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Exhibit 10(L)
THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER
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THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "Amendment")
is made as of May 5, 2000, by and among Pioneer-Standard Electronics, Inc., an
Ohio corporation, and its successors and assigns (the "Borrower"), National City
Bank, a national banking association, and the several banks, financial
institutions and other entities from time to time parties to the Credit
Agreement (as defined below) (sometimes collectively, "Lenders" and sometimes
individually, a "Lender"), and National City Bank, not individually, but as
"Agent." Capitalized terms used herein, and not otherwise defined herein, shall
have the meaning ascribed to those terms in the Credit Agreement (as defined
herein).
WHEREAS, Borrower, the Lenders and Agent entered into that certain
Credit Agreement dated as of March 27, 1998, as amended by that certain First
Amendment to Credit Agreement, dated as of May 1, 1998, and that certain Second
Amendment to Credit Agreement, dated as of March 31, 1999 (collectively, the
"Original Credit Agreement");
WHEREAS, Borrower, the Lenders and Agent are desirous of amending the
Original Credit Agreement on the terms and conditions hereinafter set forth; and
WHEREAS, the Original Credit Agreement as modified by this Amendment
shall hereafter be the "Credit Agreement."
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Borrower, the Lenders and Agent agree as follows:
1. The following definitions shall be inserted in Article I of the
Credit Agreement each in the appropriate alphabetical sequence:
"Agreement for Wholesale Financing" means that certain Agreement for
Wholesale Financing, dated as of November 7, 1995, by and between Borrower and
DFS.
"DFS" means Deutsche Financial Services Corporation.
2. The definition of Consolidated Debt Service shall be deleted in its
entirety and the following inserted in lieu thereof:
"Consolidated Debt Service" means, for any period, (a) Consolidated
Interest Expense for such period PLUS (b) the aggregate amount of scheduled
principal payments of Indebtedness (excluding any unaccelerated Indebtedness
arising under this Facility, the Convertible Debentures, the Agreement for
Inventory Financing and the Agreement for Wholesale Financing) required to be
made during such period by Borrower or any of its Subsidiaries.
3. The definition of Consolidated Funded Debt shall be deleted in its
entirety and the following inserted in lieu thereof:
"Consolidated Funded Debt" means as of any date of determination, all
Indebtedness for Borrowed Money of Borrower and its Subsidiaries outstanding at
such date
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(excluding Indebtedness arising under the Agreement for Inventory Financing, the
Agreement for Wholesale Financing and the Convertible Debentures), determined on
a consolidated basis in accordance with GAAP.
4. The definition of Indebtedness for Borrowed Money shall be deleted
in its entirety and the following inserted in lieu thereof:
"Indebtedness for Borrowed Money" means at any time, all Indebtedness
required by GAAP to be reflected as such on Borrower's balance sheet, including
as appropriate, all Indebtedness (i) in respect of any money borrowed (including
pursuant to this Agreement and debt incurred pursuant to or evidenced by the
Convertible Debentures or the Preferred Securities); (ii) under or in respect of
any Contingent Obligation (whether direct or indirect) of any money borrowed;
(iii) evidenced by any loan or credit agreement, promissory note, debenture,
bond, guaranty or other similar written obligation to pay money; (iv) arising
under the Agreement for Inventory Financing; (v) arising under the Agreement for
Wholesale Financing; and (vi) arising under Capitalized Leases.
5. Section 2.4 of the Credit Agreement shall be deleted in its entirety
and the following inserted in lieu thereof:
2.4 APPLICABLE MARGINS. On the Closing Date, the Applicable Margin
shall be determined using Tier I of the performance grid below until June 30,
1998. Thereafter, the Base Rate Applicable Margin and LIBOR Applicable Margin
shall be adjusted on the first day of each calendar quarter, beginning July 1,
1998, and on each October 1, January 1, April 1, and July 1, thereafter, based
on the ratio of Consolidated Funded Debt plus Indebtedness for Borrowed Money
arising under the Agreement for Inventory Financing and the Agreement for
Wholesale Financing as of the end of the quarter ending on March 31, 1998, and
on each June 30, September 30, December 31, and March 31, thereafter, to
Consolidated EBITDA for the most recent preceding four (4) fiscal quarters,
including the fiscal quarter ending on the date of determination. To the extent
that, as of an adjustment date, Borrower has not provided to Agent information
necessary to apply the performance grid, interest shall be payable retroactively
upon receipt of such information and calculation by Agent. In such event,
Borrower shall continue to pay interest at the interest rate and on the Payment
Dates in effect for the preceding quarter and the parties shall adjust for the
difference between interest payable and interest actually paid, when information
to apply the performance grid is available.
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<TABLE>
<CAPTION>
==========================================================================================
Tier Consolidated Funded Debt LIBOR + Base Facility Fee
plus Indebtedness for Rate
Borrowed Money arising
under the Agreement for
Inventory Financing and the
Agreement for Wholesale
Financing/EBITDA
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<S> <C> <C> <C> <C>
Tier I Greater than 3.50x 112.5 bps* 0 bps 37.5
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Tier II Less than or equal to 3.50x 100.0 bps 0 bps 37.5
but greater than 3.25x
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Tier III Less than or equal to 3.25x 87.5 bps 0 bps 37.5
but greater than 3.00x
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Tier IV Less than or equal to 3.00x 75 bps 0 bps 37.5
but greater than 2.75x
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Tier V. Less than or equal to 2.75x 62.5 bps 0 bps 37.5
but greater than 2.50x
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Tier VI Less than or equal to 2.50x 62.5 bps 0 bps 25
but greater than 2.25x
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Tier VII Less than 2.25x 50.0 bps 0 bps 25
==========================================================================================
</TABLE>
* bps = basis points
Notwithstanding anything contained in this Agreement to the contrary,
if at any time, or from time to time, Borrower is required to pay interest to
IBM Credit Corporation pursuant to the Agreement for Inventory Financing or DFS
pursuant to the Agreement for Wholesale Financing, then, during such period that
Borrower is required to pay such interest to IBM Credit Corporation or DFS, as
the case may be, the rate of interest to be paid on all outstanding Loans
hereunder will be equal to the greater of (i) the rate as determined pursuant to
this Agreement, and (ii) the rate of interest the Borrower is required to pay
IBM Credit Corporation or DFS, as applicable.
6. Section 5.17 of the Credit Agreement shall be deleted in its
entirety and the following inserted in lieu thereof:
5.17 ADDITIONAL INDEBTEDNESS AND FINANCIAL UNDERTAKINGS. Borrower will
not enter into or remain liable upon, any Financial Undertaking, nor will
Borrower incur Indebtedness for Borrowed Money. The prohibition in the preceding
sentence shall not apply to Indebtedness for Borrowed Money which is incurred
under or in connection with (a) this Agreement, (b) the Agreement for Inventory
Financing, provided that such Indebtedness which is incurred under the Agreement
for Inventory Financing shall not exceed $150,000,000, (c) the
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Convertible Debentures, (d) Indebtedness for Borrowed Money shown in Borrower's
December 31, 1997, financial statements, (e) Hedge Agreements that in the
aggregate, at any time, do not create an Aggregate Measured Credit Risk in
excess of $7,500,000), or (f) the Agreement for Wholesale Financing, provided
that such Indebtedness which is incurred under the Agreement for Wholesale
Financing shall not exceed $30,000,000. Borrower will not permit any of its
Subsidiaries to enter into or remain liable upon, any Financial Undertaking, nor
will Borrower permit any of its Subsidiaries to incur Indebtedness for Borrowed
Money (other than loans made by Borrower that do not exceed the amounts set
forth on Schedule 3 attached hereto).
7. Section 5.33 of the Credit Agreement shall be deleted in its
entirety and the following inserted in lieu thereof:
5.33 INVENTORY FINANCE LIMITATION. Borrower and its Subsidiaries shall
have a ratio of Consolidated Funded Debt plus Indebtedness for Borrowed Money
arising under the Agreement for Inventory Financing and the Agreement for
Wholesale Financing to Consolidated EBITDA of no greater than 4.75 to 1.0 on the
Closing Date, and on the last calendar day of each fiscal quarter thereafter,
until December 31, 1999; and no greater than 4.50 to 1.00 on the last calendar
day of each fiscal quarter thereafter, until December 31, 2000; and no greater
than 4.00 to 1.00 on the last calendar day of each fiscal quarter thereafter,
until December 31, 2001; and no greater than 3.75 to 1.0 on the last calendar
day of each fiscal quarter thereafter, until the Facility Termination Date. The
ratio of Consolidated Funded Debt plus Indebtedness for Borrowed Money arising
under the Agreement for Inventory Financing and the Agreement for Wholesale
Financing to Consolidated EBITDA shall be calculated for the most recent
preceding four fiscal quarters, including the fiscal quarter ending on the date
of determination and shall exclude any debt relating to the Convertible
Debentures or the securities sold pursuant to the Preferred Securities Offering.
8. The following Sections shall be added to Article V of the Credit
Agreement:
5.35 AGREEMENT FOR WHOLESALE FINANCING. As of the date hereof, and at
all times thereafter, Borrower shall perform and observe in all material
respects each term, covenant, and condition of the Agreement for Wholesale
Financing.
5.36 LIENS TO DFS. In the event that Borrower or any Subsidiary
grants any Lien or security interest in favor of DFS, then Borrower and each
Subsidiary will grant a Lien in favor of Lenders on all of their assets, and
will deliver to Agent all documents, stock certificates, security agreements,
pledges, financing statements and other instruments or documents deemed
necessary or advisable by Agent to fulfill the requirements of this Section.
Without limiting Borrower's obligations under this Section, Borrower hereby
appoints Agent as its attorney-in-fact with irrevocable authority to execute
and deliver on behalf of Borrower, at any time after Borrower grants a Lien or
security interest in favor of DFS, all documents, stock certificates, security
agreements, pledges, financing statements and other instruments or documents
deemed necessary or advisable by Agent to fulfill the requirements of this
Section.
5.37 AMENDMENTS TO THE AGREEMENT FOR WHOLESALE FINANCING.
Notwithstanding anything in this Agreement or the Agreement for Wholesale
Financing to the
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contrary, Borrower shall not amend or modify the Agreement for Wholesale
Financing without the prior written approval of the Required Lenders.
9. Section 6.6 of the Credit Agreement shall be deleted in its entirety
and the following inserted in lieu thereof:
6.6 DEFAULTS ON INDEBTEDNESS. Failure of Borrower or any of its
Subsidiaries to pay any of its respective Indebtedness when due; or the default
by Borrower or any of its Subsidiaries in the performance of any term, provision
or condition contained in any agreement, or any other event shall occur or
condition exist which causes or permits any Indebtedness of Borrower or any of
its Subsidiaries to be due and payable or required to be prepaid (other than by
a regularly scheduled payment) prior to the stated maturity thereof, including,
without limitation, any default with respect to Indebtedness arising under the
Agreement for Wholesale Financing; provided, however, that it shall not be a
default under this SECTION 6.6 if (i) Borrower shall be in default with respect
to Indebtedness arising from Indebtedness other than Indebtedness for Borrowed
Money in an aggregate amount not exceeding Five Million Dollars ($5,000,000),
(ii) Borrower fails to pay the interest payable on the Convertible Debentures,
to the extent that such interest is deferable by the terms of the Convertible
Debentures, or (iii) Borrower shall be in default with respect to Indebtedness
arising under the Agreement for Inventory Financing; provided that if such
default causes any Indebtedness of Borrower or any of its Subsidiaries to be due
and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the stated maturity, then such default shall constitute a
default hereunder.
10. Subject to Section 12 of this Amendment, the Lenders hereby waive
any default under the Credit Agreement for failure of Borrower to disclose the
existence of the Agreement for Wholesale Financing and the Indebtedness arising
thereunder, including but not limited to, defaults as a result of Borrower's
failure to satisfy the covenants described in Sections 4.9 (Accuracy of
Information), 5.17 (Additional Indebtedness and Financial Undertakings), 5.22
(Ratio of Debt to Cash Flow), 5.23 (Consolidated Fixed Charge Coverage Ratio),
5.24 (Current Ratio), 5.33 (Inventory Finance Limitation) and 6.4
(Representations and Warranties) for each period ending prior to the date
hereof.
11. It shall be a condition precedent to the effectiveness of this
Amendment that Borrower shall furnished to Agent a true, correct and complete
copy of the Agreement for Wholesale Financing.
12. Simultaneously with the execution hereof, Borrower shall pay to
Agent, for the account of the Lenders, all interest accrued under Section 2.4 of
the Credit Agreement from and after March 27, 1998, to and including the date
hereof, that remains unpaid because of the failure to include Indebtedness
existing pursuant to the Wholesale Financing Agreement in the calculations under
such Section. Borrower represents and warrants to Lenders that (a) the
calculations set forth on Exhibit A to this Amendment show the calculation of
the ratio of Consolidated Funded Debt (which shall include Indebtedness under
the Agreement for Wholesale Financing) plus Indebtedness for Borrowed Money
under the Agreement for
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Inventory Financing to Consolidated EBITDA for all fiscal quarters of Borrower
from and after March 27, 1998, and (b) the calculations on Exhibit A are true,
correct and complete.
13. Borrower agrees that is shall terminate the Agreement for Wholesale
Financing prior to the date that is six (6) months from the date hereof. Failure
to satisfy this Section 13 shall be an Event of Default under the Credit
Agreement.
14. This Amendment shall be deemed to form a part of and shall be
construed in connection with and as part of the Credit Agreement. Except as
hereinbefore expressly amended, all of the other terms, covenants and conditions
contained in the Credit Agreement shall continue to remain unchanged and in full
force and effect and are hereby ratified and confirmed.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers.
PIONEER-STANDARD ELECTRONICS, INC.
By:
----------------------------------
Print Name:
Title:
NATIONAL CITY BANK,
Individually and as Agent
By:
----------------------------------
Print Name: Anthony J. DiMare
Title: Senior Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Brendan A. Lawlor
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Print Name: Brendan Lawlor
Title: Vice President
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MELLON BANK, N.A.
By: /s/ Charles H. Staub
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Print Name: Charles H. Staub
Title: First Vice President
FIRSTAR BANK, N.A.
By:
-----------------------------------
Print Name: John Barrett
Title: Senior Vice President
FIRSTAR BANK, N.A.
By:
----------------------------------
Print Name: Joseph Sooter
Title: Vice President
FIRST CHICAGO NBD
By:
----------------------------------
Print Name: Paul R. DeMelo
Title: Vice President
COMERICA BANK
By:
----------------------------------
Print Name: Jeffrey J. Judge
Title: Vice President
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MELLON BANK, N.A.
By:
----------------------------------
Print Name: Mark Johnston
Title: Vice President
FIRSTAR BANK, N.A.
By: /s/ John D. Barrett
----------------------------------
Print Name: John Barrett
Title: Senior Vice President
FIRSTAR BANK, N.A.
By:
----------------------------------
Print Name: Joseph Sooter
Title: Vice President
FIRST CHICAGO NBD
By:
----------------------------------
Print Name: Paul R. DeMelo
Title: Vice President
COMERICA BANK
By:
----------------------------------
Print Name: Jeffrey J. Judge
Title: Vice President
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MELLON BANK, N.A.
By:
----------------------------------
Print Name: Mark Johnston
Title: Vice President
FIRSTAR BANK, N.A.
By:
----------------------------------
Print Name: John Barrett
Title: Senior Vice President
FIRSTAR BANK, N.A.
By: /s/ Joseph L. Sooter, Jr.
----------------------------------
Print Name: Joseph Sooter
Title: Vice President
FIRST CHICAGO NBD
By:
----------------------------------
Print Name: Paul R. DeMelo
Title: Vice President
COMERICA BANK
By:
----------------------------------
Print Name: Jeffrey J. Judge
Title: Vice President
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MELLON BANK, N.A.
By:
----------------------------------
Print Name: Mark Johnston
Title: Vice President
FIRSTAR BANK, N.A.
By:
----------------------------------
Print Name: John Barrett
Title: Senior Vice President
FIRSTAR BANK, N.A.
By:
----------------------------------
Print Name: Joseph Sooter
Title: Vice President
FIRST CHICAGO NBD
By: /s/ Paul R. DeMelo
----------------------------------
Print Name: Paul R. DeMelo
Title: Vice President
COMERICA BANK
By:
----------------------------------
Print Name: Jeffrey J. Judge
Title: Vice President
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MELLON BANK, N.A.
By:
----------------------------------
Print Name: Mark Johnston
Title: Vice President
FIRSTAR BANK, N.A.
By:
----------------------------------
Print Name: John Barrett
Title: Senior Vice President
FIRSTAR BANK, N.A.
By:
----------------------------------
Print Name: Joseph Sooter
Title: Vice President
FIRST CHICAGO NBD
By:
----------------------------------
Print Name: Paul R. DeMelo
Title: Vice President
COMERICA BANK
By: /s/ Jeffrey J. Judge
----------------------------------
Print Name: Jeffrey J. Judge
Title: Vice President
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ABN-AMRO BANK, N.V.
By: /s/ Richard R. DaCosta
----------------------------------
Print Name: Richard R. DaCosta
Title: Vice President
By: /s/ Christopher L. Snider
----------------------------------
Print Name: Christopher L. Snider
Title: Assistant Vice President
THE BANK OF NEW YORK
By:
----------------------------------
Print Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
----------------------------------
Print Name:
Title:
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ABN-AMRO BANK N.Y.
By:
----------------------------------
Print Name: Lee-Lee Miao
Title: Group Vice President
THE BANK OF NEW YORK
By: /s/ David C. Judge
----------------------------------
Print Name: David C. Judge
Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A.
By:
----------------------------------
Print Name: Michael Piken
Title: Vice President
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ABN-AMRO BANK N.Y.
By:
----------------------------------
Print Name: Lee-Lee Miao
Title: Group Vice President
THE BANK OF NEW YORK
By:
----------------------------------
Print Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Michael Piken
----------------------------------
Print Name: Michael Piken
Title: Vice President
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