EXHIBIT 10.5(b)
MIAMI COMPUTER SUPPLY CORPORATION
as the Borrower
And
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Lenders
And
NATIONAL CITY BANK
as Administrative Agent
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AMENDMENT NO. 2
dated as of
May 15, 1998
to
CREDIT AGREEMENT
dated as of
January 8, 1998
---------------------
AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of May 15, 1998
("this Amendment"), among:
(i) MIAMI COMPUTER SUPPLY CORPORATION, an Ohio corporation
(herein, together with its successors and assigns, the "Borrower");
(ii) the financial institutions listed on the signature pages
hereof (the "Lenders"); and
(iii) NATIONAL CITY BANK, a national banking association, as
Administrative Agent (the "Administrative Agent") for the Lenders under
the Credit Agreement:
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders named therein, and the Administrative
Agent entered into the Credit Agreement, dated as of January 8, 1998, as amended
by Amendment No. 1 thereto, dated as of February 13, 1998 (as so amended, the
"Credit Agreement"; with the terms defined therein, or the definitions of which
are incorporated therein, being used herein as so defined).
(2) The parties hereto desire to increase the Total General Revolving
Commitment from $35,000,000 to $50,000,000 and to terminate the Total Term Loan
Commitment of $15,000,000, and to make certain other changes in the terms and
provisions of the Credit Agreement, all as more fully set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1. Commitments. Effective on the Effective Date (as hereinafter
defined), (i) the Total General Revolving Commitment is increased from
$35,000,000 to $50,000,000, (ii) the Total Term Loan Commitment of $15,000,000
is terminated, (iii) Annex I to the Credit Agreement is amended to read in its
entirety as set forth on Annex I hereto, and (iv) any and all Term Loans made by
a Lender which are outstanding on the Effective Date shall continue outstanding
as General Revolving Loans.
1.2. Definitions. (a) Effective on the Effective Date, the following
defined terms contained in section 1.1 of the Credit
Agreement are amended to read in their entirety as set forth below:
"Minimum Borrowing Amount" shall mean (i) for Swing Line
Revolving Loans, $100,000, with minimum increments thereafter of
$50,000; and (ii) for Loans, other than Swing Line Revolving Loans,
which are (A) Prime Rate Loans, $500,000, with minimum increments
thereafter of $100,000, or (B) Eurodollar Loans, $1,000,000, with
minimum increments thereafter of $1,000,000.
"Testing Period" shall mean (i) for determinations made with
reference to any period ended December 31, 1998, or earlier, amounts
determined on an annualized basis based on the fiscal year to date
through the fiscal quarter then last ended, and (ii) for any
determinations made thereafter a single period consisting of the four
consecutive fiscal quarters of the Borrower then last ended (whether or
not such quarters are all within the same fiscal year), except that if
a particular provision of this Agreement indicates that a Testing
Period shall be of a different specified duration, such Testing Period
shall consist of the particular fiscal period or periods of the
Borrower then last ended which are so indicated in such provision.
(b) Effective on the Effective Date, clause (A)(1) of the definition of
the term "Permitted Acquisition" contained in section 1.1 of the Credit
Agreement is amended to exclude the amount of working capital debt acquired in
an acquisition from the 40% limitation contained therein, and clause (A)(2) of
such definition is clarified with reference to the Testing Period to be used,
with the result that, as so amended, the definition of the term "Permitted
Acquisition" reads in its entirety as follows:
"Permitted Acquisition" shall mean and include any Acquisition
as to which all of the following conditions are satisfied:
(A) if it involves the acquisition of a person whose
primary business lines include computer consumables, LCD
presentation products, and/or the provision of video
conferencing equipment, or the acquisition of assets
comprising any such lines of business (it being understood
that secondary lines of business may be included in any such
acquisition):
(1) at least 40% of the aggregate
consideration for such transaction consists of common
stock of the Borrower (it being understood that the
measurement of the aggregate consideration for a
transaction includes the principal amount of any
assumed Indebtedness and (without duplication) any
Indebtedness of any acquired person or persons, in
each case other than any such Indebtedness which was
incurred and is outstanding for working capital
purposes);
(2) the pro forma ratio of
(x) the Consolidated Total
Indebtedness of the Borrower and the
Indebtedness which is to be incurred to
acquire, or which is being directly or
indirectly assumed in connection with the
acquisition of, such acquired business, on a
combined basis, to
(y) the Borrower's Consolidated
EBITDA and the earnings before interest,
taxes, depreciation and amortization of the
acquired business, on a combined basis (but
without giving effect to any credit for
unobtained or unrealized gains or any
adjustments to overhead in connection with
such acquisition), as determined on an
annualized basis using a Testing Period
consisting of the current fiscal year to
date through the most recent fiscal quarter
or fiscal month for which financial
information is available and has been
delivered to the Lenders (or for a Testing
Period consisting of the previous fiscal
year, if no financial information is then
available for the current fiscal year),
is less than 3.25 to 1.00, such ratio being
determined on a pro forma basis, as if such
acquisition had been completed at the beginning of
such Testing Period, and any such Indebtedness had
been outstanding for such Testing Period; and
(3) at least five Business Days prior to the
completion of such transaction the Borrower has
delivered to the Lenders a certificate of a
responsible financial or accounting officer of the
Borrower demonstrating, in reasonable detail, the
computation of such pro forma ratio; or
(B) if such transaction does not meet the
requirements of clause (A) above, the cumulative aggregate
consideration for such transaction and all other Permitted
Acquisitions effected by the Borrower and its Subsidiaries
after the Effective Date pursuant to this clause (B) would
exceed $5,000,000 (it being understood that the measurement of
the aggregate consideration for a transaction includes all
payments and/or exchanges of stock, cash, securities and/or
other property and the principal amount of any assumed
Indebtedness and (without duplication) any Indebtedness of any
acquired person or persons), unless the Required Lenders
specifically approve or consent to such transaction in
writing; and
(C) such transaction is not actively opposed by the
Board of Directors (or similar governing body) of the selling
person or the person whose equity interests are to be
acquired, unless all of the Lenders consent to such
transaction;
provided, that the term Permitted Acquisition specifically excludes (x)
the Initial Acquisitions and (y) any loans, advances or minority
investments otherwise permitted pursuant to section 9.5.
(c) Effective on the Effective Date, the definition of the term "Change
of Control" in section 1.1 of the Credit Agreement is amended to delete the
event which appeared in clause (iii) thereof relating to a reduction in the
holdings of the Current Holder Group, with the result that, as so amended, the
definition of such term reads in its entirety as follows:
"Change of Control" shall mean and include any of the following:
(i) during any period of two consecutive calendar
years, individuals who at the beginning of such period
constituted the Borrower's Board of Directors (together with
any new directors whose election by the Borrower's Board of
Directors or whose nomination for election by the Borrower's
shareholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors
at the beginning of such period or whose election or
nomination for election was previously so approved) cease for
any reason to constitute a majority of the directors then in
office;
(ii) any person or group (as such term is defined in
section 13(d)(3) of the 1934 Act), other than the Borrower,
any trustee or other fiduciary holding securities under an
employee benefit plan of the Borrower and the Current Holder
Group, shall acquire, directly or indirectly, beneficial
ownership (within the meaning of Rule 13d-3 and 13d-5 of the
0000 Xxx) of more than 45%, on a fully diluted basis, of the
economic or voting interest in the Borrower's capital stock;
(iii) the full time active employment of Xxxxxxx X.
Xxxxxx as chief executive officer (or other significant
position as a senior executive officer with management
authority) of the Borrower shall be voluntarily terminated by
the Borrower or Xx. Xxxxxx, or shall otherwise cease, other
than by reason of death or disability, unless a successor
acceptable to the Required Lenders shall have been appointed
or elected and actually taken office on a full time basis
within three months following any such termination or
cessation, in which case the name of such successor shall be
substituted for the name of the person he or she replaces for
purposes of this clause (iii);
(iv) the shareholders of the Borrower approve a
merger or consolidation of the Borrower with any other person,
other than a merger or consolidation which would result in the
voting securities of the Borrower outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted or exchanged for voting
securities of the surviving or resulting entity) more than 60%
of the combined voting power of the voting securities of the
Borrower or such surviving or resulting entity outstanding
after such merger or consolidation; and/or
(v) the shareholders of the Borrower approve a plan
of complete liquidation of the Borrower or an agreement or
agreements for the sale or disposition by the Borrower of all
or substantially all of the Borrower's assets.
1.3. Capital Expenditures Covenant. Effective on the Effective Date,
the dollar amount which appears in section 9.9 of the Credit Agreement is
changed from $1,000,000 to $2,000,000.
1.4. Dividend Covenant. Effective on the Effective Date, section 9.6 of
the Credit Agreement is amended to add an exception thereto, with the result
that, as so amended, section 9.6 of the Credit Agreement reads in its entirety
as follows:
9.6. Dividends, etc. The Borrower will not (a) directly or
indirectly declare, order, pay or make any dividend (other than
dividends payable solely in capital stock of the Borrower) or other
distribution on or in respect of any capital stock of any class of the
Borrower, whether by reduction of capital or otherwise, or (b) directly
or indirectly make, or permit any of its Subsidiaries to directly or
indirectly make, any purchase, redemption, retirement or other
acquisition of any capital stock of any class of the Borrower (other
than for a consideration consisting solely of capital stock of the same
class of the Borrower) or of any warrants, rights or options to acquire
or any securities convertible into or exchangeable for any capital
stock of the Borrower, except that the Borrower may make cash payments
for open market or privately negotiated stock repurchases in order to
satisfy obligations to employees under the Borrower's Employee Payroll
Deduction Stock Purchase Plan, as originally adopted by the Borrower's
Board of Directors, but without regard to any subsequent increase in
the number of shares covered by such Plan or any increase in the
Borrower's percentage matching contribution contained in such Plan, if
(i) no Default under section 10.1(a) or Event of Default shall have
occurred and be continuing at the time of declaration or payment
thereof, and (ii) after giving effect thereto the Borrower will be in
compliance with section 9.11.
1.5. Certain Acquisitions. For the avoidance of doubt, the Lenders and
the Administrative Agent hereby confirm and agree that the Borrower's
acquisitions of Computer Showcase, Inc. and Minnesota Western, Inc. have been
completed in accordance with all applicable financial reporting and
other requirements contained in section 9.2 and elsewhere in the Credit
Agreement which are applicable to the making of an Acquisition.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants as follows:
2.1. Authorization, Validity and Binding Effect. This Amendment has
been duly authorized by all necessary corporate action on the part of the
Borrower, has been duly executed and delivered by a duly authorized officer or
officers of the Borrower, and constitutes the valid and binding agreement of the
Borrower, enforceable against the Borrower in accordance with its terms.
2.2. Representations and Warranties True and Correct. The
representations and warranties of the Borrower contained in the Credit
Agreement, as amended hereby, are true and correct on and as
of the date hereof as though made on and as of the date hereof, except to the
extent that such representations and warranties expressly relate to a specified
date, in which case such representations and warranties are hereby reaffirmed as
true and correct when made.
2.3. No Event of Default, etc. No condition or event has occurred or
exists which constitutes or which, after notice or lapse of time or both, would
constitute an Event of Default.
2.4. Compliance. The Borrower is in full compliance with all covenants
and agreements contained in the Credit Agreement, as amended hereby.
2.5. Financial Statements, etc. The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of (i) the
audited consolidated balance sheets of the Borrower and its consolidated
subsidiaries as of December 31, 1997, and December 31, 1996, and the related
audited consolidated statements of income, shareholders' equity, and cash flows
for the fiscal years then ended, accompanied by the unqualified report thereon
of the Borrower's independent accountants, as contained in the Form 10-K Annual
Report of the Borrower filed with the SEC; and (ii) the unaudited condensed
consolidated balance sheets of the Borrower and its consolidated subsidiaries as
of March 31, 1998, and the related unaudited condensed consolidated statements
of income and of cash flows of the Borrower and its consolidated subsidiaries
for the fiscal quarter then ended, as contained in the Form 10-Q Quarterly
Report of the Borrower filed with the SEC. All such financial statements have
been prepared in accordance with GAAP, consistently applied (except as stated
therein), and fairly present the financial position of the Borrower and its
consolidated subsidiaries as of the respective dates indicated and the
consolidated results of their operations and cash flows for the respective
periods indicated, subject in the case of any such financial statements which
are unaudited, to normal audit adjustments, none of which will involve a
Material Adverse Effect.
SECTION 3. EFFECTIVENESS.
This Amendment shall become effective on and as of the date (the
"Effective Date"), on or before May 31, 1998 if the following conditions are
satisfied:
(a) this Amendment shall have been executed by the Borrower
and the Administrative Agent, and counterparts hereof as so executed
shall have been delivered to the Administrative Agent;
(b) the Acknowledgment and Consent appended hereto shall
have been executed by the Credit Parties named therein, and
counterparts hereof as so executed shall have been delivered to the
Administrative Agent;
(c) the Administrative Agent shall have been notified by all
of the Lenders that such Lenders have executed this Amendment (which
notification may be by facsimile or other written confirmation of such
execution); and
(d) the Borrower shall have duly executed and delivered to the
Administrative Agent for the Lenders new Notes reflecting the revised
Commitments provided for in this Amendment.
The Administrative Agent shall notify the Borrower and each Lender in writing
of the effectiveness hereof.
SECTION 4. RATIFICATIONS.
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Credit
Agreement, and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.
SECTION 5. MISCELLANEOUS.
5.1. Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the Borrower, each Lender and the Administrative Agent
and their respective permitted successors and assigns.
5.2. Survival of Representations and Warranties. All representations
and warranties made in this Amendment shall survive the execution and delivery
of this Amendment, and no investigation by the Administrative Agent or any
Lender or any subsequent Loan or issuance of a Letter of Credit shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them.
5.3. Reference to Credit Agreement. The Credit Agreement and any and
all other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall mean
a reference to the Credit
Agreement as amended hereby.
5.4. Expenses. As provided in the Credit Agreement, but without
limiting any terms or provisions thereof, the Borrower agrees to pay on demand
all costs and expenses incurred by the Administrative Agent in connection with
the preparation, negotiation, and execution of this Amendment, including without
limitation the costs and fees of the Administrative Agent's special legal
counsel, regardless of whether this Amendment becomes effective in accordance
with the terms hereof, and all costs and expenses incurred by the Administrative
Agent or any Lender in connection with the enforcement or preservation of any
rights under the Credit Agreement, as amended hereby.
5.5. Severability. Any term or provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
5.6. Applicable Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of Ohio.
5.7. Headings. The headings, captions and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
5.8. Entire Agreement. This Amendment is specifically limited to the
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit Agreement.
5.9. Counterparts. This Amendment may be executed by the parties hereto
separately in one or more counterparts, each of which when so executed shall be
deemed to be an original, but all of which when taken together shall constitute
one and the same agreement.
[The balance of this page is intentionally blank.]
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
as of the date first above written.
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MIAMI COMPUTER SUPPLY CORPORATION KEY CORPORATE CAPITAL INC.
By: By:
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Title: Title:
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NATIONAL CITY BANK, PNC BANK, NATIONAL ASSOCIATION
individually and as (succesor to PNC Bank, Ohio, N.A.)
Administrative Agent (as
successor to National City
Bank, Dayton)
By: By:
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Vice President Title:
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ACKNOWLEDGMENT AND CONSENT
For the avoidance of doubt, and without limitation of the intent and
effect of sections 6 and 10 of the Subsidiary Guaranty (as such term is defined
in the Credit Agreement referred to in the Amendment No. 2 to Credit Agreement
(the "Amendment"), to which this Acknowledgment and Consent is appended), each
of the undersigned hereby unconditionally and irrevocably (i) acknowledges
receipt of a copy of the Credit Agreement and the Amendment, and (ii) consents
to all of the terms and provisions of the Credit Agreement as amended by the
Amendment.
Capitalized terms which are used herein without definition shall have
the respective meanings ascribed thereto in the Credit Agreement referred to
herein. This Acknowledgment and Consent is for the benefit of the Lenders and
the Administrative Agent, any other person who is a third party beneficiary of
the Subsidiary Guaranty, and their respective successors and assigns. No term or
provision of this Acknowledgment and Consent may be modified or otherwise
changed without the prior written consent of the Administrative Agent, given as
provided in the Credit Agreement. This Acknowledgment and Consent shall be
binding upon the successors and assigns of each of the undersigned. This
Acknowledgment and Consent may be executed by any of the undersigned in separate
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has duly executed and
delivered this Acknowledgment and Consent as of the date of the Amendment
referred to herein.
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DIVERSIFIED DATA PRODUCTS, INC. BRITCO, INC.
By: By:
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Title: Title:
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FORCE 4 D. P. SUPPLIES, INC. MINNESOTA WESTERN, INC.
By: By:
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Title: Title:
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NTI DATA PRODUCTS, INC. COMPUTER SHOWCASE, INC.
By: By:
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Title: Title:
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ANNEX I
INFORMATION AS TO LENDERS
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Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
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National City National City Bank National City Bank
Bank General 0 Xxxxx Xxxx Xxxxxx 0 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx Xxxxxx, Xxxx 00000 Xxxxxx, Xxxx 00000
Commitment:
Contacts/ Notification Methods:
$20,000,000 National City Bank
0 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxx 00000
Swing Line Xxxx X. Xxxxxx
Revolving Vice President
Commitment: Direct Dial: (000) 000-0000
Facsimile: (000) 000-0000
$3,000,000
Agency Services (Billing and General
Inquiries and to receive copies of financial
Term Loan information):
Commitment: Xxxxxxxx X. Xxxxxxxxx
Assistant Vice President
$ -0- National City Bank
Locator Code #2104
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxxx X. Djucik
Money Desk Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Letters of Credit:
Xxxxx X. Lanzalco
Letter of Credit Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Information:
National City Bank
ABA # 041 000 124
Ref.: Miami Computer Supply Corporation
Attention: Commercial Loan Operations
National City Bank, Dayton
ABA # 042 200 279
Ref.: Miami Computer Supply Corporation
Attention: Commercial Loan Operations
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Key Corporate Key Corporate Capital Inc. Key Corporate Capital Inc.
Capital Inc. General 000 Xxxxxx Xxxxxx 000 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxxxx, Xxxx 00000 Xxxxxxxxx, Xxxx 00000
Commitment:
Contacts/Notification Methods:
$15,000,000 Xxxxxxx X. Xxxxx
Vice President
KeyStructured Finance
Term Loan Telephone: (000) 000-0000
Commitment: Facsimile: (000) 000-0000
$ -0- Xxx Xxxxx
Senior Vice President
KeyStructured Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxxxxxx ("Xxxxx") Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Payment Instructions:
KeyBank
ABA # 041 000 1039
Attention: Commercial Loan Operations
Reference: Miami Computer Supply
Corporation (wire info for L/Cs: must direct
to International Operations--Attn.: Xxxxxx
Xxxxx; ref: Miami Computer Supply)
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PNC Bank, National PNC Bank, National Association PNC Bank, National Association
Association General 000 Xxxx 0xx Xxxxxx 000 Xxxx 0xx Xxxxxx
Xxxxxxxxx Xxxxxxxxxx, Xxxx 00000-0000 Xxxxxxxxxx, Xxxx 00000-0000
Commitment:
Contacts/Notification Methods:
$15,000,000 Xxxxxxx X. Xxxxxx
Vice President
Corporate Banking
Term Loan Telephone: (000) 000-0000
Commitment: Facsimile: (000) 000-0000
$ -0- Xxxxxxx X. Xxxxxxx
Relationship Associate
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Contact for Borrowings, Payments, etc.:
Xxxxx Xxxxxxxxxx
Admin. Coordinator
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Letter of Credit Contact:
Xxxxxx Xxxx
Trade Services
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Payment Instructions:
ABA # 042 000 398
Attention: Commercial Loan Operations
Reference: Miami Computer Supply
Corporation
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