SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
Merisel, Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
589849108
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(CUSIP Number)
Judith A. Witterschein, Vice President & Corporate Counsel
Stonington Partners, Inc., 767 Fifth Avenue, New York, NY 10153
(212) 339-8536
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(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications)
January 26, 1998
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(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
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13D
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CUSIP No. 589849108
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Phoenix Acquisition Company II, L.L.C.
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(2) Check the Appropriate Box if a Member of a Group (See Instructions)
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|_| (b)
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(3) SEC Use Only
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(4) Source of Funds (See Instructions) OO
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e).
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(6) Citizenship or Place of Organization Delaware
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Number of (7) Sole Voting Power 50,000,000 Shares
Shares ----------------------
Beneficially (8) Shared Voting Power
Owned by ----------------------
Each (9) Sole Dispositive Power 50,000,000 Shares
Reporting ------------------
Person (10) Shared Dispositive Power
With -----------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
50,000,000 Shares
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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(13) Percent of Class Represented by Amount in Row (11) 62.44%
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(14) Type of Reporting Person (See Instructions) OO
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13D
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CUSIP No. 589849108
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Stonington Capital Appreciation 1994 Fund, L.P.
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(2) Check the Appropriate Box if a Member of a Group (See Instructions)
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|_| (b)
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(3) SEC Use Only
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(4) Source of Funds (See Instructions) OO
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e).
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(6) Citizenship or Place of Organization Delaware
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Number of (7) Sole Voting Power
Shares ---------------------
Beneficially (8) Shared Voting Power 50,000,000 Shares
Owned by -----------------
Each (9) Sole Dispositive Power
Reporting ----------------
Person (10) Shared Dispositive Power 50,000,000 Shares
With -----------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
50,000,000 Shares
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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(13) Percent of Class Represented by Amount in Row (11) 62.44%
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(14) Type of Reporting Person (See Instructions) PN
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13D
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CUSIP No. 589849108
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Stonington Partners, L.P.
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(2) Check the Appropriate Box if a Member of a Group (See Instructions)
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|_| (b)
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(3) SEC Use Only
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(4) Source of Funds (See Instructions) OO
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e).
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(6) Citizenship or Place of Organization Delaware
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Number of (7) Sole Voting Power
Shares ---------------------
Beneficially (8) Shared Voting Power 50,000,000 Shares
Owned by -----------------
Each (9) Sole Dispositive Power
Reporting ----------------
Person (10) Shared Dispositive Power 50,000,000 Shares
With -----------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
50,000,000 Shares
-----------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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(13) Percent of Class Represented by Amount in Row (11) 62.44%
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(14) Type of Reporting Person (See Instructions) PN
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13D
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CUSIP No. 589849108
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Stonington Partners, Inc. II
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(2) Check the Appropriate Box if a Member of a Group (See Instructions)
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|_| (b)
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(3) SEC Use Only
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(4) Source of Funds (See Instructions) OO
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e).
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(6) Citizenship or Place of Organization Delaware
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Number of (7) Sole Voting Power
Shares ---------------------
Beneficially (8) Shared Voting Power 50,000,000 Shares
Owned by -----------------
Each (9) Sole Dispositive Power
Reporting ----------------------
Person (10) Shared Dispositive Power 50,000,000 Shares
With -----------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
50,000,000 Shares
-----------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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(13) Percent of Class Represented by Amount in Row (11) 62.44%
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(14) Type of Reporting Person (See Instructions) CO
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13D
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CUSIP No. 589849108
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Stonington Partners, Inc.
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(2) Check the Appropriate Box if a Member of a Group (See Instructions)
|_| (a)
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|_| (b)
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(3) SEC Use Only
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(4) Source of Funds (See Instructions) OO
------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e).
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(6) Citizenship or Place of Organization Delaware
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Number of (7) Sole Voting Power
Shares ---------------------
Beneficially (8) Shared Voting Power 50,000,000 Shares
Owned by -----------------
Each (9) Sole Dispositive Power
Reporting ----------------
Person (10) Shared Dispositive Power 50,000,000 Shares
With -----------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
50,000,000 Shares
-----------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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(13) Percent of Class Represented by Amount in Row (11) 62.44%
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(14) Type of Reporting Person (See Instructions) CO
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This Amendment No. 3 amends the Statement on Schedule 13D
filed with the Securities and Exchange Commission on September 29, 1997, as
amended by Amendment No. 1 to Schedule 13D filed with the Securities and
Exchange Commission on October 10, 1997 and by Amendment No. 2 to Schedule 13D
filed with the Securities and Exchange Commission on December 23, 1997, by
Phoenix Acquisition Company II, L.L.C. ("Phoenix"), Stonington Capital
Appreciation 1994 Fund, L.P. (the "Fund"), Stonington Partners, L.P.
("Stonington L.P."), Stonington Partners, Inc. II ("Stonington II") and
Stonington Partners, Inc. ("Stonington"). This Amendment No. 3 is filed with
respect to the shares of common stock, par value $0.01 per share (the "Shares"),
of Merisel, Inc., a Delaware corporation (the "Company").
On September 19, 1997, Phoenix entered into a Stock and Note
Purchase Agreement (the "Agreement") with the Company and Merisel Americas,
Inc., a Delaware corporation and wholly owned subsidiary of the Company
("Merisel Americas"), pursuant to which Phoenix purchased from the Company
4,901,316 Shares (the "Purchased Shares") for $14.9 million. Also pursuant to
the Agreement Phoenix acquired a Convertible Promissory Note (the "Note") from
the Company and Merisel Americas for $137.1 million.
The Fund made a Hart-Scott-Rodino Pre-merger Notification
filing with the U.S. Department of Justice with respect to the acquisition by
Phoenix of the Conversion Shares. On September 29, 1997, the waiting period for
Hart-Scott-Rodino Pre-merger Notification expired. On October 6, 1997 Phoenix
converted $3,296,285.70 of the Note into 1,084,305 Shares. Following such
conversion Phoenix owned 16.9% of the then outstanding Shares.
On December 19, 1997 the Company held a special meeting of its
shareholders at which the stockholders, among other things, approved the
issuance of Shares to Phoenix upon conversion of the Note. Following the special
stockholders meeting on December 19, 1997, the balance of the Note was converted
into 44,014,379 Shares, increasing Phoenix's ownership to 62.44% of the then
outstanding Shares after giving effect to the issuance.
On January 26, 1998, the Company and Merisel Americas entered
into a Revolving Credit Agreement and Convertible Promissory Note due July 2,
1998 (the "Convertible Note"), with Bankers Trust Company ("BT") which permits
borrowings thereunder by Merisel Americas of up to $46.5 million outstanding at
any time. In order to induce BT to enter into the Convertible Note, the Fund,
its wholly owned subsidiary, Stonington Financing Inc., a Delaware corporation
("Financing"), and Stonington L.P. entered into a series of agreements that
could result in Financing purchasing the Convertible Note. In the event
Financing purchases the Convertible Note from BT, the Convertible Note is
convertible into Shares at the option of Financing, at a conversion rate equal
to the average closing price of the Shares on NASDAQ for the fifteen trading
days immediately preceding the date of conversion.
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Item 6 of the Schedule 13D is hereby amended in its entirety
to read as follows:
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
On September 19, 1997, Phoenix entered into the Agreement
pursuant to which Phoenix purchased from the Company the Purchased Shares for
$14.9 million. Also pursuant to the Agreement Phoenix acquired the Note for
$137.1 million. The Company and Merisel Americas also entered into a
registration rights agreement with Phoenix (the "Registration Rights
Agreement"), which provides for (i) registration of the Note under certain
circumstances including in the event the Note has not been converted or repaid
by January 31, 1998, and (ii) registration of the Purchased Shares and the
Conversion Shares.
On January 26, 1998, the Company and Merisel Americas entered
into the Convertible Note with BT. In order to induce BT to enter into the
Convertible Note, the Fund caused Financing to enter into a note put agreement
with BT (the "Note Put Agreement") pursuant to which BT may require Financing to
purchase the Convertible Note in the event of a default by Merisel Americas. In
the event Financing purchases the Convertible Note from BT pursuant to the Note
Put Agreement, the Convertible Note is convertible into Shares (the "Convertible
Shares") at the option of Financing at a conversion rate equal to the average
closing price of the Shares on NASDAQ for the fifteen trading days immediately
preceding the date of conversion. The Convertible Note also provides that the
Registration Rights Agreement will be amended to include any Convertible Shares
issued upon conversion of all or any portion of the Convertible Note.
To enable Financing to purchase the Convertible Note, the Fund
entered into an equity subscription agreement (the "Equity Subscription
Agreement") with Financing pursuant to which the Fund will purchase equity of
Financing in an aggregate amount of up to $48 million in the event BT exercises
its rights under the Note Put Agreement. Financing also executed an assignment
of equity proceeds to BT pursuant to which Financing assigned to BT its rights
to receive payments under the Equity Subscription Agreement in order to effect
the performance of Financing's obligations under the Note Put Agreement.
In connection with this transaction, Stonington L.P. executed
an undertaking for the benefit of BT (the "General Partner Undertaking")
ensuring that there would be sufficient undrawn capital commitments at the Fund
through November 13, 1998 to allow the Fund to purchase sufficient equity in
Financing to enable Financing to meet its obligations under the Note Put
Agreement.
Financing and Merisel Americas also entered into a letter
agreement (the "Letter Agreement"), wherein Merisel Americas covenants that, in
the event BT gives notice
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to Financing pursuant to the Note Put Agreement requiring Financing to purchase
the Convertible Note, to use its best efforts to refinance the Convertible Note
prior to its final maturity date.
To the best of the knowledge of the Reporting Persons, there
are no other contracts, arrangements, understandings or relationships (legal or
otherwise) among the Reporting Persons or between the Reporting Persons and any
other person with respect to any Shares or any other securities of the Company,
including but not limited to transfer or voting of any of the Shares or any
other securities of the Company, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits or loss, or the giving or
withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed herewith:
A. Revolving Credit Agreement and Convertible Promissory Note Due
July 2, 1998 among Merisel Americas, Inc., Merisel, Inc. and
Bankers Trust Company. (Incorporated by reference to Exhibit
99.1 of the Form 8-K filed by Merisel, Inc. dated January 29,
1998.)
B. Note Put Agreement dated as of January 26, 1998 between
Stonington Financing Inc. and Bankers Trust Company.
(Incorporated by reference to Exhibit 99.1 of the Form 8-K
filed by Merisel, Inc. dated January 29, 1998.)
C. Equity Subscription Agreement dated as of January 26, 1998
between Stonington Capital Appreciation 1994 Fund, L.P. and
Stonington Financing Inc.
D. Assignment of Equity Proceeds dated as of January 26, 1998
between Stonington Financing Inc. and Bankers Trust Company.
E. General Partner Undertaking dated as of January 26, 1998 from
Stonington Partners, L.P. to Bankers Trust Company.
F. Letter Agreement dated as of January 26, 1998 between Merisel
Americas, Inc. and Stonington Financing Inc. (Incorporated by
reference to Exhibit 99.2 of the Form 8-K filed by Merisel,
Inc. dated January 29, 1998.)
G. Joint Filing Agreement.
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SIGNATURES
After reasonable inquiry and to the best of their knowledge
and belief, the undersigned certify that the information contained in this
Statement is true, complete and correct.
Dated: January 30, 1998
PHOENIX ACQUISITION COMPANY II, L.L.C.
By: Stonington Capital Appreciation 1994
Fund, L.P., its sole member
By: Stonington Partners, L.P., its general partner
By: Stonington Partners, Inc. II, its general partner
By: /s/ Judith A. Witterschein
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Name: Judith A. Witterschein
Title: Vice President and Secretary
STONINGTON CAPITAL APPRECIATION 1994
FUND, L.P.
By: Stonington Partners, L.P., its general partner
By: Stonington Partners, Inc. II, its general partner
By: /s/ Judith A. Witterschein
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Name: Judith A. Witterschein
Title: Vice President and Secretary
STONINGTON PARTNERS, L.P.
By: Stonington Partners, Inc. II, its general partner
By: /s/ Judith A. Witterschein
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Name: Judith A. Witterschein
Title: Vice President and Secretary
STONINGTON PARTNERS, INC. II
By: /s/ Judith A. Witterschein
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Name: Judith A. Witterschein
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Title: Vice President and Secretary
STONINGTON PARTNERS, INC.
By: /s/ Judith A. Witterschein
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Name: Judith A. Witterschein
Title: Vice President and Secretary
<PAGE>
EXHIBIT G
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange
Act of 1934, as amended, the persons named below agree to the joint filing on
behalf of each of them of a statement on Schedule 13D (including amendments
thereto) with respect to the common stock, par value $0.01 per share of Merisel,
Inc. and further agree that this Joint Filing Agreement be included as an
Exhibit to such joint filing. In evidence thereof, the undersigned hereby
execute this Agreement this 30th day of Janaury, 1998.
PHOENIX ACQUISITION COMPANY II, L.L.C.
By: Stonington Capital Appreciation 1994
Fund, L.P., its sole member
By: Stonington Partners, L.P., its general partner
By: Stonington Partners, Inc. II, its general partner
By: /s/ Judith A. Witterschein
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Name: Judith A. Witterschein
Title: Vice President and Secretary
STONINGTON CAPITAL APPRECIATION 1994
FUND, L.P.
By: Stonington Partners, L.P., its general partner
By: Stonington Partners, Inc. II, its general partner
By: /s/ Judith A. Witterschein
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Name: Judith A. Witterschein
Title: Vice President and Secretary
STONINGTON PARTNERS, L.P.
By: Stonington Partners, Inc. II, its general partner
By: /s/ Judith A. Witterschein
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Name: Judith A. Witterschein
Title: Vice President and Secretary
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STONINGTON PARTNERS, INC. II
By: /s/ Judith A. Witterschein
-------------------------------------------------
Name: Judith A. Witterschein
Title: Vice President and Secretary
STONINGTON PARTNERS, INC.
By: /s/ Judith A. Witterschein
-------------------------------------------------
Name: Judith A. Witterschein
Title: Vice President and Secretary
<PAGE>
EQUITY SUBSCRIPTION AGREEMENT
This Equity Subscription Agreement (this "Agreement") is dated
as of January 26, 1998 and is by and between (i) STONINGTON CAPITAL APPRECIATION
1994 FUND, L.P. (the "Fund"), a limited partnership formed and existing under
the laws of the State of Delaware and that certain Amended and Restated
Agreement of Limited Partnership dated as of December 15, 1994 Restated to
Include Amendments Made on or Prior to March 15, 1995 (the "Fund Partnership
Agreement") among Stonington Partners, L.P., a Delaware limited partnership
("General Partner"), as general partner, Stonington Partners, Inc., a Delaware
corporation, as Initial Management Company, and the limited partners executing
such agreement (the "Limited Partners"), on the one hand, and (ii) STONINGTON
FINANCING INC., a Delaware corporation ("Equity Sub"), on the other hand.
PRELIMINARY STATEMENTS
A. Pursuant to Section 3.1(a) of the Fund Partnership
Agreement, the Limited Partners are committed to contribute capital to the Fund
(such commitments being the "Capital Commitments"). The Capital Commitments are
effective during the "Commitment Period" (such term being used herein as defined
in the Fund Partnership Agreement), and the Commitment Period extends beyond
November 13, 1998 unless earlier terminated pursuant to the Fund Partnership
Agreement. General Partner, the general partner of the Fund, is entitled
pursuant to Section 3.1(b) of the Fund Partnership Agreement to call upon the
Capital Commitments for the purpose of funding the Fund's investments (and
commitments to make investments) in "Portfolio Companies" (such term being used
herein as defined in the Partnership Agreement) and "Additional Investments"
(such term being used herein as defined in the Partnership Agreement) in
Portfolio Companies, including convertible debt securities of Portfolio
Companies. As of the date hereof, the aggregate amount of the remaining unfunded
Capital Commitments exceeds the aggregate amount of the Fund's commitments to
make investments by not less than $48,000,000.
B. An investment of the Fund authorized and made in accordance
with the terms of the Fund Partnership Agreement is its investment in the
outstanding capital stock of Merisel, Inc., a Delaware corporation ("Holdings"),
which constitutes a Portfolio Company.
C. Merisel Americas, a wholly-owned subsidiary of Holdings, is
seeking a $46,500,000 revolving credit facility upon the terms and conditions
set forth in the Revolving Credit Agreement and Convertible Promissory Note Due
July 2, 1998 (as amended, supplemented or otherwise modified from time to time,
the "Note"), made by Merisel Americas to the order of Bankers Trust Company
("Lender").
D. In order to induce Lender to make the loans to be evidenced
by the Note, Equity Sub has agreed to enter into that certain Note Put Agreement
dated as of January 26, 1998 (as amended, supplemented or otherwise modified
from time to time, the
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"Note Put Agreement") with Lender pursuant to which Equity Sub agrees, under
certain circumstances, to purchase all rights of Lender outstanding under the
Note and to assume the obligations of Lender thereunder.
E. In order to induce Equity Sub to enter into the Note Put
Agreement, Holdings has agreed, as provided in the Note, that in the event
Equity Sub purchases the Note pursuant to the terms of the Note Put Agreement
the indebtedness of Merisel Americas evidenced by the Note will be exchangeable
at the option of Equity Sub into common stock of Holdings on the terms and
conditions set forth in the Note.
F. Equity Sub is a wholly-owned subsidiary of the Fund that
was formed for the purpose of entering into the transactions contemplated by the
Note Put Agreement.
G. The purchase of the Note by Equity Sub pursuant to the Note
Put Agreement will constitute an Additional Investment in Holdings and,
accordingly, General Partner is entitled pursuant to the Fund Partnership
Agreement to call upon the Capital Commitments for the purpose of funding Equity
Sub's purchase of the Note pursuant to the Note Purchase Agreement.
H. The Fund is willing to enter into this Agreement with
Equity Sub, and the execution and delivery of this Agreement is a condition to
the effectiveness of the Note.
REPRESENTATIONS AND WARRANTIES
Each of the Fund and Equity Sub hereby represents and warrants
to and for the benefit of Lender as follows:
(a) each Credit Party (such term being used herein as defined
in the Note) has all requisite corporate or partnership power and
authority to execute and deliver each Credit Document (such term being
used herein as defined in the Note) to which it is a party;
(b) each Credit Document constitutes the duly authorized,
legally valid and binding obligation of each Credit Party that is a
party thereto, enforceable against such Credit Party in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles
relating to enforceability;
(c) all consents and grants of approval required to have been
granted by any Person in connection with the execution, delivery and
performance of the Credit Documents have been granted;
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(d) the execution, delivery and performance by Credit Parties
of the Credit Documents do not and will not (i) violate any law,
governmental rule or regulation, court order or agreement (including
without limitation the Holdings Indenture) to which any Credit Party is
subject or by which its properties are bound or the charter documents
or bylaws of any Credit Party or (ii) result in the creation of any
lien or other encumbrance with respect to the property of any Credit
Party; and
(e) each of the preliminary statements or recitals contained
in each of the Credit Documents is true and correct in all material
respects.
AGREEMENT
1. The Fund hereby irrevocably and unconditionally agrees and
undertakes that, on or before November 13, 1998, the Fund will contribute equity
capital in cash to Equity Sub in such amounts, up to the aggregate amount of
$48,000,000, and at such times as are necessary to permit Equity Sub timely to
perform all of its financial obligations under the Note Put Agreement.
2. In furtherance of the foregoing, and not in limitation
thereof, the Fund agrees that, if General Partner delivers to Limited Partners a
Capital Demand Notice (such term being used herein as defined in the Fund
Partnership Agreement) to the effect that (a) all amounts outstanding under the
Note shall not have been repaid in full on or before June 1, 1998 or (ii) Lender
has delivered to General Partner written notice to the effect that an Event of
Default under, and as defined in, the Note has occurred and is continuing and
that Lender has elected to exercise its right to require Equity Sub to purchase
the Note pursuant to the Note Put Agreement, the Fund shall contribute equity
capital in cash to Equity Sub in the amount equal to the Put Purchase Price
(such term being used herein as defined in the Note Put Agreement).
3. The Fund acknowledges and agrees that Equity Sub is,
concurrently herewith, assigning its rights under this Agreement to Lender
pursuant to an Assignment of Equity Proceeds in the form of Annex A attached
hereto, and that Lender may require that all cash equity contributions required
hereunder be paid directly to Lender to be applied to the payment of the Put
Purchase Price.
4. Each party to this Agreement represents and warrants to the
other party hereto that it has full power and authority to enter into this
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Agreement has been duly authorized, executed and
delivered by such party and that this Agreement constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy,
<PAGE>
4
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity.
5. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party against whom enforcement of such change, waiver, discharge or
termination is sought.
6. The Preliminary Statements set forth at the beginning of
this Agreement are incorporated into, and constitute a part of, this Agreement.
7. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
8. This Agreement may be executed in one or more counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
9. This Agreement shall terminate without any action by any
party upon such date as all amounts outstanding under the Note have been
indefeasibly paid in full, as provided in Section 6 of the Note Put Agreement,
and the Commitment (as defined in the Note) has terminated.
10. This Agreement shall become effective on the date of the
execution and delivery of counterparts hereof by each of the parties hereto.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned parties hereto have caused
this Agreement to be executed and delivered by their duly authorized officers as
of January 26, 1998.
STONINGTON FINANCING INC.,
a Delaware corporation
By:
----------------------------------
Name:
Title:
STONINGTON CAPITAL APPRECIATION
1994 FUND, L.P.
By: STONINGTON PARTNERS, L.P.,
General Partner
By: STONINGTON PARTNERS, INC. II
By:
----------------------------------
Name:
Title:
<PAGE>
ANNEX A
[FORM OF]
ASSIGNMENT OF EQUITY PROCEEDS
This ASSIGNMENT OF EQUITY PROCEEDS (this "Agreement") is dated
as of January 26, 1998 and entered into by and among STONINGTON FINANCING INC.,
a Delaware corporation ("Assignor"), and BANKERS TRUST COMPANY, a New York
banking corporation ("Assignee").
RECITALS
WHEREAS, Merisel Americas, Inc., a Delaware corporation
("Merisel Americas"), and Lender are concurrently herewith entering into that
certain Revolving Credit Agreement and Convertible Promissory Note Due July 2,
1998 (as hereafter amended, supplemented or otherwise modified from time to
time, the "Note"; terms defined therein and not otherwise defined herein being
used herein as therein defined) pursuant to which Lender has agreed to extend
credit to Merisel Americas on the terms and conditions set forth therein;
WHEREAS, to induce Lender to enter into the Note and make
Loans thereunder, Assignor is currently herewith entering into the Note Put
Agreement pursuant to which Assignor agrees to purchase the Note from Lender
upon the terms and conditions set forth in the Note Put Agreement;
WHEREAS, the Fund currently owns approximately 62% of the
issued and outstanding common stock of Holdings (on a fully-diluted basis),
Holdings owns 100% of the outstanding capital stock of Merisel Americas, and
Assignor is a wholly-owned subsidiary of the Fund;
WHEREAS, the Fund expects to receive direct and indirect
benefits from the agreements, terms and provisions of the Note and, accordingly,
(i) the Fund is concurrently herewith entering into the Equity Subscription
Agreement pursuant to which the Fund agrees to contribute equity capital to
Assignor in an amount up to $48,000,000 and (ii) General Partner is concurrently
herewith entering into the General Partner Undertaking pursuant to which General
Partner agrees (a) to call upon unfunded Capital Commitments (such term being
used herein as defined in the General Partner Undertaking) at such times and in
such amounts as are necessary to permit the Fund to perform its obligations
under the Equity Subscription Agreement and (b) to reserve $48,000,000 of
unfunded Capital Commitments to permit such calls;
<PAGE>
A-2
WHEREAS, as further inducement to Lender to enter into the
Note and to make Loans thereunder, Assignor has agreed to assign to Lender all
of its rights to receive payments under the Equity Subscription Agreement in
order to effect the performance of Assignor's obligations under the Note Put
Agreement, and such assignment is a condition precedent to the effectiveness of
the Note;
WHEREAS, the execution and delivery of this Agreement is a
condition precedent to the effectiveness of the Note; and
WHEREAS, in consideration of the premises and in order to
induce Lender to make Loans pursuant to the Note, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Equity Sub has agreed to enter into this Agreement with Lender.
NOW, THEREFORE, in consideration of the foregoing, Assignor
and Assignee agree as follows:
Section 1. Assignment.
(a) In order to effect the payment of all obligations of
Assignor under the Note Put Agreement and the performance of all obligations of
Assignor thereunder, Assignor hereby assigns to Assignee, as an absolute
assignment and not merely as security (subject only to the giving of the notice
referred to in Section 1(b)), all of Assignor's rights to receive payments (but
not Assignor's obligations) arising under the Equity Subscription Agreement.
(b) Assignor hereby agrees that, upon giving effect to the
assignment described above and upon notice from Assignee to General Partner,
Assignee shall be entitled to receive all payments to be made to Assignor under
the Equity Subscription Agreement.
(c) In the event that Assignor receives any payments which
Assignee is entitled to receive hereunder, Assignor shall receive such payments
in trust for Assignee, shall hold such payments segregated from all other assets
of Assignor, and shall forthwith deliver such payments to Assignee in the form
received together with any necessary indorsements. Assignee shall apply the
amount of any such payments received by Assignee to the payment of the "Put
Purchase Price" under the Note Put Agreement.
(d) In the event that Assignee applies the amount of any such
payments received by Assignee to the payment of the "Put Purchase Price" under
the Note Put Agreement, such application shall, to the extent of such amount so
applied, satisfy the obligation of Assignor under the Note Put Agreement to make
a payment in a corresponding amount in respect of such "Put Purchase Price".
<PAGE>
A-3
Section 2. Certain Representations, Warranties and Agreements.
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the interests being assigned hereunder and that such
interests are free and clear of any adverse claim.
(b) Each party to this Agreement represents and warrants to
the other party hereto that it has full power and authority to enter into this
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Agreement has been duly authorized, executed and
delivered by such party and that this Agreement constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity.
Section 3. Miscellaneous.
(a) Each party to this Agreement hereby agrees from time to
time, upon request of the other party hereto, to take such additional actions
and to execute and deliver such additional documents and instruments as such
other party may reasonably request to effect the transactions contemplated by,
and to carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party against whom enforcement of such change, waiver, discharge or
termination is sought.
(c) In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
(d) THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(e) This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto.
(f) This Agreement may be executed in one or more counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and
<PAGE>
A-4
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.
(g) This Agreement shall become effective on the date of the
execution and delivery of counterparts hereof by Assignor and Assignee.
[Remainder of page intentionally left blank]
<PAGE>
A-5
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
ASSIGNOR: STONINGTON FINANCING INC.
By:
----------------------------------
Name:
Title:
ASSIGNEE: BANKERS TRUST COMPANY
By:
----------------------------------
Name:
Title:
<PAGE>
ASSIGNMENT OF EQUITY PROCEEDS
This ASSIGNMENT OF EQUITY PROCEEDS (this "Agreement") is dated
as of January 26, 1998 and entered into by and among STONINGTON FINANCING INC.,
a Delaware corporation ("Assignor"), and BANKERS TRUST COMPANY, a New York
banking corporation ("Assignee").
RECITALS
WHEREAS, Merisel Americas, Inc., a Delaware corporation
("Merisel Americas"), and Lender are concurrently herewith entering into that
certain Revolving Credit Agreement and Convertible Promissory Note Due July 2,
1998 (as hereafter amended, supplemented or otherwise modified from time to
time, the "Note"; terms defined therein and not otherwise defined herein being
used herein as therein defined) pursuant to which Lender has agreed to extend
credit to Merisel Americas on the terms and conditions set forth therein;
WHEREAS, to induce Lender to enter into the Note and make
Loans thereunder, Assignor is currently herewith entering into the Note Put
Agreement pursuant to which Assignor agrees to purchase the Note from Lender
upon the terms and conditions set forth in the Note Put Agreement;
WHEREAS, the Fund currently owns approximately 62% of the
issued and outstanding common stock of Holdings (on a fully-diluted basis),
Holdings owns 100% of the outstanding capital stock of Merisel Americas, and
Assignor is a wholly-owned subsidiary of the Fund;
WHEREAS, the Fund expects to receive direct and indirect
benefits from the agreements, terms and provisions of the Note and, accordingly,
(i) the Fund is concurrently herewith entering into the Equity Subscription
Agreement pursuant to which the Fund agrees to contribute equity capital to
Assignor in an amount up to $48,000,000 and (ii) General Partner is concurrently
herewith entering into the General Partner Undertaking pursuant to which General
Partner agrees (a) to call upon unfunded Capital Commitments (such term being
used herein as defined in the General Partner Undertaking) at such times and in
such amounts as are necessary to permit the Fund to perform its obligations
under the Equity Subscription Agreement and (b) to reserve $48,000,000 of
unfunded Capital Commitments to permit such calls;
WHEREAS, as further inducement to Lender to enter into the
Note and to make Loans thereunder, Assignor has agreed to assign to Lender all
of its rights to receive payments under the Equity Subscription Agreement in
order to effect the performance of Assignor's obligations under the Note Put
Agreement, and such assignment is a condition precedent to the effectiveness of
the Note;
<PAGE>
2
WHEREAS, the execution and delivery of this Agreement is a
condition precedent to the effectiveness of the Note; and
WHEREAS, in consideration of the premises and in order to
induce Lender to make Loans pursuant to the Note, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Equity Sub has agreed to enter into this Agreement with Lender.
NOW, THEREFORE, in consideration of the foregoing, Assignor
and Assignee agree as follows:
Section 1. Assignment.
(a) In order to effect the payment of all obligations of
Assignor under the Note Put Agreement and the performance of all obligations of
Assignor thereunder, Assignor hereby assigns to Assignee, as an absolute
assignment and not merely as security (subject only to the giving of the notice
referred to in Section 1(b)), all of Assignor's rights to receive payments (but
not Assignor's obligations) arising under the Equity Subscription Agreement.
(b) Assignor hereby agrees that, upon giving effect to the
assignment described above and upon notice from Assignee to General Partner,
Assignee shall be entitled to receive all payments to be made to Assignor under
the Equity Subscription Agreement.
(c) In the event that Assignor receives any payments which
Assignee is entitled to receive hereunder, Assignor shall receive such payments
in trust for Assignee, shall hold such payments segregated from all other assets
of Assignor, and shall forthwith deliver such payments to Assignee in the form
received together with any necessary indorsements. Assignee shall apply the
amount of any such payments received by Assignee to the payment of the "Put
Purchase Price" under the Note Put Agreement.
(d) In the event that Assignee applies the amount of any such
payments received by Assignee to the payment of the "Put Purchase Price" under
the Note Put Agreement, such application shall, to the extent of such amount so
applied, satisfy the obligation of Assignor under the Note Put Agreement to make
a payment in a corresponding amount in respect of such "Put Purchase Price".
Section 2. Certain Representations, Warranties and Agreements.
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the interests being assigned hereunder and that such
interests are free and clear of any adverse claim.
<PAGE>
3
(b) Each party to this Agreement represents and warrants to
the other party hereto that it has full power and authority to enter into this
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Agreement has been duly authorized, executed and
delivered by such party and that this Agreement constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity.
Section 3. Miscellaneous.
(a) Each party to this Agreement hereby agrees from time to
time, upon request of the other party hereto, to take such additional actions
and to execute and deliver such additional documents and instruments as such
other party may reasonably request to effect the transactions contemplated by,
and to carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party against whom enforcement of such change, waiver, discharge or
termination is sought.
(c) In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
(d) THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(e) This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto.
(f) This Agreement may be executed in one or more counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
<PAGE>
4
(g) This Agreement shall become effective on the date of the
execution and delivery of counterparts hereof by Assignor and Assignee.
[Remainder of page intentionally left blank]
<PAGE>
5
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
ASSIGNOR: STONINGTON FINANCING INC.
By:
----------------------------------
Name:
Title:
ASSIGNEE: BANKERS TRUST COMPANY
By:
----------------------------------
Name:
Title:
<PAGE>
GENERAL PARTNER UNDERTAKING
STONINGTON PARTNERS, L.P.
767 Fifth Avenue
New York, New York 10153
As of January 26, 1998
BANKERS TRUST COMPANY
280 Park Avenue
New York, New York 10016
Re: Stonington Capital Appreciation 1994 Fund, L.P.
Undertaking to Capitalize Stonington Financing Inc.
Dear Sirs:
The undersigned, Stonington Partners, L.P. ("General Partner"), a Delaware
limited partnership, is the general partner of Stonington Capital Appreciation
1994 Fund, L.P. (the "Fund"), a limited partnership formed and existing under
the laws of the State of Delaware and that certain Amended and Restated
Agreement of Limited Partnership dated as of December 15, 1994 Restated to
Include Amendments Made on or Prior to March 15, 1995 (the "Fund Partnership
Agreement") by and among General Partner, as general partner, Stonington
Partners, Inc., a Delaware corporation, as Initial Management Company, and the
limited partners executing such agreement (the "Limited Partners").
PRELIMINARY STATEMENTS
A. Pursuant to Section 3.1(a) of the Fund Partnership
Agreement, the Limited Partners are committed to contribute capital to the Fund
(such commitments being the "Capital Commitments"). The Capital Commitments are
effective during the "Commitment Period" (such term being used herein as defined
in the Fund Partnership Agreement), and the Commitment Period extends beyond
November 13, 1998 unless earlier terminated pursuant to the Fund Partnership
Agreement. General Partner, the general partner of the Fund, is entitled
pursuant to Section 3.1(b) of the Fund Partnership Agreement to call upon the
Capital Commitments for the purpose of funding the Fund's investments (and
commitments to make investments) in "Portfolio Companies" (such term being used
herein as defined in the Partnership Agreement) and "Additional Investments"
(such term being used herein as defined in the Fund Partnership Agreement) in
Portfolio Companies, including convertible debt securities of Portfolio
Companies. As of the date hereof, the aggregate
<PAGE>
2
amount of the remaining unfunded Capital Commitments exceeds the aggregate
amount of the Fund's commitments to make investments by not less than
$48,000,000.
B. An investment of the Fund authorized and made in accordance
with the terms of the Fund Partnership Agreement is its investment in the
outstanding capital stock of Merisel, Inc., a Delaware corporation ("Holdings"),
which constitutes a Portfolio Company.
C. Merisel Americas, a wholly-owned subsidiary of Holdings, is
seeking a $46,500,000 revolving credit facility upon the terms and conditions
set forth in the Revolving Credit Agreement and Convertible Promissory Note Due
July 2, 1998 (as amended, supplemented or otherwise modified from time to time,
the "Note"), made by Merisel Americas to the order of Bankers Trust Company
("Lender").
D. In order to induce Lender to make the loans to be evidenced
by the Note, Stonington Financing Inc. ("Equity Sub") has agreed to enter into
that certain Note Put Agreement dated as of January 26, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Note Put Agreement")
with Lender pursuant to which Equity Sub agrees, under certain circumstances, to
purchase all rights of Lender outstanding under the Note and to assume the
obligations of Lender thereunder.
E. In order to induce Equity Sub to enter into the Note Put
Agreement, Merisel Americas has agreed, as provided in the Note, that in the
event Equity Sub purchases the Note pursuant to the terms of the Note Put
Agreement the indebtedness of Merisel Americas evidenced by the Note will be
exchangeable at the option of Equity Sub into common stock of Holdings on the
terms and conditions set forth in the Note.
F. Equity Sub is a wholly-owned subsidiary of the Fund that
was formed for the purpose of entering into the transactions contemplated by the
Note Put Agreement.
G. The purchase of the Note by Equity Sub pursuant to the Note
Put Agreement will constitute an Additional Investment in Holdings and,
accordingly, General Partner is entitled pursuant to the Fund Partnership
Agreement to call upon the Capital Commitments for the purpose of funding Equity
Sub's purchase of the Note pursuant to the Note Purchase Agreement.
H. The Fund is entering into an Equity Subscription Agreement
dated as of January 26, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Equity Subscription Agreement") with Equity Sub pursuant
to which the Fund commits to contribute up to $48,000,000 of additional cash
equity capital to Equity Sub.
<PAGE>
3
I. General Partner is willing to enter into the undertakings
provided in this letter, and the delivery of this letter by General Partner to
Lender is a condition to the effectiveness of the Note.
UNDERTAKING
1. General Partner hereby irrevocably and unconditionally
undertakes and agrees that (i) until such time as all amounts outstanding under
the Note are repaid in full and the Commitment (such term being used herein as
defined in the Note) is terminated, General Partner shall, as the general
partner of the Fund, reserve unfunded Capital Commitments in an amount equal to
at least $48,000,000 to permit General Partner to call upon such Capital
Commitments for the purpose of enabling the Fund to discharge its obligations
under the Equity Subscription Agreement; (ii) General Partner shall deliver one
or more Capital Demand Notices (such term being used herein as defined in the
Fund Partnership Agreement) in order to make calls upon the Capital Commitments
at such times and in such amounts, up to an aggregate amount not exceeding
$48,000,000, to the extent necessary to permit the Fund discharge its
obligations under the Equity Subscription Agreement; and (iii) General Partner
shall promptly take all actions necessary under the Fund Partnership Agreement
or otherwise to require the Limited Partners to make cash equity contributions
at such times and in such amounts to the Fund.
2. General Partner, as the general partner of Fund, shall use
the proceeds of such cash equity contributions to make equity contributions in
Equity Sub in the amount of such contributions as soon as practicable, but in
any event no later than two Business Days (such term being used herein as
defined in the Note) following the date upon which the Limited Partners are
required, under the terms of the Fund Partnership Agreement, to make such
contributions.
3. General Partner further agrees to deliver to Lender, at its
address specified in the Note or such other address as Lender may direct, (a) at
such time as delivered to the Limited Partners, (1) copies of all proposals to
be considered or acted upon by the Limited Partners pursuant to the provisions
of the Fund Partnership Agreement and (2) copies of all Capital Demand Notices
delivered to the Limited Partners in accordance with clause (ii) of paragraph 1
hereof and (b) immediately upon any officer of the undersigned obtaining
knowledge thereof, written notice of (1) any proposal by investors holding 10%
or more of the limited partnership interests in the Fund to replace General
Partner as the general partner of Fund or to terminate the Commitment Period
under the Partnership Agreement prior to November 13, 1998 and (2) the
occurrence of any event that could, with or without the consent of any or all of
the Limited Partners, result in the termination of the Commitment Period under
the Fund Partnership Agreement prior to November 13, 1998.
<PAGE>
4
4. General Partner covenants that it will not take any action
that could, with or without the consent of any or all of the Limited Partners,
result in the early termination of the Commitment Period.
5. All notices or demands by Lender and General Partner to one
another relating to this Agreement shall be in writing and either personally
served or sent by registered or certified mail, postage prepaid, return receipt
requested, or by prepaid telefacsimile, and shall be deemed to be given for
purposes of this Agreement on the day that such writing is received by the party
to whom it is sent. Unless otherwise specified in a notice sent or delivered in
accordance with the provisions of this section, such writing shall be sent to
such party, as applicable, at the following address:
If to General Partner: Stonington Partners, L.P.
c/o Stonington Partners, Inc.
767 Fifth Avenue
New York, New York 10153
Attn: Bradley J. Hoecker
Telecopy: (212) 339-8585
If to Lender: Bankers Trust Company
One Bankers Trust Plaza
14th Floor
New York, New York 10006
Attn: Mary Jo Jolly
Telecopy: (212) 250-1343
With a copy to: Bankers Trust Company
300 South Grand Avenue
41st Floor
Los Angeles, California 90071
Attn: Ms. Vicki Floyd
Telecopy: (213) 620-8484
6. THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
[Remainder of page intentionally left blank]
<PAGE>
5
In witness whereof, the undersigned, Stonington Partners, L.P., has caused this
letter to be executed and delivered by its duly authorized representative as of
the date first above written.
STONINGTON PARTNERS, L.P.
By: STONINGTON PARTNERS, INC. II,
its General Partner
By:
----------------------------------
Name:
Title:
