be
applied to repay outstanding Liquidity Advances and to
permanently reduce the Liquidity Commitment by the amount of
such prepayment, and if there are no Liquidity Advances
outstanding, such prepayment shall be applied to the unpaid
principal amount of the Facility A Term Loan Advances and the
Facility B Term Loan Advances, in inverse order of maturity,
pro rata based upon the respective principal amounts of the
Facility A Term Loan Advances and Facility B Term Loan
Advances outstanding at the time of such prepayment
(provided, however, if at any time that there are no
Liquidity Advances, Facility A Term Loan Advances or Facility
B Term Loan Advances outstanding, any such prepayment shall
be applied to repay outstanding Revolving Credit Advances and
to permanently reduce the Revolving Credit Commitment by the
amount of such prepayment), and (iii) not be subject to the
notice and minimum payment provisions of this Section 2.5.
(f) Section 2.8(b) is entirely amended, as
follows:
(b) Facility A Term Loan Advances. To the extent not
otherwise required to be paid earlier as provided herein,
the principal amount of the Facility A Term Loan Advances
shall be repaid on each Quarterly Date and on the Facility
A Term Loan Maturity Date in such amounts as set forth next
to each such date below:
<TABLE>
<CAPTION>
Amount of Reduction of Facility A
Quarterly Date Term Loan Advances as of each Date
-------------- ----------------------------------
<S> <C>
June 30, 1999 $ 1,250,000
September 30, 1999 $ 1,250,000
December 31, 1999 $ 1,250,000
March 31, 2000 $ 1,875,000
June 30, 2000 $ 33,125,000
or such other amount of Facility A
Term Loan Advances then outstanding
</TABLE>
(g) Section 2.8(c) is entirely amended, as
follows:
(c) Facility B Term Loan Advances. To the extent not
otherwise required to be paid earlier as provided herein,
the principal amount of the Facility B Term Loan
5
<PAGE> 6
Advances shall be repaid on each Quarterly Date and on the
Facility B Term Loan Maturity Date in such amounts as set
forth next to each such date below:
<TABLE>
<CAPTION>
Amount of Reduction of Facility B
Quarterly Date Term Loan Advances as of each Date
-------------- ----------------------------------
<S> <C>
June 30, 1999 $ 100,000
September 30, 1999 $ 100,000
December 31, 1999 $ 100,000
March 31, 2000 $ 100,000
June 30, 2000 $39,100,000
or such other amount of Facility B
Term Loan Advances then outstanding
</TABLE>
(h) Section 6.7 is entirely amended, as
follows:
Section 6.7 Monthly Financial Statements and
Information. Within 30 days after the end of each month,
(a) 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, and (b) a report comparing actual results of
operations for such month compared to budgeted performance;
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.
(i) Section 7.5 is entirely amended, as
follows:
Section 7.5 Sale of Assets. The Borrower shall not,
and shall not permit any of its Subsidiaries to, sell,
lease, abandon, transfer or otherwise dispose of assets in
an aggregate amount during any fiscal year in excess of
$500,000, except (i) sales of inventory and other assets
sold in the ordinary course of business, (ii) sales or
other dispositions of worn out or obsolete assets, (iii)
sales of Cash Equivalents in the ordinary course of
business, or (iv) asset sales, the Net Cash Proceeds of
which are applied in accordance with Section 2.5(c) hereof.
(j) Section 7.10 is entirely amended, as
follows:
6
<PAGE> 7
Section 7.10 Leverage Ratio. The Borrower shall not
permit the Leverage Ratio to be greater than (a) 9.00 to 1
for the fiscal quarter ending March 31, 1999, (b) 12.25 to
1 for the fiscal quarter ending June 30, 1999, (c) 13.25 to
1 for the fiscal quarter ending September 30, 1999, (d)
10.75 to 1 for the fiscal quarter ending December 31, 1999,
and (e) 9.50 to 1 at the end of any fiscal quarter ending
thereafter.
(k) Section 7.11 is deleted in its entirety,
and the following is inserted:
Section 7.11 INTENTIONALLY OMITTED.
(l) Section 7.12 is entirely amended, as
follows:
Section 7.12 Net Worth. The Borrower shall not permit
the Net Worth (without deduction from Net Worth of non-cash
loan amortization costs which have been accelerated to the
period ending on the applicable date of calculation by
reason of amendments to the definitions of Facility A Term
Loan Maturity Date, Facility B Term Loan Maturity Date, and
Revolving Commitment Maturity Date in the Fourth Amendment
and Waiver to the Credit Agreement dated as of April 6,
1999) at any time to be less than $35,000,000 at any time
during the period commencing on January 1, 1999 and
continuing through and including September 30, 1999, and
(c) $32,000,000 at all times thereafter.
(m) Section 7.15 is entirely amended, as
follows:
Section 7.15 Capital Expenditures. The Borrower shall
not permit the Capital Expenditures (exclusive of
Acquisitions) to be paid or incurred by it and its
Subsidiaries to exceed, for the period beginning on January
1, 1999 and ending on a date set forth below, the amount
set forth opposite such date:
<TABLE>
<CAPTION>
Amount
Period Ending In $ Thousands
------------- --------------
<S> <C>
March 31, 1999 1,500
June 30, 1999 4,525
September 30, 1999 5,525
December 31, 1999 6,500
March 31, 2000 8,000
June 30, 2000 9,500
</TABLE>
(n) New Sections 7.17 and 7.18 are added
immediately following Section 7.16, as follows:
7
<PAGE> 8
Section 7.17 EBITDA. The Borrower shall not permit
EBITDA for the period beginning on January 1, 1999 and
ending on a date set forth below to be less than the amount
set forth opposite such date:
<TABLE>
<CAPTION>
Amount
Period Ending In $ Thousands
------------- --------------
<S> <C>
March 31, 1999 3,000
June 30, 1999 8,000
September 30, 1999 13,000
December 31, 1999 18,000
March 31, 2000 23,000
June 30, 2000 28,000
</TABLE>
Section 7.18 Interest Coverage Ratio. The Borrower
shall not permit the Interest Coverage Ratio to be less
than 1.00 to 1 for any period of determination. For
purposes of this Section 7.18, the Interest Coverage Ratio
shall be measured quarterly (beginning with the fiscal
quarter beginning April 1, 1999) as of the last day of each
fiscal quarter of Borrower, and (a) beginning on June 30,
1999, and continuing through and including December 31,
1999, determined for the period beginning on April 1, 1999,
and ending on the last day of such fiscal quarter, and (b)
at all times after December 31, 1999, determined for the 12
month period ending on the last day of such fiscal quarter.
4. CERTAIN COVENANTS.
(a) The Borrower shall fully cooperate with all reasonable requests made
by the Administrative Agent or any Lender with respect to (i) the granting and
perfection of security interests in Collateral, including without limitation use
commercially reasonable efforts with respect to obtaining additional Landlord
Waivers required by Administrative Agent, and (ii) 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.
(b) anything in the Credit Agreement or any other Loan Document, the
Borrower may not request, and Administrative Agent and Lenders will not make,
LIBOR Advances, and each LIBOR Advance outstanding on the date hereof shall be
converted to a Base Rate Advance at the end of the current Interest Period for
such LIBOR Advance. To such extent, Sections 2.9, 2.11, 2.13, and other
provisions of the Loan Documents applicable to LIBOR Advances are hereby
deleted.
5. ACKNOWLEDGMENT OF THE BORROWER. The Borrower acknowledges and agrees that
the Lenders executing this Amendment 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 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 prejudice any rights
8
<PAGE> 9
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. SUBSIDIARIES ACKNOWLEDGMENT. By signing below, each of the Subsidiaries
which has executed a Subsidiary Guaranty (a) consents and agrees to this
Amendment's execution and delivery, (b) ratifies and confirms its obligations
under its Subsidiary Guaranty, (c) acknowledges and agrees that its obligations
under its Subsidiary Guaranty are not released, diminished, impaired, reduced,
or otherwise adversely affected by this Amendment, and (d) acknowledges and
agrees that it has no claims or offsets against, or defenses or counterclaims
to, its Subsidiary Guaranty.
7. 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 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 Amendment 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 Amendment
and were in any manner related to any of the Loan Documents.
9
<PAGE> 10
(c) The agreements of the Borrower and each Guarantor set forth in this
Section 7 shall survive termination of this Amendment and the other
Loan Documents.
8. REPRESENTATIONS AND WARRANTIES TRUE, NO EVENT OF DEFAULT. By its execution
and delivery hereof, the Borrower represents and warrants to the Lenders that,
as of the date hereof and after giving effect to the waiver set forth in Section
1 of this Amendment:
(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.
9. CONDITIONS OF EFFECTIVENESS. This Amendment shall not be effective until
all corporate actions of Borrower taken in connection herewith and the
transactions contemplated hereby shall be satisfactory in form and substance to
Administrative Agent and Lenders, and each of the following conditions precedent
shall have been satisfied:
(a) All reasonable out-of-pocket fees and expenses in connection with
the Loan Documents, including this Amendment, including legal and other
professional fees and expenses incurred on or prior to the date of this
Amendment by Administrative Agent or any Lender, including, without
limitation, the fees and expenses of Winstead Sechrest & Minick P.C.
and Arthur Andersen L.L.P., shall have been paid.
(b) Administrative Agent and each Lender shall have received each of the
following, in form and substance satisfactory to Administrative Agent,
Lenders and Administrative Agent's counsel:
(i) an opinion of PricewaterhouseCoopers, accountants for the
Borrower and its Subsidiaries, with respect to the fiscal year 1998
audited consolidated financial statements of the Borrower, which
shall not be limited as to the scope of the audit or qualified as to
the status of the Borrower and its Subsidiaries as a going concern;
(ii) a certificate of the Borrower certifying (A) as to the
accuracy in all material respects, after giving effect to this
Amendment and the Waiver in Section 1 hereof, of the representations
and warranties set forth in the Credit Agreement, the other Loan
Documents and in this Amendment, and (B) that there exists no Default
10
<PAGE> 11
or Event of Default, after giving effect to this Amendment and the
Waiver in Section 1 hereof, and the execution, delivery and
performance of this Amendment will not cause a Default or Event of
Default;
(iii) certified copies of resolutions of the boards of directors
of the Borrower and each Subsidiary authorizing the transactions
contemplated by this Amendment; and
(iv) such other documents, certificates and instruments as the
Administrative Agent shall require prior to the date hereof.
10. ADDITIONAL EVENT OF DEFAULT. It will be an Event of Default if the
Borrower shall fail, on or before May 15, 1999, to deliver to Lenders a
comprehensive business plan, acceptable as to scope to Administrative Agent and
its counsel and financial consultants, prepared in consultation with
PricewaterhouseCoopers.
11. REFERENCE TO CREDIT AGREEMENT. Upon the effectiveness of this
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 Amendment.
12. EXECUTION IN COUNTERPARTS. This Amendment 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.
13. GOVERNING LAW: BINDING EFFECT. This Amendment 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.
14. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as the
date first above written.
KEVCO, INC.
By: /s/ JERRY E. KIMMEL
-------------------------------------------
Name: Jerry E. Kimmel
--------------------------------------
Title: Chairman of the Board
-------------------------------------
NATIONSBANK, N.A., as Administrative Agent and
as a Lender
By: /s/ WILLIAM E. LIVINGSTON, IV
-------------------------------------------
Name: William E. Livingston, IV
--------------------------------------
Title: Managing Director
-------------------------------------
NATIONAL CITY BANK KENTUCKY
By: /s/ [ILLEGIBLE]
-------------------------------------------
Name: [Illegible]
--------------------------------------
Title: Senior Vice President
-------------------------------------
GUARANTY FEDERAL BANK, F.S.B.
By: /s/ ROBERT S. HAYS
-------------------------------------------
Name: Robert S. Hays
--------------------------------------
Title: Vice President
-------------------------------------
<PAGE> 13
WELLS FARGO BANK, N.A.
By: /s/ ROGER ERUENDT
-------------------------------------------
Name: Roger Eruendt
--------------------------------------
Title: Vice President
-------------------------------------
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc., as its
Investment Manager
By: /s/ MICHEL PRINCE
-------------------------------------------
Name: Michel Prince
--------------------------------------
Title: Vice President
-------------------------------------
ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors, Inc., as Collateral
Manager
By: /s/ MICHAEL J. CAMPBELL
-------------------------------------------
Name: Michael J. Campbell
--------------------------------------
Title: Senior Vice President &
-------------------------------------
Portfolio Manager
-------------------------------------
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
---------------------------------------
Name: Joel Serebransky
----------------------------------
Title: Vice President
---------------------------------
<PAGE> 14
MERRILL LYNCH DEBT STRATEGIES PORTFOLIO
By: Merrill Lynch Asset Management, L.P., as
Investment Advisor
By: /s/ ANDREW EIGGIO
-------------------------------------------
Name: Andrew Eiggio
--------------------------------------
Title: Authorized Signatory
-------------------------------------
Merrill Lynch Debt Global Investment Series:
INCOME STRATEGIES PORTFOLIO
By: Merrill Lynch Asset Management, L.P., as
Investment Advisor
By: /s/ ANDREW EIGGIO
-------------------------------------------
Name: Andrew Eiggio
--------------------------------------
Title: Authorized Signatory
-------------------------------------
BANK ONE, TEXAS, N.A.
By: /s/ BRADLEY C. PETERS
-------------------------------------------
Name: Bradley C. Peters
--------------------------------------
Title: Vice President
-------------------------------------
PAM CAPITAL FUNDING LP
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ JAMES DONDERO
-------------------------------------------
Name: James Dondero
--------------------------------------
Title: President
-------------------------------------
<PAGE> 15
ACKNOWLEDGED AND AGREED:
KEVCO MANAGEMENT, INC.
By: /s/ JERRY E. KIMMEL
-------------------------------------------
Name: Jerry E. Kimmel
--------------------------------------
Title: Chairman of the Board
-------------------------------------
KEVCO HOLDING, INC.
By: /s/ JERRY E. KIMMEL
-------------------------------------------
Name: Jerry E. Kimmel
--------------------------------------
Title: Chairman of the Board
-------------------------------------
KEVCO GP, INC.
By: /s/ JERRY E. KIMMEL
-------------------------------------------
Name: Jerry E. Kimmel
--------------------------------------
Title: Chairman of the Board
-------------------------------------
KEVCO COMPONENTS, INC.
By: /s/ JERRY E. KIMMEL
-------------------------------------------
Name: Jerry E. Kimmel
--------------------------------------
Title: Chairman of the Board
-------------------------------------
DCM DELAWARE, INC.
By: /s/ JERRY E. KIMMEL
-------------------------------------------
Name: Jerry E. Kimmel
--------------------------------------
Title: Chairman of the Board
-------------------------------------
<PAGE> 16
KEVCO MANUFACTURING, L.P.
By: KEVCO GP, INC., its General Partner
By: /s/ JERRY E. KIMMEL
-------------------------------------------
Name: Jerry E. Kimmel
--------------------------------------
Title: Chairman of the Board
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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 of the Board
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