EXHIBIT 10G
FIRST AMENDMENT TO CREDIT AGREEMENT (364-DAY)
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (364-DAY) (this "Amendment"),
dated as of March 29, 2002, is entered into by and among AVNET, INC., a New York
corporation ("Avnet"), the several financial institutions party to the Credit
Agreement (364-Day) defined 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, each Lender, and the Administrative Agent are parties to that
certain Credit Agreement (364-Day) dated as of October 25, 2001 (the "Credit
Agreement") pursuant to which the Administrative Agent and the Lenders have
extended certain credit facilities to Avnet and certain Subsidiaries of Avnet.
B. Avnet has requested that the Lenders agree to certain amendments of the
Credit Agreement.
C. 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 them in the Credit
Agreement.
2. Amendments to Credit Agreement. The Credit Agreement shall be amended
as follows, effective as of the Effective Date:
(a) Section 1.01 of the Credit Agreement shall be amended at the
definition of "Applicable Rate" by deleting the pricing grid appearing therein
and replacing it with the following:
APPLICABLE RATE
Eurocurrency Rate Base
Loans Rate
Category Debt Ratings Facility Fee & Letters of Credit Loans
-------- ------------ ------------ ------------------- -----
1 A/A2 or better 0.060% 0.465% 0.000%
2 A-/A3 0.080% 0.545% 0.000%
3 BBB+/Baa1 0.100% 0.650% 0.000%
4 BBB/Baa2 0.175% 1.075% 0.000%
5 Lower than 0.225% 1.275% 0.000%
BBB/Baa2
(b) Section 1.01 of the Credit Agreement shall be amended at the
definition of "EBITDA" by restating such definition in its entirety to read as
follows:
"EBITDA" means, for any period, in respect of Avnet and its
Subsidiaries on a consolidated basis, without duplication, the sum of (a)
Net Income, plus (b) an amount which, in the determination of Net Income,
has been deducted for (i) Interest Expense, (ii) income taxes, (iii)
depreciation and amortization expense and (iv) extraordinary items
consisting of non-cash losses or non-recurring non-cash losses, minus (c)
an amount which, in the determination of Net Income for such period, has
been included for (i) extraordinary items consisting of gains and (ii)
gains on the sale or other disposition of assets, plus (d) cash related
one-time charges recorded to Avnet's income statement during the Fiscal
Quarter ending nearest June 30, 2001 in an aggregate amount not to exceed
$146,000,000 relating to (i) the merger of Kent Electronics Corporation
with and into Avnet pursuant to an Amended and Restated Merger Agreement
and Plan of Merger dated as of March 21, 2001 and (ii) other restructuring
activities.
(c) Section 2.07(c)(iii)(A) of the Credit Agreement shall be amended
by deleting the phrase "September 30, 2001" appearing therein and replacing it
with the phrase "December 31, 2001".
(d) Section 6.11(a) of the Credit Agreement shall be amended to read
in its entirety as follows:
(a) Minimum Interest Coverage Ratio. Avnet and its
Subsidiaries shall maintain, as of the end of each Fiscal Quarter set
forth below (commencing with the Fiscal Quarter ending nearest September
30, 2001), a ratio of EBITDA to Interest Expense (computed, (i) with
respect to the Fiscal Quarters ending nearest March 31, 2002, June 30,
2002 and September 30, 2002, for the Fiscal Quarter period then ending and
(ii) with respect to any other Fiscal Quarter, for the four Fiscal Quarter
period then ending) of no less than the correlative ratios set forth
below:
MINIMUM INTEREST
QUARTERLY PERIOD COVERAGE RATIO
Fiscal Quarter ending nearest September 30, 2001 1.75 to 1.00
Fiscal Quarter ending nearest December 31, 2001 1.75 to 1.00
Fiscal Quarter ending nearest March 31, 2002 1.25 to 1.00
Fiscal Quarter ending nearest June 30, 2002 1.60 to 1.00
Fiscal Quarter ending nearest September 30, 2002 1.90 to 1.00
Fiscal Quarter ending nearest December 31, 2002 2.50 to 1.00
Fiscal Quarter ending nearest March 31, 2003 2.75 to 1.00
Fiscal Quarter ending nearest June 30, 2003 3.00 to 1.00
Fiscal Quarter ending nearest September 30, 2003 3.25 to 1.00
Fiscal Quarter ending nearest December 31, 2003 and thereafter 3.50 to 1.00
2.
(e) Section 6.15 of the Credit Agreement shall be amended to read in
full as follows:
6.15 CAPITAL EXPENDITURES. Avnet shall not, nor shall it
permit any of its Subsidiaries to, make or become legally obligated to
make any expenditure in respect of the purchase or other acquisition of
any fixed or capital asset (excluding normal replacements and maintenance
which are properly charged to current operations), except for capital
expenditures made in the ordinary course of business and not exceeding (a)
$125,000,000 in the aggregate for all such capital expenditures together
during any four consecutive Fiscal Quarter period ending on or prior to
the last day of the Fiscal Quarter ending nearest June 30, 2002, (b)
$135,000,000 in the aggregate for all such capital expenditures together
during the four consecutive Fiscal Quarter period ending on the last day
of the Fiscal Quarter ending nearest September 30, 2002 or (c)
$160,000,000 in the aggregate for all such capital expenditures together
during any four consecutive Fiscal Quarter period ending on or after the
last day of the Fiscal Quarter ending nearest December 31, 2002.
(f) Schedule 2 to the form of Compliance Certificate set forth at
Exhibit C of the Credit Agreement shall be amended by restating such Schedule in
its entirety in the form attached hereto as Exhibit A.
3. 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.
(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.
(c) All representations and warranties of Avnet contained in Article
V of the Credit Agreement are true and correct as of the Effective 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 and the Lenders or any other Person.
(e) As of the Effective Date, there are no Designated Borrowers
under the Credit Agreement.
4. Effective Date. This Amendment will become effective when each of the
conditions precedent set forth in this Section 4 has been satisfied (the
"Effective Date"):
3.
(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.
(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 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.
(d) The Administrative Agent shall have received from Avnet for the
ratable account of each Lender executing this Amendment before 2:00 p.m. (San
Francisco time) on March 28, 2002, an amendment fee of 0.10% (10 b.p.) times
such Lender's total Commitment. Such fee shall be fully-earned on the date so
paid and shall be nonrefundable.
(e) Avnet shall have paid to the Arranger for the Arranger's own
account an amendment arrangement fee in an amount separately agreed to between
Avnet and the Arranger, which amendment arrangement fee shall be fully earned on
the date so paid and nonrefundable for any reason whatsoever.
(f) Avnet shall have paid all Attorney Costs of the Administrative
Agent to the extent invoiced prior to the Effective Date (including any
previously invoiced and outstanding Attorney Costs that relate to services
previously provided), plus such additional amounts of Attorney Costs as shall
constitute the Administrative Agent's reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings related to this
Amendment (provided that such estimate shall not thereafter preclude a final
settling of accounts between Avnet and the Administrative Agent).
(g) 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.
For purposes of determining compliance with the conditions specified in
this Section 4, 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.
5. 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) 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.
4.
6. 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.
(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,
9.20 AND 9.21 OF THE CREDIT AGREEMENT RELATING TO GOVERNING LAW, WAIVER OF RIGHT
TO TRIAL BY JURY AND JUDGMENT CURRENCY, 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
and the Lenders, upon demand, for all out-of-pocket costs and expenses incurred
in connection with the development, preparation, negotiation, execution and
delivery of this Amendment.
(h) This Amendment shall constitute a "Loan Document" under and as
defined in the Credit Agreement.
5.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.
AVNET, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxx
---------------------------------
Title: Senior Vice President and Chief
---------------------------------
Financial Officer
---------------------------------
(Signature Page to Amendment)
S-1
BANK OF AMERICA, N.A., as the
Administrative Agent and a Lender
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxx
---------------------------------
Title: Principal
---------------------------------
(Signature Page to Amendment)
S-2
ABN AMRO BANK N.V., as a Lender
By: /s/ Xxxxx Xxx
----------------------------------
Name: Xxxxx Xxx
----------------------------------
Title: Vice President
----------------------------------
By: /s/ Xxxxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxxxx Xxxxx
---------------------------------
Title: Assistant Vice President
---------------------------------
(Signature Page to Amendment)
S-3
THE BANK OF NOVA SCOTIA, as a Lender
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
----------------------------------
Title: Managing Director
----------------------------------
(Signature Page to Amendment)
S-4
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------
Name: X. Xxxxxxxxxx
----------------------------------
Title: Vice President
----------------------------------
(Signature Page to Amendment)
S-5
BANK ONE, N.A., as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------------
Title: Director
----------------------------------
(Signature Page to Amendment)
S-6
CREDIT SUISSE FIRST BOSTON, as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: Associate
----------------------------------
By: /s/ Xxxx X'Xxxx
----------------------------------
Name: Xxxx X'Xxxx
----------------------------------
Title: Director
----------------------------------
(Signature Page to Amendment)
S-7
FIRST UNION NATIONAL BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: Vice President
----------------------------------
(Signature Page to Amendment)
S-8
FLEET NATIONAL BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
----------------------------------
Title: S. V. P.
----------------------------------
(Signature Page to Amendment)
S-9
KBC BANK, N.V., as a Lender
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------------
Title: First Vice President
-----------------------------------
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
-----------------------------------
Title: Associate
-----------------------------------
(Signature Page to Amendment)
S-10
THE NORTHERN TRUST COMPANY, as a Lender
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
-----------------------------------
Title: Second Vice President
-----------------------------------
(Signature Page to Amendment)
S-11
SKANDINAVISKA ENSKILDA XXXXXX XX (PUBL),
as a Lender
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxxx
-------------------------------------
Title: Vice President & Client Executive
-------------------------------------
(Signature Page to Amendment)
X-00
XXXXX XXXX XX XXXXX, XXX XXXX BRANCH, as
a Lender
By: /s/ A.K. Basu
-----------------------------------
Name: A.K. Basu
-----------------------------------
Title: Senior Vice President (Credit)
-----------------------------------
(Signature Page to Amendment)
S-13
UNICREDITO ITALIANO, NEW YORK BRANCH, as
a Lender
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxxx
----------------------------------
Title: SVP & Manager
----------------------------------
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxx
----------------------------------
Title: First Vice President
----------------------------------
(Signature Page to Amendment)
S-14
EXHIBIT A TO AMENDMENT
(Please see attached restated form of Schedule 2 to Compliance Certificate)
FOR THE QUARTER/YEAR ENDED _________________ (THE "STATEMENT DATE")
SCHEDULE 2
to the Compliance Certificate
($ in 000's)
I. SECTION 6.11(a) - MINIMUM INTEREST COVERAGE RATIO.
A. EBITDA for the four consecutive Fiscal Quarter period ending on or
nearest the Statement Date (the "Subject Period"); provided that,
solely for purposes of calculating Minimum Interest Coverage Ratio
hereunder as of the Statement Dates occurring on or nearest March
31, 2002, June 30, 2002 and September 30, 2002, "Subject Period"
shall mean the Fiscal Quarter period ending on or nearest such
Statement Date:
1. Net Income for the Subject Period: $
----------
2. Interest Expense for the Subject Period: $
----------
3. Provision for income taxes for the Subject Period: $
----------
4. Depreciation expense for the Subject Period: $
----------
5. Amortization expense for the Subject Period: $
----------
6. Extraordinary items constituting non-cash
losses or non-recurring non-cash losses for
the Subject Period: $
----------
7. Cash-related one-time charges recorded to Avnet's
income statement during the Fiscal Quarter ended
nearest June 30, 2001 in an aggregate amount not
to exceed $146,000,000 relating to (a) the merger
of Kent Electronics Corporation with and into
Avnet and (b) other restructuring activities: $
----------
8. An amount which, in the determination of Net
Income for the Subject Period, has been included
for (a) extraordinary items constituting gains
and (b) gains on the sale or other disposition
of assets: $
----------
9. EBITDA (Lines I.A.1 + 2 + 3 + 4 + 5 + 6 + 7)
minus (Line I.A.8): $
----------
B. Interest Expense for the Subject Period
(Line I.A.2 above): $
----------
C. Interest Coverage Ratio: (Line I.A.9 / Line I.B): ____to 1.00
Schedule 2 to Form of Compliance Certificate
Page 1
Minimum required:
MINIMUM INTEREST
QUARTERLY PERIOD COVERAGE RATIO
Fiscal Quarter ending nearest September 30, 2001 1.75 to 1.00
Fiscal Quarter ending nearest December 31, 2001 1.75 to 1.00
Fiscal Quarter ending nearest March 31, 2002 1.25 to 1.00
Fiscal Quarter ending nearest June 30, 2002 1.60 to 1.00
Fiscal Quarter ending nearest September 30, 2002 1.90 to 1.00
Fiscal Quarter ending nearest December 31, 2002 2.50 to 1.00
Fiscal Quarter ending nearest March 31, 2003 2.75 to 1.00
Fiscal Quarter ending nearest June 30, 2003 3.00 to 1.00
Fiscal Quarter ending nearest September 30, 2003 3.25 to 1.00
Fiscal Quarter ending nearest December 31, 2003 and thereafter 3.50 to 1.00
II. SECTION 6.11(b) - MINIMUM NET WORTH.
A. Actual Net Worth at the Statement Date: $
---------
B. 50% of positive Net Income (without deduction for loss)
for each Fiscal Quarter ending subsequent to the Fiscal
Quarter ended nearest June 30, 2001: $
---------
C. 50% of any increase in shareholders' equity (as
determined in accordance with GAAP) resulting from
any issuance of capital stock from and after the last
day of the Fiscal Quarter ended nearest June 30, 2001: $
---------
D. A amount equal to 85% of Net Worth as of the last day of
the Fiscal Quarter ended nearest June 30, 2001: $
---------
E. Minimum required Net Worth (Lines II.B + II.C + II.D): $
---------
F. Excess (deficiency) for covenant compliance
(Line II.A - II.E): $
---------
III. SECTION 6.11(c) - MAXIMUM LEVERAGE RATIO.
(NOTE: In the event of the consummation of any Permitted
Securitization, Funded Debt and Total Capitalization shall
each be adjusted to include (without duplication) Attributable
Indebtedness of any Securitization Subsidiary outstanding at
such time)
Schedule 2 to Form of Compliance Certificate
Page 2
A. Funded Debt at the Statement Date: $
---------
B. Total Capitalization at the Statement Date:
1. Net Worth at the Statement Date: $
---------
2. Funded Debt at the Statement Date: $
---------
3. Total Capitalization (Lines III.B.1 + III.B.2): $
---------
C. Leverage Ratio (Line III.A / Line III.B.3): ________%
Maximum permitted at any time: 55%
IV. SECTION 6.15 - CAPITAL EXPENDITURES.
A. Aggregate amount of all expenditures made by Avnet
and its Subsidiaries in the ordinary course of
business during the Subject Period in respect of
the purchase or other acquisition of any fixed or
capital asset (excluding normal replacement and
maintenance which are properly charged to current
operations): $
---------
B. $125,000,000
C. $135,000,000
D. $160,000,000
E. For covenant compliance purposes, choose one
applicable alternative:
1. In respect of any Subject Period ending on
or prior to the last day of the Fiscal Quarter
ending nearest June 30, 2002 (Line IV.A
minus Line IV.B): $
---------
2. In respect of the Subject Period ending on the
last day of the Fiscal Quarter ending nearest
September 30, 2002 (Line IV.A minus Line IV.C): $
---------
3. In respect of any Subject Period ending on or
after the last day of the Fiscal Quarter
ending nearest December 31, 2002 (Line IV.A
minus Line IV.D): $
---------
Covenant compliance: Yes [ ] No [ ]
Schedule 2 to Form of Compliance Certificate
Page 3
V. SECTION 2.08(c) - LEVERAGE FEE.
A. EBITDA for four consecutive fiscal quarters ending
on the Statement Date: $
----------
B. Amount of Funded Debt existing as of the last day
of the Leverage Fee Reference Quarter, other than
(I) Obligations existing on such day, (II), if such
agreement is then in effect, "Obligations" as
defined in and incurred under the 364-Day Credit
Agreement as of such day, and (III), if such
agreement is then in effect, "Obligations" as
defined in and incurred under the Term Loan Credit
Agreement as of such day: $
----------
C. Attributable Indebtedness of any Securitization
Subsidiary outstanding as of the Statement Date: $
----------
Schedule 2 to Form of Compliance Certificate
Page 4
