EXHIBIT 10A
EXECUTION VERSION
SEVENTH AMENDMENT TO CREDIT AGREEMENT
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of January 30, 2003, is entered into by and among AVNET, INC., a New York
corporation ("Avnet"), the lenders party to the Credit Agreement referred to
below (each a "Lender" and, collectively, the "Lenders") and BANK OF AMERICA,
N.A., as administrative agent for itself and the other Lenders (in such
capacity, the "Administrative Agent").
RECITALS
A. Avnet, the Lenders and the Administrative Agent are parties to
that certain Credit Agreement (Multi-Year) dated as of October 25, 2001, as
amended or modified by that First Amendment to Credit Agreement (Multi-Year)
dated as of March 29, 2002, that Second Amendment to Credit Agreement
(Multi-Year) dated as of October 10, 2002, that certain letter agreement dated
as of November 8, 2002, that Third Amendment to Credit Agreement dated as of
November 23, 2002, that Fourth Amendment to Credit Agreement dated as of
December 9, 2002, that Fifth Amendment to Credit Agreement dated as of December
12, 2002, and that Sixth Amendment to Credit Agreement dated as of December 13,
2002 (as so amended or modified, the "Credit Agreement"), pursuant to which the
Administrative Agent and the Lenders have extended certain credit facilities to
Avnet and certain of its Subsidiaries.
A. Avnet has requested that the Administrative Agent and the
Lenders agree to certain amendments of the Credit Agreement.
A. The Administrative Agent and the Lenders are willing to
amend the Credit Agreement subject to the terms and conditions of this
Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings, if any, assigned to such terms in the
Credit Agreement as amended hereby.
1. Amendments to Credit Agreement. The Credit Agreement shall be
amended, effective as of the Effective Date, as follows:
(a) At Section 1.01, the defined term "Total Free Liquid
Assets" shall be amended by deleting the word "and" before clause (c) and adding
a new subsection (d) as follows:
"and (d) Permitted Investments made with the Net Proceeds of a
Permitted Capital Markets Transaction to the extent subject to
the Substantive Defeasement of any Capital Markets Notes
having original stated maturities in year 2003 in accordance
with Section 6.18"
(a) At Section 1.01, the following defined terms shall be
amended and restated in their entirety as follows:
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"Permitted Debt" means Debt of Avnet arising under or
in connection with any Capital Markets Notes issued by Avnet
after the Second Amendment Date, provided that: (a) such Debt
has an original stated maturity of not less than three years,
and no amortization of principal, including pursuant to any
sinking fund arrangement; (b) such Debt provides no right of
Mandatory Redemption, other than (i) one solely exercisable
more than three years after the date of issuance, or (ii)
arising solely upon a change of control event relating to
Avnet that would constitute a Change of Control, or (iii) one
arising solely upon certain asset sales, provided that the
terms of such Debt allow Avnet to repay any and all
Obligations prior to such Mandatory Redemption; (c) no
instrument or agreement evidencing such Debt contains any
maintenance-based debt covenants, nor any covenants or events
of default that are more restrictive than may be customary at
the time of issuance for non-investment grade rated public
debt offerings, nor contain a Third Party Negative Pledge
other than as expressly permitted by Section 6.20; (d) such
Debt shall not be convertible or exchangeable into other Debt
that is not itself Permitted Debt; (e) such Debt is not
guaranteed, on the date such Debt is issued, by (nor, on the
date such Debt is issued, subject to any agreement to provide
any guaranty by) any Subsidiary of Avnet, other than
Subsidiaries that on or before the date such guaranty is
executed in favor of the holder of such Debt are required by
the terms of this Agreement to execute and deliver to the
Administrative Agent a Guaranty Agreement pursuant to Section
6.13(b); and (such Debt is not entitled to the benefit of any
Lien, other than the right to share equally and ratably in
certain Liens granted to third parties (other than the Lender
Liens) on substantially the same terms as contained in the
2008 Senior Note Indenture.
"Substantive Defeasement" means, in respect of any
outstanding Debt represented by Capital Markets Notes, that
Avnet has irrevocably deposited funds with a bank, pursuant to
an escrow or trust arrangement for the exclusive benefit of
the holders of such Notes (or their trustee or agent), or
otherwise in accordance with any express defeasance terms
specified in the indenture governing such Capital Markets
Notes, for the sole purpose of repaying such Notes, together
with interest thereon in the amount anticipated to accrue up
to the date of final payment.
(b) Section 1.01 shall be further amended by inserting
the following new defined terms in the proper alphabetical order:
"Excess Amount" has the meaning set forth in Section
2.06(b)(ii).
"Preliminary Prospectus" has the meaning set forth in
the definition of the "2008 Senior Notes."
"2008 Senior Note Indenture" means the terms of the
October 2000 Indenture relating to the terms of the 2008
Senior Notes (including
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any resolutions or officer's certificates relating to the
terms of the 2008 Senior Notes).
"2008 Senior Notes" means Senior Notes (including
convertible Senior Notes) to be issued by Avnet and described
more particularly in that preliminary prospectus dated January
27, 2003 (the "Preliminary Prospectus") (provided that the
terms thereof shall contain no material changes from the terms
thereof described in the Preliminary Prospectus, unless
approved by the Required Lenders), and any senior or senior
subordinated notes issued pursuant to any supplemental or
additional prospectus or offering circular issued in
connection with the issuance of Capital Markets Notes on or
before February 14, 2003, which are convertible into Avnet's
common stock, having substantially the same or less
restrictive terms as to covenants, events of default and other
material provisions (other than convertibility, tenor and
interest rate) as contained in the Preliminary Prospectus.
(c) Section 2.06(b) shall be amended by:
(i) Inserting the clause number "(i)" before the
beginning of the first sentence thereof; and
(ii) Inserting a new clause (ii) at the end
thereof as follows:
"(ii) If on the date 350 days after the
consummation of a transaction giving rise to an
"Asset Sale Amount" (as defined in the 2008 Senior
Note Indenture), Avnet shall not have applied an
amount equal to such Asset Sale Amount by:
(A) Investing or committing to
invest (and in fact so investing within an
additional 90 days) in "Related Business
Assets" (as defined in the 2008 Senior Note
Indenture) and property (except in
connection with the acquisition of a wholly
owned Subsidiary in a "Related Business" (as
defined in the 2008 Senior Note Indenture),
other than notes, bonds, obligation and
securities); or
(B) Making certain investments
permitted under the 2008 Senior Note
Indenture, which in Avnet's good faith
reasonable judgment will immediately
constitute or be part of the Related
Business of Avnet or the applicable
Subsidiary (if it continues to be a
Subsidiary) immediately following such
transaction;
then the Aggregate Commitments shall, immediately and
automatically on such date, be permanently reduced by
an amount equal to the amount of such Asset Sale
Amount not so applied (the "Excess Amount"). To the
extent that the then Outstanding
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Amount of all Loans and L/C Obligations exceeds the
Aggregate Commitments as reduced by the Excess
Amount, the Borrowers shall immediately upon the
effectiveness of the reduction in Aggregate
Commitments hereunder prepay Loans in an amount equal
to the amount by which such Outstanding Amount of all
Loans and L/C Obligations exceeds the Aggregate
Commitments as reduced by the Excess Amount, plus
interest and any amounts owing under Section 3.05,
and, if after repayment of all Loans the resulting
Outstanding Amount still exceeds the Aggregate
Commitments as reduced by the Excess Amount, Cash
Collateralize L/C Obligations in an amount equal to
such remaining excess."
(d) Section 2.15 shall be amended by adding the following
as new subsection (c) thereto:
"(c) If at any time Avnet or any of its
Subsidiaries becomes obligated to grant immediately to the
holders of the 2008 Senior Notes (or any agent or trustee
acting on their behalf) a Lien pursuant to any equal and
ratable collateral sharing provision contained in the 2008
Senior Note Indenture, Avnet shall be deemed to have granted,
on its own behalf or on behalf of such Subsidiary, a Lender
Lien upon any and all assets and property subject to such
Lien, as security for the Obligations, such that the
Obligations are equally and ratably secured together with the
obligations under the 2008 Senior Notes. This Agreement shall
be deemed a security agreement for purposes of the Uniform
Commercial Code. Avnet shall thereafter immediately execute
and deliver, or cause such Subsidiary to execute and deliver,
such instruments, documents and agreements, in form and
substance satisfactory to the Administrative Agent, and shall
perform or cause to be performed such other acts, as may be
necessary or appropriate in the discretion of the
Administrative Agent to Perfect such Lender Lien."
(e) Section 6.01 shall be amended as follows:
(i) By deleting the word "or" at the end of
subsection (q);
(ii) By renumbering subsection (r) as subsection
(t); and
(iii) By inserting the following as new
subsections (r) and (s):
"(r) prompt notice of the consummation of any
transaction giving rise to an "Asset Sale Amount" (as defined
in the 2008 Senior Note Indenture), other than any transaction
that is not subject to compliance with the covenant described
in the Preliminary Prospectus under the heading "Limitations
on Sale of Assets and Subsidiary Stock; Offer to Repurchase
from Excess Proceeds" and contained in the 2008 Senior Note
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Indenture, setting forth the date of consummation and the
amount of such Asset Sale Amount;
(s) if within 350 days after the consummation of
a transaction giving rise to an "Asset Sale Amount" (as
defined in the 2008 Senior Note Indenture), other than any
transaction that is not subject to compliance with the
covenant described in the Preliminary Prospectus under the
heading "Limitations on Sale of Assets and Subsidiary Stock;
Offer to Repurchase from Excess Proceeds" and contained in the
2008 Senior Note Indenture, Avnet shall not have applied an
amount equal to such Asset Sale Amount as set forth in Section
2.06(b)(ii), immediate notice setting forth the applicable
Excess Amount; or"
(f) Section 6.07 shall be amended at clause (n) thereof
by deleting the final word "and", and at clause (o) thereof, by inserting the
following immediately prior to the final period thereof:
";and
(p) Liens granted to holders of the 2008 Senior
Notes (or any agent or trustee acting on their behalf)
pursuant to any equal and ratable collateral sharing provision
contained in the 2008 Senior Note Indenture, upon the creation
of any Lien that is not a "Permitted Lien" (as defined in the
2008 Senior Note Indenture) ("Antecedent Lien"), provided and
to the extent that such Antecedent Lien is a Permitted Lien
hereunder."
(g) Section 6.08(b) shall be amended by adding the
following proviso to the end thereof:
"and provided, further, that, other than any transaction that
is not subject to compliance with the covenant described in
the Preliminary Prospectus under the heading "Limitations on
Sale of Assets and Subsidiary Stock; Offer to Repurchase from
Excess Proceeds" and contained in the 2008 Senior Note
Indenture, (1) at least 75% of the total consideration for any
such Asset Sale shall consist of cash or cash equivalents or
"Related Business Assets" (as defined in the 2008 Senior Note
Indenture) and (2) Avnet shall determine in good faith that it
or such Subsidiary is receiving fair market value for such
Asset Sale."
(h) Section 6.13 shall be amended by:
(i) Inserting the clause number "(a)" before the
beginning of the first sentence thereof; and
(ii) Inserting a new clause (b) at the end
thereof as follows:
"(b) If at any time any Subsidiary of Avnet is
then obligated immediately to guarantee any amounts on the
2008 Senior Notes, Avnet shall cause such Subsidiary
immediately to guarantee the Obligations by
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executing and delivering to the Administrative Agent such
instruments, documents, agreements and opinions, in form and
substance reasonably satisfactory to the Administrative Agent,
as may be necessary or appropriate in the discretion of the
Administrative Agent."
(i) Section 6.14(i) shall be amended by inserting after
the phrase "in the ordinary course of business" the phrase ", or pursuant to
documentation entered into substantially concurrently with the issuance of
Capital Markets Notes on or before February 14, 2003, that are convertible into
Avnet's common stock,".
(j) Section 6.17 shall be amended and restated in its
entirety as follows:
"6.17 RESTRICTED PAYMENTS. Avnet shall not, and shall
not permit any of its Subsidiaries to, (a) declare or pay any
dividends in respect of its capital stock or other equity
interests (other than dividends payable, but for fractional
shares, solely in common stock of Avnet), or purchase, redeem,
retire or otherwise acquire for value any of its capital stock
or other equity interests now or hereafter outstanding, in
each case other than pursuant to a Permitted Hedge
Transaction, return any capital to its shareholders as such,
or make any distribution of assets to its shareholders as
such, or (b) other than solely with the proceeds of a
Permitted Capital Markets Transaction to the extent permitted
pursuant to Section 6.18, make any voluntary or optional
prepayment or early repayment, early redemption, early
exchange or early acquisition for value of, or establish any
sinking fund with respect to, any Debt evidenced by Capital
Markets Notes, in each case, other than the conversion of any
Debt evidenced by Capital Markets Notes into the common stock
of Avnet."
(k) Section 6.20 shall be amended and restated as follows:
"6.20 OTHER NEGATIVE PLEDGES. Avnet shall not, and
shall not suffer or permit any of its Subsidiaries to, enter
into or first become subject to after the Second Amendment
Date any agreement or arrangement that directly or indirectly
prohibits Avnet or any such Subsidiary from granting any Lien
to the Administrative Agent (or restricting Perfection or
enforcement of such Lien) with respect to any Springing Lien
Assets or Collateral (a "Third Party Negative Pledge"),
provided, that Avnet and its Subsidiaries may enter into or
incur Third Party Negative Pledges (a) pursuant to an
Acquisition permitted by Section 6.14(h), provided such Third
Party Negative Pledge affects only assets and property so
acquired and is not undertaken or incurred in contemplation of
such Acquisition; or (b) pursuant to a transaction creating a
Lien permitted by Section 6.07(b) or provided such Third Party
Negative Pledge is limited to the assets or property subject
to such Permitted Lien; or (c) pursuant to Permitted Debt
comprising a Permitted Capital Markets Transaction, provided
that such Third Party Negative Pledge is no more restrictive
than that contained in the October 2000 Indenture."
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(l) Article VI shall be further amended by adding the
following new sections at the end thereof:
"6.30 TRANSACTIONS WITH AFFILIATES. Avnet shall not,
and shall not permit any of its Subsidiaries to, enter into
any transaction of any kind with any Affiliate of Avnet (other
than any Wholly Owned Consolidated Subsidiary of Avnet),
whether or not in the ordinary course of business, other than
on fair and reasonable terms substantially as favorable to
Avnet or such Subsidiary as would be obtainable by Avnet or
such Subsidiary at the time in a comparable arm's length
transaction with a Person other than an Affiliate.
6.31 MODIFICATION OF THE 2008 SENIOR NOTE INDENTURE.
Avnet shall not enter into any amendment, revision, supplement
or modification to the 2008 Senior Note Indenture that in any
manner directly or indirectly (a) affects any defined term
therefrom used in this Agreement, or (b) materially restricts
or impairs any of the Administrative Agent's or Lenders' legal
or contractual rights or remedies under this Agreement."
(m) Section 7.01 shall be amended as follows:
(i) In subsection (f), by replacing the dollar
amount "$35,000,000" with "$15,000,000";
(ii) By amending and restating subsection (g) in
its entirety as follows:
"(g) Any event or condition shall occur which (i)
results in the acceleration of the maturity of any Debt or
obligation of any Borrower or any Material Subsidiary in
excess of $15,000,000 or (ii) enables the Person to whom any
Debt or obligation of the Borrower or any Material Subsidiary
in excess of $35,000,000 is owed, or any Person acting on such
Person's behalf, to accelerate the maturity thereof;"
(iii) In subsection (n), by replacing the dollar
amount "$50,000,000" with "$15,000,000".
2. Representations and Warranties. Avnet hereby represents and
warrants to the Administrative Agent and the Lenders as follows:
(a) No Default or Event of Default has occurred and is
continuing, either immediately prior to or after giving effect to this
Amendment.
(b) The execution, delivery and performance by Avnet of
this Amendment have been duly authorized by all necessary corporate and other
action and do not and will not require any registration with, consent or
approval of, notice to or action by, any Person (including any Governmental
Authority) in order to be effective and enforceable. The Credit Agreement as
amended by this Amendment constitutes the legal, valid and binding obligations
of Avnet, enforceable against it in accordance with its respective terms,
without defense, counterclaim or offset.
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(c) All representations and warranties of Avnet contained
in Article V of the Credit Agreement as amended hereby are true and correct as
of the Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date.
(d) Avnet is entering into this Amendment on the basis of
its own investigation and for its own reasons, without reliance upon the
Administrative Agent, the Lenders, their respective Affiliates, or any other
Person.
(e) As of the Effective Date, there are no Designated
Borrowers under the Credit Agreement.
3. Effective Date. This Amendment will become effective as of the
date shown first above, provided each of the following conditions precedent has
been satisfied (the "Effective Date"):
(a) The Administrative Agent shall have received from
each of Avnet and the Required Lenders a duly executed original (or, if elected
by the Administrative Agent, an executed facsimile copy) counterpart to this
Amendment.
(b) The Administrative Agent shall have received from the
secretary or assistant secretary of Avnet a certificate providing satisfactory
evidence of the authorization of the execution, delivery and performance by
Avnet of this Amendment and any other documents contemplated hereby.
(c) The Administrative Agent shall have received from
Avnet a certificate executed by a Responsible Officer of Avnet, dated as of the
Effective Date and certifying that (i) all representations and warranties
contained herein are true and correct on and as of the Effective Date as though
made on and as of such date and (ii) on and as of the Effective Date, no event
has occurred which has or would reasonably be likely to have a material adverse
effect on the business, assets, liabilities (actual or contingent), operations,
condition (financial or otherwise) or prospects of Avnet or of Avnet and its
Subsidiaries taken as a whole, or on the facts and information regarding Avnet
and its Subsidiaries as represented as of the date hereof.
(d) The Administrative Agent shall have received, in form
and substance satisfactory to it, such additional approvals, consents, opinions,
documents and other information as the Administrative Agent may request.
(e) The Effective Date shall have occurred no later than
February 14, 2003.
For purposes of determining compliance with the conditions specified in this
Section 3, each Lender that has executed this Amendment and delivered it to the
Administrative Agent shall be deemed to have consented to, approved or accepted,
or to be satisfied with, each document or other matter either sent, or made
available for inspection, by the Administrative Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Lender.
4. Reservation of Rights. Avnet acknowledges and agrees that the
execution and delivery by the Administrative Agent and the Required Lenders of
this Amendment shall not (a)
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be deemed to create a course of dealing or otherwise obligate the Administrative
Agent or any Lender to execute similar amendments under the same or similar
circumstances in the future or (b) be deemed to create any implied waiver of any
right or remedy of the Administrative Agent or any Lender with respect to any
term or provision of any Loan Document.
5. Miscellaneous.
(a) Except as herein expressly amended, all terms,
covenants and provisions of the Credit Agreement are and shall remain in full
force and effect and all references therein to such Credit Agreement shall
henceforth refer to the Credit Agreement as amended by this Amendment. This
Amendment shall be deemed incorporated into, and a part of, the Credit
Agreement. The Credit Agreement, as amended hereby, is hereby ratified by Avnet.
(b) This Amendment shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors and
assigns. No third party beneficiaries are intended in connection with this
Amendment.
(c) THIS AMENDMENT IS SUBJECT TO THE PROVISIONS OF
SECTIONS 9.19 AND 9.20 OF THE CREDIT AGREEMENT, THE PROVISIONS OF WHICH ARE BY
THIS REFERENCE HEREBY INCORPORATED HEREIN IN FULL.
(d) This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Administrative Agent of a facsimile transmitted document
purportedly bearing the signature of a Lender or Avnet shall bind such Lender or
Avnet, respectively, with the same force and effect as the delivery of a hard
copy original. Any failure by the Administrative Agent to receive the hard copy
executed original of such document shall not diminish the binding effect of
receipt of the facsimile transmitted executed original of such document of the
party whose hard copy page was not received by the Administrative Agent.
(e) This Amendment, together with the Credit Agreement,
contains the entire and exclusive agreement of the parties hereto with reference
to the matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 9.01 of the Credit
Agreement.
(f) If any term or provision of this Amendment shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Amendment or
the Credit Agreement, respectively.
(g) Avnet covenants to pay to or reimburse the
Administrative Agent, upon demand, for all out-of-pocket costs and expenses
incurred in connection with the development, preparation, negotiation, execution
and delivery of this Amendment and the other documents contemplated hereby.
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(h) This Amendment shall constitute a Loan Document.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.
AVNET, INC.
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President, Secretary and
General Counsel
Signature Page for the Seventh Amendment to Credit Agreement
S-1
BANK OF AMERICA, N.A., as the
Administrative Agent, A Lender, the L/C
Issuer and the Swing Line Lender
BY: /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Principal
Signature Page for the Seventh Amendment to Credit Agreement
S-2
ABN AMRO BANK N.V., as a Lender
By: /s/ XXXXX XXXXXXX-XXXXXXX
----------------------------------------
Name: XXXXX XXXXXXX-XXXXXXX
Title: EXECUTIVE DIRECTOR
By: /s/ XXXXX XXX
----------------------------------------
Name: XXXXX XXX
Title: VICE PRESIDENT
Signature Page for the Seventh Amendment to Credit Agreement
S-3
THE BANK OF NOVA SCOTIA, as a
Lender
By: /s/ [ILLEGIBLE]
----------------------------------------
Name:_______________________________________
TITLE:______________________________________
Signature Page for the Seventh Amendment to Credit Agreement
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BANK ONE, N.A., as a Lender
BY: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
Signature Page for the Seventh Amendment to Credit Agreement
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CREDIT SUISSE FIRST BOSTON, as a
Lender
By: /s/ Xxxxxx Xxxx
----------------------------------------
Name: Xxxxxx Xxxx
Title: Director
BY: /s/ Xxx X. Xxxxx
---------------------------------------
Name: Xxx X. Xxxxx
Title: Associate
Signature Page for the Seventh Amendment to Credit Agreement
S-7
WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Signature Page for the Seventh Amendment to Credit Agreement
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THE NORTHERN TRUST COMPANY,
as a Lender
By: /s/ Xxxx Xxxxxx
--------------------------
Name: Xxxx Xxxxxx
Title: Second Vice President
Signature Page for the Seventh Amendment to Credit Agreement
S-12
STANDARD CHARTERED BANK, as a
Lender
By: /s/ XXXX XXXXXXX XXXXXXXX
--------------------------
Name: XXXX XXXXXXX XXXXXXXX
Title: Sr. Vice President
By: /s/ XXXXXX XXXXXXXXXX
--------------------------
Name: XXXXXX XXXXXXXXXX
Title: AVP/CREDIT DOCUMENTATION
STANDARD CHARTERED BANK NY
Signature Page for the Seventh Amendment to Credit Agreement
S-14
