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EXHIBIT 10(k)
SECOND AMENDMENT TO CREDIT AGREEMENT
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THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
is made as of March 31, 1999, 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 (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. Section 5.14(c) of the Original Credit Agreement is hereby
deleted in its entirety and the following substituted in lieu thereof:
(c) Investments in (i) Eurodis Electron PLC (in an amount not
to exceed a value of $7,433,463) and World Peace Industrial Co. Ltd. (in an
amount not to exceed a value of $6,531,259) and (ii) Eurodis Electron PLC (in
excess of a value of $7,433,463), World Peace Industrial Co. Ltd. (in excess of
a value of $6,531,259) and other Persons not to exceed, in the aggregate, at any
time, a value of $35,000,000; provided that any Investment permitted under this
Section 5.14(c) may only consist of Investments in Persons in the business of
the manufacturing or the distributing of industrial and consumer electronic
products or related consulting or support services.
2. Subsection 5.15(v) of the Original Credit Agreement is
hereby deleted in its entirety and the following substituted in lieu thereof:
(v) any lease other than any Capitalized Lease (it being
agreed that a Capitalized Lease is a lien rather than a lease for the purposes
of this Agreement) so long as the aggregate annual rentals of all such leases do
not exceed Fifteen Million Dollars ($15,000,000) on a consolidated basis.
3. Section 5.21(a) of the Original Credit Agreement is hereby
deleted in its entirety and the following substituted in lieu thereof:
5.21 RATIO OF EBIT TO INTEREST. (a) Borrower and its
Subsidiaries shall have a ratio of Consolidated EBIT to Consolidated Interest
Expense of no less than 3.0 to 1.0 on the Closing Date, and on the last calendar
day of each fiscal quarter thereafter, until December 31, 2000. Thereafter, on
the last calendar day of each fiscal quarter until and including the Facility
Termination Date, Borrower and its Subsidiaries shall have a ratio of
Consolidated EBIT to Consolidated Interest Expense of no less than 3.50
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to 1.0. The ratio of Consolidated EBIT to Consolidated Interest Expense shall be
calculated for the most recent preceding four fiscal quarters, including the
fiscal quarter ending on the date of determination.
4. Section 5.22 of the Original Credit Agreement is hereby
deleted in its entirety and the following substituted in lieu thereof:
5.22 RATIO OF DEBT TO EBITDA. Borrower and its Subsidiaries
shall have a ratio of Consolidated Funded Debt to Consolidated EBITDA of no
greater than 3.75 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
3.50 to 1.00 on the last calendar day of each fiscal quarter thereafter, until
December 31, 2000; and no greater than 3.00 to 1.00 on the last calendar day of
each fiscal quarter thereafter, until December 31, 2001; and no greater than
2.75 to 1.0 on the last calendar day of each fiscal quarter thereafter, until
the Facility Termination Date. The ratio of Consolidated Funded Debt 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.
5. Section 5.33 of the Original Credit Agreement is hereby
deleted in its entirety and the following substituted 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 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 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.
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: /s/ XXXX X. XXXXXXX
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Print Name: Xxxx X. Xxxxxxx
Title: Vice President
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NATIONAL CITY BANK,
Individually and as Agent
By: /s/ Xxxxxxx X. XxXxxx
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Print Name: Xxxxxxx X. XxXxxx
Title: Senior Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx
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Print Name: Xxxxxxx Xxxxxx
Title: Vice President
MELLON BANK, N.A.
By: /s/ Xxxx Xxxxxxxx
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Print Name: Xxxx Xxxxxxxx
Title: Vice President
FIRSTAR BANK, N.A.
By: /s/ Xxxx X. Xxxxxxx
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Print Name: Xxxx Xxxxxxx
Title: Vice President
NBD BANK
By: /s/ Xxxx X. XxXxxx
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Print Name: Xxxx X. XxXxxx
Title: Vice President
COMERICA BANK
By: /s/ Xxxxxxx X. Judge
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Print Name: Xxxxxxx X. Judge
Title: Vice President
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ABN - AMRO BANK N.V.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
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Print Name: Xxxxx Xxxxxxx
Title: Vice President
By: /s/ Xxxxx X. XxXxxxxx, Xx.
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Print Name: Xxxxx X. XxXxxxxx, Xx.
Title: Vice President
MERCANTILE BANK
By: /s/ Xxxxxxx X. Xxxxxxx
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Print Name: Xxx Xxxxxxx
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. Xxxxx
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Print Name: Xxxxxx Xxxxx
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By:
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Print Name: Xxxxxxx Xxxxx
Title: Vice President
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