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EXHIBIT 4(i)
AMENDMENT NO. 6 TO NOTE PURCHASE AGREEMENT
This Amendment No. 6 to Note Purchase Agreement (this "Amendment") is
entered into as of March 31, 1998 by PIONEER-STANDARD ELECTRONICS, INC. (the
"Company") and TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA (the
"Noteholder").
PRELIMINARY STATEMENT.
1. WHEREAS, the Company and the Noteholder have entered into a Note
Purchase Agreement, dated as of October 31, 1990 (the "Original Purchase
Agreement"), pursuant to which, at a closing held on November 2, 1990, the
Noteholder purchased $20,000,000 in aggregate principal amount of the Company's
9.79% Senior Notes due November 1, 2000 (the "Notes"), which Original Purchase
Agreement has been amended by that certain Amendment No. 1 to Note Purchase
Agreement, dated as of November 1, 1991, that certain Amendment No. 2 to Note
Purchase Agreement, dated as of November 30, 1995, that certain Amendment No. 3
to Note Purchase Agreement, dated as of August 12, 1996, that certain Amendment
No. 4 to Note Purchase Agreement, dated as of March 23, 1998, and that certain
Amendment No. 5 to Note Purchase Agreement, dated as of March 23, 1998 (as so
amended, the "Purchase Agreement"). The Noteholder was the sole purchaser and
remains the sole record and beneficial owner of the Notes. Capitalized terms
used herein and not otherwise defined herein are used with the meanings assigned
thereto in the Purchase Agreement.
2. WHEREAS, the Company now owns one hundred percent (100%) of the
outstanding capital stock of Pioneer-Standard of Georgia, Inc., a Georgia
corporation ("Pioneer/Georgia"), and, as of the date of this Amendment,
Pioneer/Georgia will merge with and into Xxxxxxx Data Systems, Inc., a Georgia
corporation ("Xxxxxxx"), with the survivor of the Merger, Xxxxxxx, becoming the
wholly-owned subsidiary of the Company and being designated as a "Restricted
Subsidiary" under the Purchase Agreement.
3. WHEREAS, the Company has entered into that certain Credit Agreement
with certain lenders, including, without limitation, National City Bank, a
national banking association, as agent thereunder (the "Credit Agreement"),
pursuant to which the Company may borrow up to $260,000,000 in the aggregate.
4. WHEREAS, as of the date of this Amendment, the Company will enter
into that certain Agreement for Inventory Financing with IBM Credit Corporation,
a Delaware corporation ("IBM Credit"), pursuant to which IBM Credit will provide
interest-free financing for a period of up to seventy-five (75) days for the
purchase by the Company of certain inventory.
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5. WHEREAS, on the terms and subject to the conditions set forth in
this Amendment, and as an inducement to the Noteholder to consent to the
Company's acquisition of Xxxxxxx and certain other actions, the Company and the
Noteholder desire to amend the Purchase Agreement as set forth below.
NOW, THEREFORE, the Company and the Noteholder agree as follows:
SECTION 1. GENERAL REPRESENTATIONS AND WARRANTIES OF
THE COMPANY.
The Company hereby represents and warrants to the Noteholder as
follows:
SECTION 1.1. REPRESENTATIONS AND WARRANTIES IN PURCHASE
AGREEMENT. The representations and warranties with respect to the
Company contained in the Purchase Agreement are true and correct in
all material respects and the Noteholder shall be entitled to rely on
such representations and warranties as if they were made to the
Noteholder in this Amendment as of the date hereof.
SECTION 1.2. REPRESENTATIONS AND WARRANTIES IN CREDIT
AGREEMENT. The representations and warranties with respect to the
Company contained in the Credit Agreement and in any document,
certificate or instrument delivered pursuant to the Credit Agreement
are true and correct in all material respects and the Noteholder shall
be entitled to rely on such representations and warranties as if they
were made to the Noteholder in this Amendment as of the date hereof.
SECTION 1.3. REPRESENTATIONS AND WARRANTIES IN SUBORDINATION
AGREEMENT. The representations and warranties with respect to the
Company contained in the Subordination Agreement and in any document,
certificate or instrument delivered pursuant to the Subordination
Agreement are true and correct in all material respects and the
Noteholder shall be entitled to rely on such representations and
warranties as if they were made to the Noteholder in this Amendment as
of the date hereof.
SECTION 2. AMENDMENTS TO THE PURCHASE AGREEMENT.
The Purchase Agreement is hereby amended in the following respects:
SECTION 2.1. AMENDMENT TO SECTION 9.15 TO THE PURCHASE
AGREEMENT. Section 9.15 of the Purchase Agreement is hereby amended by
deleting it in its entirety and substituting the following new
Section 9.15 in lieu thereof:
SECTION 9.15 MERGER: SALE OF ASSETS. Neither the
Company nor any Restricted Subsidiary will enter into any
merger, consolidation, reorganization or liquidation or
transfer or otherwise dispose of all or a Substantial
Portion of its property or business, unless approved in
advance by the holders of at least 66-
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2/3% in aggregate principal amount of the Notes then outstanding;
provided, however, (i) any Restricted Subsidiary may merge into the
Company, (ii) any Restricted Subsidiary may merge into another
Restricted Subsidiary of which the Company owns, directly or
indirectly, the same percentage of outstanding stock, (iii) any
Restricted Subsidiary may transfer assets to another Restricted
Subsidiary of which the Company owns, directly or indirectly, the same
percentage of outstanding stock, and (iv) Pioneer/Georgia may enter
into the Xxxxxxx Merger.
SECTION 2.2. AMENDMENT TO SECTION 9.24 TO THE PURCHASE AGREEMENT.
Section 9.24 of the Purchase Agreement is hereby amended by deleting it in its
entirety and substituting the following new Section 9.24 in lieu thereof:
SECTION 9.24 INVESTMENT AND LOAN LIMIT. Neither the Company
nor any Restricted Subsidiary, together or individually, directly or
indirectly, in any instance or in the aggregate over time, may invest
in or loan to the following respective Subsidiaries, except as
provided in columns II and IV below:
Subsidiaries of Pioneer-Standard Electronics, Inc.
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Current
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Subsidiary Equity Investment Additional Current Loans Maximum
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(as of 12/31/97) Equity Investment (as of 12/31/97) Permitted Loans
---------------- ----------------- ---------------- ---------------
1. Pioneer-Standard of Maryland, Inc. $38,000,000 $1,000,000 $34,000,000 $60,000,000
2. Pioneer-Standard Canada Inc. $4,300,000 $6,000,000(1) $20,000,000 $35,000,000
3. Pioneer-Standard FSC, Inc. Less than -0- -0- $1,000,000
$100,000
4. Pioneer-Standard Illinois, Inc. $4,000,000 $1,000,000 -0- $10,000,000
5. Pioneer-Standard Minnesota, Inc. $12,000,000 $1,000,000 ($8,000,000) $10,000,000
6. Pioneer-Standard Electronics, Ltd. $144,000,000 $1,000,000 $7,000,000 $20,000,000
7. Pioneer Standard Georgia, Inc. $125,000,000 -0- -0- -0-
(Projected)(2)
8. Xxxxxxx Data Systems, Inc. $125,000,000 $15,000,000 -0- $85,000,000(4)
(Projected)(3)
9. Xxxxxxx Services Group, a $2,500,000 (5) $5,000,000 -0- $5,000,000
(1) Includes a $3,000,000 equity investment made in March, 1998.
(2) Projected amount of investment necessary to consummate anticipated merger
into Xxxxxxx Data Systems, Inc., effective March 31, 1998.
(3) Projected investment necessary to become a Subsidiary of Borrower,
effective March 31, 1998.
(4) Amount does not include that portion of Borrower's Indebtedness for
Borrowed Money under the Agreement for Inventory Financing which is
attributable to Xxxxxxx Data Systems, Inc.
(5) Investment necessary to become a Subsidiary of Borrower, effective
March 31, 1998.
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Pioneer-Standard Company, LLC
10. Pioneer-Standard Financial Trust $4,500,000(6) -0- -0- -0-
SECTION 2.3. ADDITION OF SECTION 9.26 TO THE PURCHASE AGREEMENT. The
following new Section 9.26 shall be added to the Purchase Agreement:
SECTION 9.26 EXECUTION OF NON-BORROWING AND NON-PLEDGE AGREEMENT. The
Company shall cause Xxxxxxx, immediately upon the effectiveness of the Xxxxxxx
Merger, to become a Restricted Subsidiary hereunder and to execute and deliver a
Non-Borrowing and Non-Pledge Agreement to the Noteholder.
SECTION 2.4. AMENDMENT TO SECTION 12.1 OF THE PURCHASE AGREEMENT.
Section 12.1 of the Purchase Agreement is hereby amended by deleting the
definition of "Indebtedness" in its entirety and substituting the following new
definition in lieu thereof:
The term "INDEBTEDNESS", with respect to any Person, shall
mean and include the aggregate amount of, without duplication: (a) all
obligations of such Person for borrowed money; (b) all obligations of
such Person evidenced by bonds, debentures, notes, or other similar
instruments; (c) all Capitalized Lease Obligations of such Person; (d)
all obligations or liabilities of others secured by a Lien on any
Asset owned by such Person, irrespective of whether such obligation or
liability is assumed, to the extent of the lesser of such obligation
or liability or the fair market value of such Asset; (e) all
obligations of such Person to pay the deferred purchase price of
Assets or services, exclusive of trade and other payables which, by
their terms, are due and payable within ninety (90) calendar days of
the creation thereof and are not overdue or are being properly and
expeditiously contested in good faith by appropriate proceedings, so
long as appropriate reserves have been established and the use by such
Person of any Assets involved has not been materially interfered with;
(f) any liability (whether contingent or not) in respect of unfunded
vested accrued benefits under any Pension Plan which is subject to
Title IV of ERISA; (g) all liabilities of such Person in respect of
letters of credit or instruments serving a similar function issued or
accepted for its account by banks and other financial institutions
(whether or not representing obligations for borrowed money); and (h)
any Guaranty of Indebtedness described in any of clauses (a) through
(g) above, including reimbursement obligations in respect of letters
of credit; provided, however, that Indebtedness shall not include any
Guaranty (i) by the Company of Indebtedness of a Restricted Subsidiary
or (ii) by a Restricted Subsidiary of Indebtedness of another
Restricted Subsidiary; and provided, further, that, for purposes of
any determination of whether Short-Term Indebtedness shall be
permitted under Section 9.17 hereof, or
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(6) Investment made on March 23, 1998
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whether Consolidated Funded Indebtedness shall be permitted under
Section 9.20 hereof, (i) no Guaranty shall be treated as
Indebtedness to the extent that the obligation guaranteed thereby
is Indebtedness, (ii) the obligations of the Company to make
payments of principal and interest on the Convertible Debentures
shall not be treated as Indebtedness, and (iii) the obligations of
the Company owing to IBM Credit Corporation under the Agreement for
Inventory Financing shall not be treated as Indebtedness to the
extent that any such obligations are, by their terms, not due and
owing for at least forty-five (45) days, but in no event more than
seventy-five (75) days, after the date of invoice therefor and are
not otherwise interest-bearing; and, provided, further, that
Indebtedness shall not include any Guaranty by the Company or a
Restricted Subsidiary of the Indebtedness of another Person if (i)
treating such Guaranty as Indebtedness would result in a violation of
Section 9.20 hereof at the time the Company or such Restricted
Subsidiary becomes liable therefor, (ii) the Company elects (and
evidences such election by prompt written notice thereof to each
holder of a Note) to treat such Guaranty as a Restricted Investment
and (iii) treated as a Restricted Investment, the incurrence of such
Guaranty can be effected in compliance with Section 9.19 hereof.
SECTION 2.5. AMENDMENT TO SECTION 12.1 TO THE PURCHASE AGREEMENT.
Section 12.1 of the Purchase Agreement is hereby amended by deleting the
definition of "Credit Agreement" in its entirety and substituting the following
new definition in lieu thereof:
The term "CREDIT AGREEMENT" shall mean that certain Credit
Agreement among the Company and certain Lenders, including, without
limitation, National City Bank, a national banking association, as
agent thereunder, pursuant to which the Company may borrow up to
$260,000,000 in the aggregate.
SECTION 2.6. AMENDMENT TO SECTION 12.1 TO THE PURCHASE AGREEMENT.
Section 12.1 of the Purchase Agreement is hereby further amended by deleting
the definition of "Subordination Agreement" in its entirety and substituting the
following new definition in lieu thereof:
The term "SUBORDINATION AGREEMENT" shall mean that certain
Subordination Agreement dated as of March 27, 1998, among Limited
Partnership, the Company, certain Lenders, National City Bank, as
agent for such Lenders, the Noteholder and Star Bank, N.A., as trustee
with respect to a debt offering of the Company, and executed effective
as of March 31, 1998, by the Noteholder.
SECTION 2.7. FURTHER AMENDMENT TO SECTION 12.1 OF THE PURCHASE
AGREEMENT. The following definitions are hereby added to Section 12.1 of the
Purchase Agreement, to be inserted therein in the appropriate alphabetical
order:
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The term "AGREEMENT FOR INVENTORY FINANCING" shall mean the
Agreement for Inventory Financing, dated as of March 31, 1998, by and
between IBM Credit Corporation and the Company as in effect on such
date without any amendment thereof.
The term "AMENDMENT NO. 6" shall mean Amendment No. 6 to
Note Purchase Agreement dated as of March 31, 1998 between the Company
and the Noteholder.
The term "XXXXXXX" shall mean Xxxxxxx Data Systems, Inc., a
Georgia corporation.
The term "XXXXXXX MERGER" shall mean the merger whereby
Pioneer/Georgia will acquire Xxxxxxx via a reverse cash-out merger
with Xxxxxxx being the survivor.
The term "PIONEER/GEORGIA" shall mean Pioneer-Standard of
Georgia, Inc. a Georgia corporation.
SECTION 3. CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT.
This Amendment shall not be effective unless and until each party
hereto shall have executed and delivered an original counterpart hereof and the
following conditions shall have been satisfied or waived:
SECTION 3.1. OPINIONS OF COUNSEL FOR THE COMPANY. The Noteholder and
its special counsel shall have received from Xxxxxx, Halter & Xxxxxxxx,
Cleveland, Ohio, special counsel for the Company, an opinion, dated the date
hereof, in form and substance satisfactory to the Noteholder and its special
counsel, relating to the due authorization, execution and delivery by the
Company of this Amendment and the enforceability against the Company of this
Amendment, in accordance with its terms.
SECTION 3.2. SUBORDINATION AGREEMENT. The Subordination Agreement and
all other agreements, documents, certificates or instruments delivered in
connection therewith shall have been reduced to writing and furnished to the
Noteholder and its special counsel, and the Subordination Agreement and such
other agreements, documents, certificates and instruments (collectively,
"Documents") shall be in form and substance satisfactory to the Noteholder and
its special counsel. The Noteholder and its special counsel shall have received
from Xxxxxx, Halter & Xxxxxxxx, Cleveland, Ohio, special counsel for the
Company, an opinion, dated the date hereof, in form and substance satisfactory
to the Noteholder and its special counsel, relating to the due authorization,
execution and delivery by the Company and Pioneer LP of the Subordination
Agreement and the enforceability thereof in accordance with its terms. The
Noteholder shall also have received an Officer's Certificate of the Company
certifying that attached thereto are
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true, correct and complete copies of a fully executed Subordination Agreement
and such other Documents, that such Documents constitute the only other
agreements between such parties relating to the transactions contemplated by the
Subordination Agreement, and that the Subordination Agreement and each other
Document is in full force and effect without any term or condition thereof
having been amended, modified or waived.
SECTION 3.3. AMENDMENT FEE. In consideration for its agreement to
enter into this Amendment, the Noteholder shall have received a payment in
immediately available funds in the amount of Twenty-one Thousand Four Hundred
Dollars ($21,400).
SECTION 3.3. COUNSEL FEES. The Company shall have paid the reasonable
fees and disbursements of the Noteholder's special counsel, Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP in accordance with a statement of such counsel rendered to the
Company (with the understanding that a supplemental statement for reasonable
fees and disbursements subsequently incurred is to be rendered at a later date).
SECTION 4. MISCELLANEOUS.
SECTION 4.1. NO CONSENT, NO WAIVER. Notwithstanding the execution by
the Company of an Intercreditor Agreement dated as of March 31, 1998, by and
between National City Bank (for itself and as agent for other lending
institutions) and IBM Credit Corporation, and acknowledged and consented to by
the Company (the "Intercreditor Agreement"), the provisions of the Intercreditor
Agreement and the execution by the Noteholder of this Amendment No. 6 shall not
constitute the Noteholder' 5 consent to the Intercreditor Agreement nor a waiver
by the Noteholder of any of the Company's covenants contained in Section 9 of
the Purchase Agreement.
SECTION 4.2. CROSS-REFERENCES. References in this Amendment to any
Section (or "Section") are, unless otherwise specified, to such Section (or
"Section") of this Amendment.
SECTION 4.3. INSTRUMENT PURSUANT TO PURCHASE AGREEMENT. This Amendment
is executed pursuant to Section 13.4 of the Purchase Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with all of the terms and provisions of the Purchase Agreement.
Except as expressly amended hereby, all of the representations, warranties,
terms, covenants and conditions of the Purchase Agreement and the Notes shall
remain unamended and unwaived. The amendments set forth herein shall be limited
precisely as provided for herein to the provisions expressly amended herein and
shall not be deemed to be a waiver of, amendment of, consent to or modification
of any other term or provision of the Purchase Agreement or the Notes or of any
term or provision of any other document or of any transaction or further action
on the part of the Company which would require the consent of any Noteholder
under the Purchase Agreement.
SECTION 4.4. SUCCESSORS AND ASSIGNS. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
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SECTION 4.5. COUNTERPARTS. This Amendment may be executed
simultaneously in two or more counterparts, each of which shall be deemed to be
an original but all of which shall constitute together but one and the same
instrument.
SECTION 4.6. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the law of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers duly authorized thereunto as of the
date and year first above written.
PIONEER-STANDARD ELECTRONICS, INC.
By: /s/ Xxxx X. Xxxxxxx
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Title: Vice President, Treasurer and
Assistant Secretary
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Authorized Officer
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