<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 10-K/A
AMENDMENT NO. 2
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(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, 1995
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 0-17156
MERISEL, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-4172359
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
200 Continental Boulevard
El Segundo, California 90245-0948
(Address of principal executive offices) (Zip Code )
Registrant's telephone number, including area code: (310) 615-3080
Securities registered pursuant to Section 12(b) of the Act:
None.
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 Par Value
Title of Class
<PAGE>
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 information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to the Form 10-K. [ ]
As of December 12, 1996 the aggregate market value of
voting stock held by non-affiliates of the Registrant based
on the last sales price as reported by the Nasdaq National
Market was $53,933,878 (28,764,734 shares at a closing price
of $1 7/8).
As of December 12, 1996 the Registrant had 30,078,495
shares of Common Stock outstanding.
Documents Incorporated by Reference
None.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K
(a) List of documents filed as part of this Report:
(3) Exhibits
The exhibits listed on the accompanying Index of
Exhibits are filed as part of this Annual Report.
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EXHIBIT INDEX
Exhibit No. Description
3.1 Restated Certificate of Incorporation of
Registrant.(1)
3.2 Amendment to Certificate of Incorporation
of Registrant dated August 22, 1990.(6)
3.3 Bylaws, as amended, of Merisel, Inc.(8)
4 Indenture dated October 15, 1994 between
the Company and NationsBank of Texas, N.A. as
Trustee, relating to the Company's 121/2% Senior
Notes Due 2004, including the form of such Senior
Notes attached as Exhibit A thereto.(14)
10.1 Microamerica Substitute Stock Option Plan of
Registrant together with related forms of Stock
Option Agreements.(4)*
10.2 1983 Stock Option Plan of Softsel Computer
Products, Inc., as amended, together with Form of
Incentive Stock Option Agreement and Form of
Nonqualified Stock Option Agreement under 1983
Employee Stock Option Plan.(7)*
10.3 1983 Employee Stock Option Plan of Softsel
Computer Products, Inc., as amended, together with
Form of Incentive Stock Option Agreement and Form
of Nonqualified Stock Option Agreement under the
1983 Employee Stock Option Plan.(7)*
10.4 1991 Employee Stock Option Plan of Merisel,
Inc. together with Form of Incentive Stock Option
Agreement and Form of Nonqualified Stock Option
Agreement under the 1991 Employee Stock Option
Plan.(8)*
10.5 Merisel, Inc. 1992 Stock Option Plan for
Nonemployee Directors.(10)*
10.6 Incentive Stock Option Agreements between
Registrant and Michael D. Pickett dated as of
October 1, 1986 and March 4, 1987.(1)*
10.7 Nonqualified Stock Option Agreement between
Registrant and Michael D. Pickett dated as of
December 11, 1987.(1)*
10.8 Amendment to Stock Option Agreements together
with Joint Escrow Instructions between Michael D.
Pickett and Registrant dated as of August 11,
1988.(1)*
10.9 Softsel Computer Products, Inc. Executive
Deferred Compensation Plan.(9)*
10.10 Employment Agreement between Registrant and Michael
D. Pickett dated as of August 14, 1992.(11)*
10.11 Merisel, Inc. Amended and Restated 401(k)
Retirement Savings Plan.(15)*
10.12 Asset Transfer, Assignment and Assumption Agreement
dated as of December 23, 1993 by and between
Registrant and Merisel Americas, Inc.(13)
10.13 Asset Transfer, Assignment and Assumption Agreement
dated as of December 23, 1993 by and between
Registrant and Merisel Europe, Inc.(13)
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10.14 Lease between Registrant and Pacifica Holding
Company dated April 6, 1989.(2)
10.15 Lease Agreement dated October 27, 1988 by and
between Rosewood Development Corporation and
Microamerica, Inc. re: property located in
Marlborough, Massachusetts.(3)
10.16 Lease Agreement dated May 23, 1990 by and between
Kilroy-Freehold El Segundo Company and
Softsel/Microamerica, Inc., re: property located in
El Segundo, California.(5)
10.17 Lease Agreement dated October 1991 by and between
Koll Hayward Associates II and Merisel, Inc.(9)
10.18 Asset Purchase Agreement dated January 31, 1994
between ComputerLand Corporation, Merisel FAB, Inc.
and for purposes of Section 2.2 thereof, the
Registrant. Portions of this agreement have been
omitted pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.(12)
10.19 Guaranty Agreement dated January 31, 1994 between
ComputerLand Corporation and the Registrant.(12)
10.20 Distribution and Services Agreement dated January
31, 1994 between ComputerLand Corporation and
Merisel FAB, Inc. (''Services Agreement'') Portions
of this agreement has been omitted pursuant to Rule
24b-2 of the Securities Act of 1934, as
amended.(12)
10.21 Amendment Number 13 to Services Agreement dated as
of January 31, 1996. Portions of this agreement
have been omitted pursuant to Rule24b-2 of the
Securities Act of 1934, as amended.
10.22 Stock Purchase Agreement dated January 31, 1994
between the Registrant and ComputerLand
Corporation.(12)
10.23 Amended and Restated Senior Note Purchase Agreement
by and among each of the purchasers named therein
and Merisel Americas, Inc., dated as of December
23, 1993 (''Senior Note Purchase Agreement'').(13)
10.24 First Amendment, dated as of September 30, 1994 to
Senior Note Purchase Agreement, by and among the
Noteholders named therein and Merisel Americas,
Inc.(16)
10.25 Form of Second Amendment dated as of June 23, 1995
to Senior Note Purchase Agreement.
10.26 Amended and Restated Subordinated Note Purchase
Agreement by and among each of the purchasers named
therein and Merisel Americas, Inc., dated as of
December 23, 1993 (''Subordinated Note Purchase
Agreement'').(13)
10.27 First Amendment, dated as of September 30, 1994, to
Subordinated Note Purchase Agreement, by and among
the Noteholders named therein and Merisel Americas,
Inc.(16)
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10.28 Revolving Credit Agreement dated as of December 23,
1993 among Merisel Americas, Inc., Merisel Europe,
Inc., the Registrant, the lender parties thereto,
Citicorp USA, Inc., as agent, and Citibank, N.A.,
as designated issuer (''Revolving Credit
Agreement'').(13)
10.29 First Amendment, dated as of September 29, 1994, to
Revolving Credit Agreement, by and among Merisel
Americas, Inc., Merisel Europe, Inc., Merisel, Inc.
and the financial institutions named therein.(16)
10.30 Second Amendment, dated as of December 1, 1994, to
Revolving Credit Agreement, by and among Merisel,
Americas, Inc., Merisel Europe, Inc., Merisel,
Inc., and the financial institutions named
therein.(15)
10.31 Third Amendment, dated as of February 27, 1995, to
Revolving Credit Agreement, by and among Merisel
Americas, Inc., Merisel Europe, Inc., Merisel,
Inc., and the financial institutions named
therein.(15)
10.32 Receivable Transfer Agreement dated as of October
2, 1995 by and between Merisel Americas, Inc. and
Merisel Capital Funding, Inc.(17)
10.33 Receivable Purchase and Servicing Agreement dated
as of October 2, 1995 by and among Merisel Capital
Funding, Inc., Redwood Receivables Corporation,
Merisel Americas, Inc. and General Electric Capital
Corporation.(17)
10.34 Annex X to Receivable Transfer Agreement and
Receivables Purchase and Servicing Agreement dated
as of October 2, 1995.(17)
10.35 Form of Receivables Purchase Agreement between
Merisel Canada, Inc. and Canadian Master Trust
dated as of December 15, 1995.
10.36 Form of Security Agreement between Merisel
Properties, Inc. and Heller Financial, Inc. dated
December 29, 1995.
10.37 Deed of Trust, Security Agreement, Assignment of
Leases and Rents and Fixture Filing between Merisel
Properties, Inc. and Heller Financial, Inc. dated
December 29, 1995.
10.38 Agreement for the Sale and Purchase of Debts
between Deutche Financial Services (UK) Limited and
Merisel (UK) Limited dated October 12, 1995.
10.39 Form of Agreement between Merisel, Inc. and Michael
D. Pickett dated February 12, 1996.
10.40 Share Purchase Agreement between Merisel, Inc. and
Merisel Asia, Inc. and Tech Pacific Holdings Ltd.
dated March 7, 1996.
10.41 Form of Employment Agreement between Merisel, Inc.
and the following:
James L. Brill
Paul Lemerise
John Thompson
Tom Reeves
Marty Wolf (17)
10.42 Form of Retention Agreement between Merisel, Inc.
and the following:
James L. Brill
Paul Lemerise
John Thompson
Tom Reeves
Marty Wolf (17)
21 Subsidiaries of the Registrant.
27 Financial Data Schedule for the year Ended December
31, 1995.
* Management contract or executive compensation plan
or arrangement.
(1) Filed as an exhibit to the Form S-1 Registration
Statement of Softsel Computer Products, Inc., No. 33-
23700, and incorporated herein by this reference.
(2) Filed as an exhibit to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1989 of Softsel
Computer Products, Inc., and incorporated herein by this
reference.
(3) Filed as an exhibit to the Quarterly Report on Form
10-Q for the quarter ended March 31, 1990 of Softsel
Computer Products, Inc., and incorporated herein by this
reference.
(4) Filed as an exhibit to the Form S-8 Registration
Statement of Softsel Computer Products, Inc., No. 33-
34296, filed with the Securities and Exchange Commission
April 12, 1990, and incorporated herein by this
reference.
(5) Filed as an exhibit to the Quarterly Report on Form
10-Q for the quarter ended June 30, 1990 of Softsel
Computer Products, Inc., and incorporated herein by this
reference.
(6) Filed as an exhibit to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1990, and
incorporated herein by this reference.
(7) Filed as an exhibit to the Form S-8 Registration
Statement of Softsel Computer Products, Inc., No. 33-
35648, filed with the Securities and Exchange Commission
June 29, 1990, and incorporated herein by this reference.
(8) Filed as an exhibit to the Quarterly Report on Form
10-Q for the quarter ended June 30, 1991, and
incorporated herein by this reference.
(9) Filed as an exhibit to the Form S-3 Registration
Statement of Merisel, Inc., No. 33-45696, filed with the
Securities and Exchange Commission on February 14, 1992
and incorporated herein by this reference.
(10) Filed as an exhibit to the Quarterly Report on Form
10-Q for the quarter ended June 30, 1992, and
incorporated herein by this reference.
(11) Filed as an exhibit to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1992 of Merisel,
Inc., and incorporated herein by this reference.
(12) Filed as an exhibit to the Current Report on Form 8-
K dated February 14, 1994, as amended on March 24, 1994
and October 4, 1994 and incorporated herein by this
reference.
(13) Filed as an exhibit to the Annual Report on Form 10-
K for the year ended December 31, 1993 and incorporated
herein by this reference.
(14) Filed as an exhibit to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1994 and
incorporated herein by this reference.
(15) Filed as an exhibit to the Annual Report on Form 10-
K for the year ended December 31, 1994 and incorporated
herein by this reference.
(16) Filed as an exhibit to the Form S-3 Registration
Statement of the Registrant, No. 33-55195, filed with the
Securities and Exchange Commission, August 23, 1994, and
incorporated herein by this reference.
(17) Filed as an exhibit to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1995 and
incorporated herein by this reference.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Act of 1934, the Registrant has duly caused this
amendment no. 2 to the report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date: December 18, 1996
Merisel, Inc.
By: /s/ JAMES ILLSON
James Illson
Senior Vice President,
Finance,
Chief Financial Officer
and Assistant Secretary
Pursuant to the requirements of the Securities Exchange
Act of 1934, this amendment no. 2 to the report has been
signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Dwight A. Chairman of the Board of December
Steffensen Directors, and Chief 18, 1996
Dwight A. Steffensen Executive Officer
(Principal Executive
Officer)
/s/ James Illson Senior Vice December
James Illson President_Finance, 18, 1996
Chief Financial
Officer, Assistant
Secretary and Director
(Principal Financial
Officer)
/s/ Bruce Zeedik Corporate Controller December
Bruce Zeedik (Principal Accounting 18, 1996
Officer)
/s/ Joseph Abrams Director December
Joseph Abrams 18, 1996
/s/ Dr. Arnold Director December
Miller 18, 1996
Dr. Arnold Miller
<PAGE>
AMENDMENT NO. 13 dated as
of January 31, 1996, to the
DISTRIBUTION AND SERVICES AGREEMENT
dated as of January 31, 1994, as
amended through the date hereof
(the "Agreement"), between VANSTAR
CORPORATION, a Delaware corporation
formerly known as ComputerLand
Corporation (the "Seller"), and
MERISEL FAB, INC., a Delaware
corporation (the "Buyer").
The Seller, the Buyer and Merisel, Inc., a Delaware
corporation ("Merisel"), have entered into a letter of intent
dated July 12, 1995 (the "Letter of Intent"), regarding their
intent to amend the Agreement and to amend the Asset Purchase
Agreement dated as of January 31, 1994, among the Seller, the
Buyer and Merisel. This Amendment No. 13 constitutes the
amendments to the Agreement contemplated by the Letter of Intent.
NOW THEREFORE, for good and valuable consideration, the
parties do hereby agree as follows:
Capitalized Terms; Effectiveness of Amendments.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Agreement. Except as
otherwise provided in this Amendment No. 13, all amendments and
prior letters of agreement executed between the parties shall
continue in effect through the end of the Winding Down Period or
the earlier termination of the Agreement, except for the
following amendments and letters of agreement which shall
terminate commencing upon the effective date of this Amendment
No. 13: Amendments Nos. 1, 2 and 7; letter of agreement dated
March 31, 1995 entitled "Drop Ship Fee Reduction" and letter of
agreement dated September 15, 1995 relating to Apple Computer
distribution fees and rebates.
Amendments to Section 1.1.
Effective as of April 1, 1995, the definition
of "Base Percentage" set forth in Section 1.1 of the Agreement is
amended to read in its entirety as follows:
"Base Percentage" means [*].
Effective as of April 1, 1995, the definition
of "Baseline Revenue" set forth in Section 1.1 of the Agreement
is amended to read in its entirety as follows:
"Baseline Revenue" means [*] for each calendar
month. For the period prior to February 1, 1996,
Baseline Revenue is subject to adjustment pursuant to
<PAGE>
Section 2.36 upon the occurrence of any Baseline
Adjustment Event.
The definition of "Distribution Period" set
forth in Section 1.1 of the Agreement is amended by substituting
the phrase "the Scheduled Termination Date" for the date "January
31, 1996"; and Section 1.1 of the Agreement is amended by adding
thereto in appropriate alphabetical order the following
definition:
"Scheduled Termination Date" means
April 30, 1997.
Effective as of April 1, 1995, the definition
of "Excess Percentage" set forth in Section 1.1 of the Agreement
is amended to read in its entirety as follows:
"Excess Percentage" means [*].
The definition of "Extended Payment
Termination Date" set forth in Section 1.1 of the Agreement is
amended to read in its entirety as follows:
"Extended Payment Termination Date"
means the first to occur of (i) the
termination of the Distribution Period and
(ii) July 15, 1997.
Effective as of April 1, 1995, each of the
definitions of "Adjusted Freight", "Adjusted Freight Percentage",
"Adjusted Gross Margin", "Baseline Period", "Customer Freight
Accruals", and "Total MDF Percentage" set forth in Section 1.1 of
the Agreement is deleted in its entirety.
Section 1.1 of the Agreement is amended by
adding thereto in appropriate alphabetical order the following
definitions:
"Basic Extended Payment Amount" means,
for any date on or after January 31, 1996
set forth on Schedule 1.1-2A, the amount
set forth in Column A opposite such date on
such Schedule 1.1-2A; provided, however,
that for any date on or after the date of
termination of the Distribution Period, the
Basic Extended Payment Amount shall be [*].
"Additional Extended Payment Amount"
means (i) for any date prior to the
Extended Payment Termination Date, the
amount set forth in Column B opposite such
date on Schedule 1.1-2A, and (ii) for any
<PAGE>
date on or after the Extended Payment
Termination Date, [*].
Effective as of April 1, 1995, clause (ii) of
the definition of "Material Default" set forth in Section 1.1 of
the Agreement is amended to read in its entirety as follows:
(ii) in the case of Buyer, the failure
by Buyer to pay to Seller, when due in
accordance with Section 2.5(a) or any other
applicable Section hereof (including on any
extended due date as provided in Section
2.34), the Buyer Purchase Price for any
products shipped by Seller hereunder, or
any other amount due to Seller under this
Agreement not later than 2 p.m., California
time, on the date of receipt (or on the
immediately following Business Day if such
date of receipt is not a Business Day) by
Buyer of notice from Seller stating the
amount past due (a "Payment Failure"),
which Payment Failure continues uncured for
a period of 20 consecutive days; provided,
however, that if, subject to Section
2.5(d), Buyer in good faith disputes that
it is obligated to pay all or any portion
of any amount claimed by Seller hereunder,
and Buyer has paid each amount not disputed
in good faith to Seller not later than 2
p.m., California time, on the date of
receipt (or on the immediately following
Business Day if such date of receipt is not
a Business Day) by Buyer of the notice
referred to in this sentence applicable to
such amount, and (if the aggregate of all
amounts in dispute exceed $1,000,000) has
paid all disputed amounts into escrow
pursuant to Section 2.26 not later than
such time, then, pending resolution of such
dispute pursuant to Article VIII hereof
(whether pursuant to negotiation, mediation
or litigation), the failure of Buyer to pay
to Seller any amounts so disputed shall not
constitute a Payment Failure for purposes
of this definition. Seller shall not be
permitted to give any notice referred to in
this clause (ii) prior to the first
Business Day following the date any such
payment was due and any such notice
received after 12 noon, California time, on
any day shall be deemed to have been
received on the immediately following day.
<PAGE>
The definition of "Monthly Distribution Fee"
set forth in Section 1.1 of the Agreement is hereby amended by
adding thereto the following proviso:
, provided that, for purposes of the
foregoing, [*] shall not include [*]
The definition of "Winding Down Period" set
forth in Section 1.1 of the Agreement is amended by replacing the
reference to "Section 6.2(a)" with a reference to "Section 7.1".
Amendment to Section 2.2. Clause (iii) of Section
2.2(e) of the Agreement is hereby amended to read in its entirety
as follows:
(iii) Buyer, in its sole discretion, overrides
any such credit hold through the override function of
CAMBAR.
Amendment to Section 2.5. Section 2.5(c) of the
Agreement is amended to read in its entirety as follows:
(c) Anything contained herein to the contrary
notwithstanding, Seller may suspend all sales to Buyer
under this Agreement, and all shipments to Customers on
Buyer's behalf hereunder, if Buyer fails to pay to
Seller, when due (after taking into account any right
of set off to which Buyer is then entitled under
Section 5.7) in accordance with Section 2.5(a) or any
other applicable Section hereof (including on any
extended due date as provided in Section 2.34), the
Buyer Purchase Price for any products shipped by Seller
hereunder, or any other amount due to Seller under this
Agreement, not later than 2 p.m., California time, on
the first Business Day after the date of receipt (or on
the immediately following Business Day if such date of
receipt is not a Business Day) by Buyer of notice from
Seller stating the amount past due; provided, however,
that if, subject to Section 2.5(d), Buyer in good faith
disputes that it is obligated to pay all or any portion
of any amount claimed by Seller hereunder, and Buyer
has paid each amount not disputed in good faith to
Seller not later than 2 p.m., California time, on the
date of receipt (or on the immediately following
Business Day if such date of receipt is not a Business
Day) by Buyer of the notice referred to in this
sentence applicable to such amount, and (if the
aggregate of all amounts in dispute exceed $1,000,000)
has paid all disputed amounts into escrow pursuant to
Section 2.26 not later than such time, then, pending
resolution of such dispute pursuant to Article VIII
hereof (whether pursuant to negotiation, mediation or
litigation), Seller shall not suspend any sales and/or
<PAGE>
shipments pursuant to this SectionE2.5(c) by reason of
Buyer's failure to pay such disputed amounts to Seller.
Seller shall not be permitted to give any notice
referred to in the preceding sentence prior to the
first Business Day following the date any such payment
was due, and any such notice received after 12 noon,
California time, on any day shall be deemed to have
been received on the immediately following day. During
any period of such suspension of sales and shipments,
the Performance Standards shall also be suspended.
Without prejudice to the rights of Seller to suspend
sales to Buyer and shipments to Customers as provided
in this Section 2.5(c), any dispute regarding the
obligation of Buyer to make any payment to Seller
hereunder shall be submitted for resolution pursuant to
Article VIII hereof; provided, however, that if the
aggregate of all amounts in dispute is in excess of
$1,000,000, the expedited procedures of Section 8.3
shall apply. Following any suspension of sales to
Buyer and shipments to Customers for nonpayment as
provided in this Section 2.5(c), Seller may, as a
condition to resuming such sales and shipments, require
that Buyer provide adequate assurance that future
amounts due to Seller hereunder will be paid when due.
Anything contained herein to the contrary
notwithstanding, Seller may suspend all sales to Buyer
under this Agreement, and all shipments to Customers on
Buyer's behalf hereunder, if Buyer fails to pay to
Seller (or, in the case of a good faith dispute, into
escrow in accordance with the proviso to the first
sentence of this Section 2.5(c)) by 2 p.m., California
time, on the date due any amount in excess of [*]
payable pursuant to Section 2.8(b).
Amendment to Section 2.5(d). Section 2.5(d) of the
Agreement is amended by adding the following phrase immediately
following the word "notwithstanding" contained in the first
sentence of such Section 2.5(d) and immediately following the
word "otherwise" contained in the second sentence of such Section
2.5(d):
, except as permitted by Section 5.7,
Amendment to Section 2.7(e). Section 2.7(e) of the
Agreement is amended by adding the following immediately
following the first sentence of such Section:
Notwithstanding the above, Seller shall within 30 days
of each month's end provide Buyer a monthly
reconciliation of [*] and [*] showing any underpayment
or overpayment by Buyer to Seller of [*] and [*]in that
month. If Seller fails to provide that monthly
reconciliation within 30 days of the month's end, then
<PAGE>
Buyer shall not be obligated to pay Seller for any
underpayment by Buyer for [*] and [*] in that month.
Amendment to Section 2.8. Clauses (iv) and (v) of
Section 2.8(b) of the Agreement and the immediately following
paragraph are amended to read in their entirety as follows:
(iv) the Additional Receivable Amount outstanding
at the beginning of such Business Day and the Maximum
Extended Payment Amount (as defined in Section 2.34)
for the immediately following Business Day; and
(v) the amount of any wire transfer made by Buyer
to Seller on such Business Day pursuant to Section
2.5(a) (to the extent that Buyer shall have given
notice of such wire transfer pursuant to such Section
2.5(a)).
Subject to the further provisions of this Section
2.8(a), (i) if the Daily Net Payment Amount is
positive, then Buyer shall pay that amount to Seller by
the following Business Day pursuant to Section 2.5(a),
and (ii) if the Daily Net Payment Amount is negative,
then Seller shall pay that amount to Buyer by the
following Business Day by wire transfer of immediately
available funds, in accordance with Section 2.12(c).
Notwithstanding the immediately preceding sentence, (i)
if the Additional Receivable Amount to be outstanding
as of the end of the next Business Day is less than the
Maximum Extended Payment Amount as of such next
Business Day, then no payment pursuant to the preceding
sentence shall be made by Buyer other than for the
amount of the Daily Net Payment Amount that would
otherwise cause the Additional Receivable Amount to
exceed the Maximum Extended Payment Amount and (ii) if
the Additional Receivable Amount to be outstanding as
of the end of the next Business Day would otherwise
exceed the Maximum Extended Payment Amount as of such
next Business Day, then any payment otherwise to be
made by Buyer on such next Business Day shall be
increased, or any payment that would otherwise be made
by Seller on such next Business Day shall be decreased,
or a combination of the two, so that such excess does
not occur. Seller shall provide Buyer, on a monthly
basis, with a printed summary of all transactions
completed hereunder, in a form reasonably acceptable to
Buyer. Buyer shall reimburse Seller on a monthly basis
for the postage costs of mailing printed invoices.
<PAGE>
Amendments to Section 2.10.
Section 2.10(b) of the Agreement is amended by
deleting clauses (ii)(4), (ii)(8), (ii)(10) and (ii)(11) thereof
and by replacing each such clauses with the following words
immediately after the foregoing arabic numbers: "[Intentionally
Omitted.]"
Section 2.10(c) of the Agreement is amended to
read in its entirety as follows:
On the Determination Date in each month,
Seller shall calculate and certify to Buyer, substantially in the
form of Schedule 2.10(d), the Monthly Distribution Fee for the
preceding month.
Section 2.10(d) of the Agreement is deleted in
its entirety and replaced with the following: "(d)
[Intentionally Omitted.]".
Section 2.10(e)(i)(A) of the Agreement is
amended to read in its entirety as follows:
(A) the Monthly Distribution Fee
Clauses (ii)(A) and (ii)(B) of Section 2.10(e)
of the Agreement are amended to read in their entirety as
follows:
(A) the Monthly Distribution Fee
plus (B) [*] [previous provision intentionally
omitted]
The last sentence of Section 2.10(g) of the
Agreement is deleted in its entirety.
Amendment to Section 2.17. Section 2.17(g) of the
Agreement is hereby terminated in its entirety and replaced with
the following: "(g) [Intentionally Omitted]"
Amendment to Section 2.18. Section 2.18(f) of the
Agreement is hereby deleted in its entirety and replaced with the
following: "(f) [Intentionally Omitted]"
Amendment to Section 2.27. Section 2.27(c) is
amended by deleting the words "second anniversary of the Closing
Date" and by replacing such words with the words "Scheduled
Termination Date."
Amendment to Section 2.34. Section 2.34 of the
Agreement is amended to read in its entirety as follows:
2.34 Additional Receivable Amount.
(a) Anything contained herein to the
<PAGE>
contrary notwithstanding, on any date
occurring on or after January 31, 1996,
Buyer shall not be in default of its
payment obligations to Seller under Section
2.8(b) if and to the extent that the
aggregate principal amount of all Extended
Payment Obligations (the "Additional
Receivable Amount") does not exceed the
sum, determined as of such date, of (i) the
Basic Extended Payment Amount and (ii) the
Additional Extended Payment Amount. Such
sum shall be referred to herein as the
"Maximum Extended Payment Amount".
Anything contained herein to the contrary
notwithstanding, if on any date on or after
January 31, 1996 the Additional Receivable
Amount would otherwise exceed the Maximum
Extended Payment Amount, then Buyer shall
pay to Seller the amount of such excess in
immediately available funds on such date.
(b) Buyer shall pay a financing fee
to Seller on the amount from time to time
by which (i) the Additional Receivable
Amount exceeds (ii) the Basic Extended
Payment Amount. Subject to the last
sentence of this Section 2.34(b), such
financing fee shall be payable at a
variable rate per annum equal to the Prime
Rate minus 2 percent per annum. Such
financing fee shall be due and payable
monthly in arrears pursuant to Section
2.10. Anything contained herein to the
contrary notwithstanding, Buyer shall pay
on demand a financing fee to Seller at the
rate set forth in Section 2.5(b) on that
portion of the Extended Payment Obligations
that is not paid when due (taking into
account the provisions of this Section
2.34).
(c) All amounts paid by Buyer
pursuant to Section 2.8(b) shall be applied
to reduce the Extended Payment Obligations
in the order in which they were incurred.
Amendment to Section 2.36. Effective as of
February 1, 1996, Section 2.36 of the Agreement is amended by
inserting the following phrase immediately following the word
"paid" in the introductory clause thereof: "for the period
ending prior to February 1, 1996"
Amendments to Section 3.2.
<PAGE>
Section 3.2(a) and Section 3.2(c) of the
Agreement are each amended by deleting the words "two-year
period" and by replacing such words with the words "period ending
on the Scheduled Termination Date".
Section 3.2(b) of the Agreement is amended by
deleting the words "second anniversary of the Closing Date" and
by replacing such words with the words "Scheduled Termination
Date".
Amendments to Section 5.2. The definitions of
"Class C Event" and "Special Transition Period" contained in
Section 5.2 of the Agreement are each amended by deleting the
words "second anniversary of the Closing Date" and by replacing
such words with the words "Scheduled Termination Date".
Amendment to Section 5.6. Section 5.6(a)(iii) of
the Agreement is hereby amended to read in its entirety as
follows:
(iii) the Assumed Distribution Fee
Amendment to Section 5.7. Section 5.7 of the
Agreement is amended to read in its entirety as follows:
If, on the last day of the Winding Down Period,
Buyer shall have outstanding any unpaid claim (an "Unpaid
Claim") for monetary damages pursuant to this Agreement,
then, in addition to any other remedies under this
Agreement, Buyer shall be entitled to an offset up to the
amount of such Unpaid Claim, against the [*]
that would otherwise be due on the last day of the Winding
Down Period. If Seller's liability for the Unpaid Claim, or
the amount of the Unpaid Claim, has not been resolved by
agreement between Buyer and Seller or by a final,
nonappealable order of a court with jurisdiction in the
matter, the amount so offset shall be paid by Buyer into
escrow as contemplated by Section 2.26.
In the last sentence of Section 2.26, the reference to "the
Closing Date" shall be deemed to refer to "January 31, 1996."
Amendments to Section 7.1. Section 7.1(a) of the
Agreement is amended to read in its entirety as follows:
(a)The Seller and the Buyer shall continue to
negotiate in good faith to establish a timetable and
procedures for the termination of the Logistics
Services provided pursuant to Article II. Such
negotiations shall include (i) discussions regarding
the Seller's proposed maintenance of inventories solely
at the Indianapolis DC from which all shipments to
<PAGE>
Customers on Buyer's behalf hereunder would be made
during the Winding Down Period (as defined below); and
(ii) discussions regarding Buyer's purchase of
inventory from Seller during the Winding Down Period.
If the Seller and the Buyer shall be unable to agree
upon such a timetable and procedures prior to June 30,
1996, the Distribution Period shall automatically be
extended until the date that is [*] following the
Scheduled Termination Date (such [*] period being
referred to as the "Winding Down Period"). Anything
contained in Section 1.1 and Article II to the contrary
notwithstanding, the "Monthly Distribution Fee" payable
for any month during the Winding Down Period shall be
calculated by multiplying (i) the Applicable Revenue
for such month by (ii) the percentage derived by
dividing (A) the aggregate Monthly Distribution Fee
payable for the [*] period ending on the Scheduled
Termination Date by (B) the aggregate Applicable
Revenue for such [*] period. As shall be reasonably
requested by Buyer, Seller shall provide Buyer with
information necessary for Buyer and Seller to manage
inventory prior to and during the Winding Down Period
including but not limited to information pertaining to
SKU's, on-hand inventory, orders, product availability
and Buyer's daily run rate.
Unless otherwise agreed to by Seller and Buyer, the
volume of products sold by Seller to Buyer hereunder
shall be reduced ratably in each month during the
Winding Down Period to reduce the volume of products
sold by Seller to Buyer hereunder to zero at the end of
the Winding Down Period. Such reduction will be
effected by reducing the number of Customers eligible
to place orders for delivery pursuant to this Agreement
in accordance with the further provisions of this
Section 7.1(a). On or prior to the date two months
prior to the Scheduled Termination Date (the "Reduction
Designation Date"), Buyer will provide Seller with a
list (the "Reduction List") of all Customers,
designating for each Customer whether such Customer's
eligibility to place orders will cease on the first day
of the [*] of the Winding Down Period and the
last day of the Winding Down Period (each a "Reduction
Date"). Such designations shall be made so that on
each Reduction Date Customers representing
approximately [*] of the aggregate sales volume under
this Agreement (based on the average of the monthly
sales figures for the [*] period ending on the date
[*] prior to the Scheduled Termination Date) will
cease to be eligible to place orders hereunder. If
Buyer fails to deliver the Reduction List by the date
seven days following the Reduction Designation Date,
<PAGE>
then Seller may deliver a Reduction List to Buyer not
later than the date 14 days following the Reduction
Designation Date. Customers shall cease to be eligible
to place orders in accordance with the Reduction List.
Buyer further recognizes that Seller has an interest in
reducing the inventory at its distribution centers in
proportion to the reduction of Buyer's volume of
products purchased during the Winding Down Period.
Accordingly, Buyer and Seller have agreed that Buyer
and Seller shall negotiate in good faith and reach
agreement on a plan for the reduction of Seller's
inventory. Unless otherwise agreed in connection with
the agreement reached pursuant to the previous
sentence, Buyer shall purchase from Seller on each
Reduction Date an amount of inventory of each SKU equal
to the product of (x) the Pro Rata Percentage times (y)
the amount (determined as of the date that is two
Business Days prior to the Reduction Date) of Excess
Inventory (as defined below) with respect to such SKU;
provided, however, that Buyer shall have no obligation
to purchase inventory on any Reduction Date pursuant to
this sentence to the extent that the aggregate purchase
price for such inventory shall exceed [*] . Buyer
and Seller shall negotiate in good faith an allocation
of those SKU's to be sold to Buyer pursuant to the
previous sentence. If no agreement is reached, each of
Buyer and Seller shall designate SKU's having an
aggregate purchase price of [*] as those SKU's to be
so sold.
The purchase price for all inventories purchased by
Buyer from Seller pursuant to the provisions of this
Section 7.1(a) shall be paid by Buyer to Seller, on or
prior to the date of shipment, in cash or on terms that
are substantially equivalent to cash (such as, for
example, by credit against an amount then due and
payable in cash from Seller to Buyer). Such purchase
price shall equal the sum of (i) [*] for such
inventories reduced by an amount equal to such [*]
multiplied by the Prime Rate (in effect on the date
that is two Business Days prior to the payment date)
plus [*] multiplied by a fraction the numerator of
which shall equal 30 and the denominator of which shall
equal 365, (ii) [*] for such inventories and (iii)
[*] for such inventories. Seller shall arrange for
the delivery of all inventories purchased pursuant to
this Section 7.1(a) at Seller's cost to Buyer's
warehouse in either the greater Chicago, Illinois area
or the Hayward, California area, such warehouse to be
designated by Buyer. Title and risk of loss with
respect to all such inventories shall pass from Seller
to Buyer, F.O.B. Seller's Indianapolis DC or Livermore
<PAGE>
DC, as applicable. Seller shall transfer to Buyer the
benefit of [*] with the purchase
of inventory by Buyer pursuant to this Section 7.1 and
to which Buyer would have otherwise be entitled if such
purchase had been made during the Distribution Period
even if received after the Distribution Period
terminates.
In addition to the foregoing, Buyer and Seller shall
negotiate in good faith with vendors with whom
outstanding orders for allocation to Buyer exist on the
Scheduled Termination Date to transfer Buyer's orders
associated with inventory on allocation to Buyer. In
the event and to the extent that a vendor does not
cooperate with the foregoing transfer request, Buyer
shall have the option to purchase Buyer's proportionate
share of allocable inventory received by Seller from
such vendor during the Winding Down Period. For
purposes of the preceding sentence, Buyer's
proportionate share shall be determined in accordance
with the allocation percentages for each vendor in
effect on the Scheduled Termination Date as
contemplated by Section 2.22(b). If Buyer has not
exercised its option to purchase its proportionate
share of any allocable inventory received by Seller
within five Business Days of delivery by Seller to
Buyer of notice of such receipt, then Seller shall be
free to sell such allocable inventory.
For the purposes of this Section 7.1(a), the following
terms shall have the meanings set forth below:
"Historical Run Rate" shall have the
meaning set forth in Schedule 2.21.
"Monthly Run Rate" means, for any SKU
as of any date, the product of (x) twenty-
one (i.e., the average number of working
days in a month) times (y) the Historical
Run Rate for such SKU as of such date.
"Buy-In Inventory" means: (i) any
Status 1 and Status 2 SKUs (as defined in
Schedule 2.3(a)) to the extent that the
total number of that SKU received by Seller
during a month in the Buy-In Period exceeds
the Monthly Run Rate for the SKU as
determined at the beginning of that month;
or (ii) any SKU where a vendor promised
Seller special terms and conditions if
Seller purchased that SKU in a certain
quantity unless Buyer agreed in writing to:
<PAGE>
(A) the purchase of that SKU in that
quantity under those terms; and (B) that
the purchase is excepted from determination
of the Buy-In Inventory calculation for
that SKU.
"Buy-In Period" means the period
beginning two months before the Scheduled
Termination Date and ending on the last day
of the Winding Down Period.
"Buyer Run Rate" means, for any SKU,
the product of (x) twenty-one (i.e., the
average number of working days in a month)
times (y) the portion of the Historical Run
Rate for such SKU as of the Scheduled
Termination Date attributable to the
Subject Business.
"Excess Inventory" means, for any SKU
as of any date, the lesser of (x) the
excess, if any, of (1) the total amount of
Seller's available inventory of such SKU
(not including obsolete or discontinued
product or Buy-In Inventory) minus (2) the
Monthly Run Rate for such SKU as of such
date or (y) an amount equal to three times
the Monthly Run Rate for such SKU as of
such date.
"Inventory Need" means, for any SKU,
an amount equal to [*] of the Buyer Run
Rate for such SKU.
"Pro Rata Percentage" means, for any
SKU as of any date, the quotient obtained
by dividing (x) the Inventory Need for such
SKU by (y) the Monthly Run Rate for such
SKU as of such date.
Anything contained herein to the contrary
notwithstanding, the provisions of this Article VII
shall not apply to any termination of the Distribution
Period pursuant to Section 5.5 or Article VI.
<PAGE>
Amendments to Section 9.11.
Section 9.11 of the Agreement is amended by
replacing the words "second anniversary of the date hereof" with
the words "Scheduled Termination Date".
Section 9.11(b) of the Agreement is amended by
terminating clauses (A)(ii) and (iii) contained therein in their
entirety and by replacing such clauses with the following: "(ii)
[Intentionally Omitted]; (iii) [Intentionally Omitted]; and"
Section 9.11(b) of the Agreement is further
amended by terminating clause (B)(ii) contained therein in its
entirety and by replacing such clause with the following: "(ii)
[Intentionally Omitted]; and"
Section 9.11(b) of the Agreement is further
amended by adding to clause (B)(iii) contained therein the
following: "; provided, however, that in any event such
purchaser shall execute and deliver to Seller prior to the sale
by Buyer a confidentiality agreement in form and substance
satisfactory to Seller pursuant to which such purchaser shall
agree with Seller that it shall not disclose any confidential
information of Seller that has been accessible to and used by
Buyer or that becomes accessible to or is used by such purchaser.
Amendments to Article X. Article X of the
Agreement is hereby terminated in its entirety and replaced with
the following: "ARTICLE X [Intentionally Omitted.]".
Amendment to Schedules. The Agreement is amended
by adding thereto as Schedule 1.1-2A the Schedule set forth on
Annex A to this Amendment No. 13. Schedule 2.21 to the Agreement
is amended by replacing the words "second anniversary of the
Closing Date" with the words "Scheduled Termination Date"
wherever they appear in such Schedule 2.21. Each of Schedules
11.7(a)(ii) and 11.7(a)(iii) to the Agreement is hereby
terminated in its entirety and replaced with the following:
"[Intentionally Omitted.]".
Payment of Excess Distribution Fee. On JanuaryE31,
1996, Seller shall pay to Buyer by wire transfer the amount equal
to the difference between the [*] , as calculated in
accordance with this Amendment No. 13 and the amount of the [*]
actually paid by the Buyer for the period from AprilE1, 1995
through December 31, 1995, together with interest on the amount
of such difference calculated at an annual rate equal to the
Prime Rate plus [*] from the date on which the applicable
Distribution Fee was paid.
Amendment to Sublease. Concurrently with the
execution and delivery of this Amendment, Buyer and Seller are
entering into an Extension of Sublease substantially in the form
attached hereto as Annex B.
Continued Effect of Agreement. Except as amended
hereby, the Agreement shall remain in full force and effect in
accordance with its terms and conditions. The extension to the
Distribution and Services Period provided by this Amendment No.
<PAGE>
13 shall not obligate any party to the Agreement to agree to any
further extension to such Period.
Miscellaneous. This Amendment No. 13 (a) shall be
governed by the laws of the State of California, (b) shall be
binding upon and inure to the benefit of the Seller and the Buyer
and their respective successors and permitted assigns, (c) shall
not be amended or modified except by written instrument signed by
the Seller and the Buyer and (d) represents the entire agreement
of the parties with respect to the subject matter hereof and
supersedes all prior written and oral agreements and
understandings with respect thereto, including those portions of
the Letter of Intent contemplating the amendments provided
hereby.
Counterparts. This Amendment No. 13 may be
executed in counterpart by the parties hereto.
[*] Omitted pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended
<PAGE>
IN WITNESS WHEREOF, the parties have set their hands as
of the date first written above.
VANSTAR CORPORATION
By:________________________________
Name:
Title:
MERISEL FAB, INC.
By:________________________________
Name:
Title:
<PAGE>
ANNEX A
SCHEDULE 1.1-2A
For Any Day
(A) (B) (C)
Basic Additional Maximum
Payment Extended Extended
Extended Payment Payment
On or But Not Amount Amount Amount
After After
T T T T T
* Notwithstanding anything set forth in the foregoing table,
on and after the date on which the Distributed Period is
terminated, the Basic Extended Payment Amount, the Additional
Extended Payment Amount and the Maximum Extended Payment Amount
shal be T and all Extended Payment Obligations shall be due and
payable on such dated of termination.
** If an inventory reduction is agreed, then this amount may
decline on an accelerated basis.
T Omitted pursuant to Rule 24b-2 of the Securities Act of
1934, as amended.
