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Exhibit 10.8
SECOND AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT
THIS SECOND AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT
(this "Amendment"), dated as of this 21st day of November, 1996, between BLACK
BOX CORPORATION, a Delaware corporation formerly known as MB Communications,
Inc. (the "Guarantor"), and MELLON BANK, N.A., a national banking association
(the "Lender").
W I T N E S S E T H:
WHEREAS, the Guarantor executed and delivered that certain
Guaranty and Suretyship Agreement, dated as of May 6, 1994, in favor of the
Lender, as amended by that certain First Amendment to Guaranty and Suretyship
Agreement, dated as of March 30, 1995 (as amended, the "Guaranty"); and
WHEREAS, the Lender and the Guarantor have agreed to further
amend the Guaranty as hereinafter set forth.
NOW, THEREFORE, intending to be legally bound and for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto covenant and agree as follows:
1. The Guaranty is hereby amended by deleting Section 4.18
thereof and inserting the following Section in lieu thereof:
4.18. CONSOLIDATED TAX RETURN. The Guarantor shall not, and
shall not suffer any of its Subsidiaries to, file or consent to the
filing of any consolidated income tax return with any Person other
than the Borrower, the Guarantor, the Holding Company Guarantor and
their respective Subsidiaries.
2. The Guaranty is hereby amended by deleting Section 5.01
thereof and inserting the following Section in lieu thereof:
5.01. CONSOLIDATED NET WORTH. Consolidated Net Worth of the
Guarantor shall not be less than $60,000,000; PROVIDED, that such
amount shall be increased on the last day of each fiscal year of the
Guarantor, beginning with the fiscal year ending on or about March 31,
1997, by an amount equal to fifty percent (50%) of the Guarantor's
Consolidated Net Income for such fiscal year, PROVIDED, FURTHER, that
such amount shall not be decreased as the result of any loss.
3. The Guaranty is hereby amended by deleting Section 5.03
thereof and inserting the following Section in lieu thereof:
5.03. DIVIDENDS AND RELATED DISTRIBUTIONS. The Guarantor
shall not declare or make any Stock Payment, except that the Guarantor
may make Stock Payments during any fiscal
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year in an amount not in excess of fifty percent (50%) of Guarantor's
Consolidated Net Income.
4. The Guaranty is hereby amended by deleting Section 5.04
thereof and inserting the following Section in lieu thereof:
5.04. CAPITAL EXPENDITURES. The Guarantor shall not, and
shall not permit any Subsidiary of the Guarantor to, make any Capital
Expenditures on or after the date hereof, except for Capital
Expenditures not in excess of $3,500,000 in the aggregate by the
Guarantor and its Subsidiaries in any fiscal year.
5. The Guaranty is hereby amended by deleting Section 5.06
thereof and inserting the following Section in lieu thereof:
5.06. CASH FLOW OF THE GUARANTOR. As of the last date of each
fiscal quarter, the ratio of (a) the Consolidated Net Income of the
Guarantor plus the amortization expense related to intangible assets,
without giving effect, in the case of the Guarantor and its
Subsidiaries, to reductions in income attributable to amortization of
original issue discount with respect to the promissory note of the
Guarantor delivered pursuant to the Senior Subordinated Indenture, for
the four (4) most recently completed fiscal quarters to (b) the
aggregate Indebtedness of the Guarantor and its consolidated
Subsidiaries determined on a consolidated basis in accordance with
GAAP shall not be less than .25 to 1.
6. Section 5.07 of the Guaranty is hereby deleted in its
entirety and the following Section is hereby inserted in liue thereof:
5.07. INDEBTEDNESS TO TOTAL CAPITALIZATION. The Guarantor
shall not permit the ratio of Indebtedness of the Guarantor and its
Subsidiaries to Adjusted Total Capitalization to be greater than (a)
sixty percent (60%) during the period from April 1, 1996, through
March 31, 1997, and (b) fifty-five percent (55%) from and after April
1, 1997.
7. Section 5.09 of the Guaranty is hereby deleted in its
entirety and the following Section is hereby inserted in lieu thereof:
5.09. INDEBTEDNESS. The Guarantor shall not, and shall not
permit any of its Subsidiaries to, at any time create, incur, assume
or suffer to exist any Indebtedness except:
(i) Indebtedness incurred in connection with the Credit
Agreement;
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(ii) Indebtedness incurred in connection with the Term Loan
Documents;
(iii) subject to compliance with Section 5.08, Indebtedness
of any Subsidiary of the Guarantor to the Guarantor or any Subsidiary
of the Guarantor; and
(iv) other Indebtedness of the Guarantor or any of its
Subsidiaries, provided (a) after giving effect thereto and to the
application of the proceeds thereof, the Guarantor and its
Subsidiaries are in compliance with all provisions of this Article V
and, to the extent applicable, Article VII of the Credit Agreement and
(b) no Potential Default or Event of Default exists or would occur as
a result of the creation, incurrence, assumption or existence thereof;
provided, however, that Indebtedness of the Guarantor from any
Affiliate (other than the Borrower) shall be subordinated to the
Guarantor's obligations hereunder on the terms identified in Exhibit J
to the Credit Agreement.
8. Section 5.10 of the Guaranty is hereby deleted in its
entirety and the following Section is hereby inserted in lieu thereof:
5.10. DISPOSITION OF PROPERTIES AND ASSETS. The Guarantor
shall not, and shall not permit any of its Subsidiaries to, sell,
lease, transfer or otherwise dispose of, voluntarily or involuntarily,
any of its properties or assets, except:
(i) sales of inventory in the ordinary course of business;
(ii) if no Potential Default or Event of Default exists, the
following:
(a) subject, to the extent applicable, to
compliance with Article VII of the Credit Agreement,
transfers of property between wholly-owned
Subsidiaries of the Guarantor and from Subsidiaries
of the Guarantor to the Guarantor or wholly-owned
Subsidiaries of the Guarantor and the transfer of
all of the capital stock of the Borrower from the
Guarantor to the Holding Company Guarantor;
(b) the Spin-Off; and
(c) assets (other than any capital stock of
the Borrower) with an Asset Percentage Value, when
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combined with the Asset Purchase Value of any other
assets disposed of pursuant to this clause (c)
during the preceding four (4) fiscal quarters of the
Guarantor, of not more than ten percent (10%) and
for consideration representing the fair market value
of such asset at the time of such disposition,
provided, that in no event shall the total assets
disposed of pursuant to this clause (c) have a value
(taken at the higher of book value or the fair
market value thereof as determined in good faith by
the Board of Directors of the Guarantor) exceeding
fifteen percent (15%) of Consolidated Total Assets;
provided, however, that in the case of clause (ii)(b) above,
all agreements and instruments entered into in connection
with the Spin-Off shall be in form and substance satisfactory
to the Lender.
9. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
10. Except as specifically amended by this Amendment, the
terms and conditions of the Guaranty shall remain in full force and effect and
shall be binding upon the parties hereto and their respective successors and
assigns.
11. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
BLACK BOX CORPORATION
By: /s/ XXXXXXXXX X. XXXXX
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Title: Vice President
MELLON BANK, N.A.
By: /s/ XXXX XXXXXXXXX
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Title: Asst. Vice President
[Signatures to Second Amendment
to Guaranty and Suretyship Agreement]
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