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Exhibit 10.3
AMENDMENT TO GUARANTEE AGREEMENT
THIS AMENDMENT TO GUARANTEE AGREEMENT (this "AMENDMENT"),
dated as of this 21st day of November, 1996, is entered into by and among BLACK
BOX CORPORATION, a Delaware corporation (formerly known as MB Communications,
Inc.; the "GUARANTOR") and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
("PRUDENTIAL"), THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
("EQUITABLE"), EQUITABLE VARIABLE LIFE INSURANCE COMPANY ("EQUITABLE/V") and
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, ("MASSMUTUAL," and together with
Prudential, Equitable and Equitable/V, the "NOTEHOLDERS").
W I T N E S S E T H :
WHEREAS, Black Box Corporation of Pennsylvania, a Delaware
corporation (formerly known as Black Box Corporation; the "COMPANY"), pursuant
to those certain separate Note Agreements, each dated as of May 6, 1994 (as
such agreements are amended, supplemented or otherwise modified, the "NOTE
AGREEMENTS"), issued and sold to the purchasers named therein $40,000,000 in
aggregate principal amount of its 8.81% Senior Notes due May 6, 1999 (the
"NOTES");
WHEREAS, the proceeds of the Notes were loaned to the
Guarantor to enable the Guarantor to repay certain indebtedness of the
Guarantor;
WHEREAS, to secure the repayment of the Notes, the Guarantor
entered into that certain Guarantee Agreement, dated as of May 6, 1994, in
favor of and for the benefit each of the holder of any Notes (the "GUARANTEE");
WHEREAS, in connection with the organization by the Guarantor
of BBox Holding Company, a Delaware corporation and Wholly-Owned Subsidiary of
the Guarantor (the "HOLDING COMPANY GUARANTOR") and the contribution by the
Guarantor to the Holding Company Guarantor of 100% of the outstanding capital
stock of the Company (the "RESTRUCTURING"), the Guarantor has requested, and
the Noteholders have agreed to consent to, certain modifications of the
Guarantee pursuant to Section 6.1 thereof; and
WHEREAS, in connection with the Restructuring, the Company
and the Noteholders are entering into that certain Second Modification of Note
Purchase Agreements, dated as of November 21, 1996 (the "SECOND MODIFICATION");
and
WHEREAS, the Guarantee provides that it may be amended (other
than to make certain types of modifications not requested by the Guarantor)
with the consent of not less than two-thirds in aggregate principal amount of
the Notes at any time outstanding under the Note Agreements; and
WHEREAS, Prudential, Equitable, Equitable/V and MassMutual
are, on the date hereof, the holders of 100% of the aggregate principal amount
of the Notes outstanding under the Agreements; and
WHEREAS, as a condition precedent to the effectiveness of the
Second Modification, the Noteholders have requested, among other things, that
the Guarantor execute and deliver this Amendment for the benefit of the Company
and the Noteholders; and
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NOW THEREFORE, for value received, to satisfy one of the
conditions precedent to the effectiveness of the Second Modification, to induce
the Noteholders to enter into the Second Modification, to induce any Transferee
to accept the transfer of all or any part of any Note, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor agrees as follows:
1. DEFINITIONS. Unless the context otherwise requires,
capitalized terms used and not otherwise defined in this Amendment shall have
the meanings assigned to them in the Guarantee.
2. AMENDMENTS TO GUARANTEE AGREEMENT.
The Guarantor and the Noteholders agree to the following
Amendments:
(a) Section 1.1 of the Guarantee is amended to add the
following definitions thereto:
"HOLDING COMPANY GUARANTOR" shall mean BBox Holding Company,
a Delaware corporation.
"HOLDING COMPANY GUARANTEE AGREEMENT" shall mean that certain
Guarantee Agreement dated as of November 21, 1996, made by the Holding Company
Guarantor in favor of the Noteholders, as amended, modified or supplemented
from time to time.
(b) The definition of "Consolidated Net Income Available for
Stock Payments" in Section 1.1 of the Guarantee is amended in its entirety to
read as follows:
"CONSOLIDATED NET INCOME AVAILABLE FOR STOCK PAYMENTS " shall
mean, with respect to any fiscal year, (i) 50% of Adjusted Consolidated Net
Income for the immediately preceding fiscal year if the Guarantor had positive
Adjusted Consolidated Net Income in such immediately preceding fiscal year, or
(ii) zero if the Guarantor had negative Adjusted Consolidated Net Income in
such immediately preceding fiscal year.
(c) Section 3.11 of the Guarantee is amended in its entirety
to read as follows:
SECTION 3.11 CONSOLIDATED TAX RETURN. The Guarantor covenants
that it will not, and will 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 Company, the Guarantor, the Holding Company Guarantor and their
respective Subsidiaries.
(d) Section 4.1 of the Guarantee is amended in its entirety
to read as follows:
SECTION 4.1 CONSOLIDATED NET WORTH. The Guarantor will not
permit the Consolidated Net Worth of the Guarantor at any time to 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 March
31, 1997, by an amount equal to 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.
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(e) Section 4.2 of the Guarantee is amended in its entirety
to read as follows:
SECTION 4.2 CASH FLOW OF THE GUARANTOR. The Guarantor will
not permit, as of the last date of each fiscal quarter, the ratio of (a)
Consolidated Net Income of the Guarantor and its consolidated Subsidiaries plus
the amortization expense of the Guarantor and its consolidated Subsidiaries
related to intangible assets 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
generally accepted accounting principles, to be less than .25 to 1.
(f) Section 4.3 of the Guarantee is amended in its entirety
to read as follows:
SECTION 4.3 INDEBTEDNESS TO TOTAL CAPITALIZATION. The
Guarantor will not permit the ratio of Indebtedness of the Guarantor and its
Subsidiaries to Adjusted Total Capitalization to be greater than (a) 60% during
the period from April 1, 1996, through March 31, 1997, and (b) 55% from and
after April 1, 1997.
(g) Section 4.5 of the Guarantee is amended to add the
following new clauses (ii) and clause (iii) thereto immediately following
clause (i) and to renumber clauses (ii) and (iii) thereto as clauses (iv) and
(v):
(ii) subject to Section 4.18, the Bank Credit Agreement;
(iii) the Holding Company Guarantee Agreement;
(h) Section 4.8 of the Guarantee is amended in its entirety
to read as follows:
SECTION 4.8 CAPITAL EXPENDITURES. The Guarantor will not, and
will 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 and subject to compliance, to the extent applicable, with
the additional restrictions contained in paragraph 6 of the Note Agreements.
(i) Clause (ii)(a) of Section 4.9 of the Guarantee is amended
in its entirety to read as follows:
a) subject, to the extent applicable, to compliance with
paragraph 6 of the Note Agreements, 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 Company from the Guarantor to the Holding Company
Guarantor; and
(j) Section 4.17 of the Guarantee is amended in its entirety
to read as follows:
SECTION 4.17 STOCK PAYMENTS. The Guarantor covenants that it
will not, and will not permit any of its Subsidiaries to, make, directly or
indirectly, any Stock Payment unless (a) no Default or Event of Default exists
or would result therefrom or (b) immediately after giving effect to such
proposed Stock Payment, the aggregate amount of all Stock Payments for any
fiscal
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year, beginning with the fiscal year ending March 31, 1997, would not
exceed Consolidated Net Income Available for Stock Payments for such fiscal
year.
2. SCHEDULES AND EXHIBITS. Schedules 5.1-1 and 5.1-2 to the
Guarantee Agreement are hereby replaced by Schedules 5.1-1 and 5.1-2 attached
to this Amendment.
3. INDUCING REPRESENTATIONS AND WARRANTIES. The Guarantor
represents and warrants to each Noteholder as follows:
(a) This Amendment and the consent of the Guarantor to the
Modification to Note Purchase Agreements dated as of November 21, 1996 between
the Company and the Noteholders (the "CONSENT") and the consent of the
Guarantor to the Second Modification (the "SECOND CONSENT") have each been duly
authorized by all necessary corporate action on the part of the Guarantor. Each
of this Amendment, the Consent and the Second Consent, when executed and
delivered by the Guarantor will constitute, the legal, valid and binding
obligations of the Guarantor enforceable against the Guarantor in accordance
with its respective terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and (ii) general principles of equity, (regardless of whether such
enforceability is considered in a proceeding in equity or at law). No further
consent of any other Person is required for the execution, delivery and
performance of this Amendment and the Consent.
(b) The execution, delivery and performance by the Guarantor
of this Amendment, the Consent and the Second Consent will not (i) contravene,
result in any breach of, or constitute a default under, or result in the
creation of any Lien in respect of any property of the Guarantor or any
Subsidiary under, any indenture, mortgage, deed of trust, bank loan or credit
agreement, corporate charter or by-laws, or any other agreement or instrument
to which the Guarantor or any Subsidiary is bound or by which the Guarantor or
any Subsidiary or any of their respective properties may be bound or affected,
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator
or Governmental Authority applicable to the Guarantor or any Subsidiary or
(iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Guarantor or any Subsidiary.
(c) No consent, approval or authorization of, or
registration, filing or declaration with any Governmental Authority is required
in connection with the execution, delivery or performance by the Guarantor of
this Amendment or the Consent.
4. This Amendment shall become effective when and only when
each of the conditions in paragraph 4 of the Second Modification has been
satisfied.
5. This Amendment shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws
of the State of New York.
6. This Amendment may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one instrument.
7. Except as specifically amended by this Agreement, the
Guarantee shall remain in full force and effect and is hereby ratified and
confirmed in all respects.
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IN WITNESS WHEREOF, this Amendment has been duly executed by
the Guarantor as of the date first above written.
BLACK BOX CORPORATION
By: /s/ XXXXXXXXX X. XXXXX
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Title: Vice President
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ACKNOWLEDGMENT OF CORPORATION
COMMONWEALTH OF PENNSYLVANIA )
) SS.
COUNTY OF ALLEGHENY )
The foregoing instrument was acknowledged before me this 20th
day of November, 1996, by Xxxxxxxxx X. Xxxxx, the Secretary of Black Box
Corporation on behalf of the corporation.
/s/ XXXXXX X. XXXXXXX
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Notary Public
My commission expires:
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Acknowledged and agreed to in Newark, New Jersey as of this 21ST day
of November, 1996:
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By: /s/ XXXXX X. XXXXXX
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Title: VICE PRESIDENT
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Acknowledged and agreed to in New York, New York, as of this 18TH day
of November, 1996:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
By: /s/ XXXX XXXXXXXXXXX
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Title: INVESTMENT OFFICER
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Acknowledged and agreed to in New York, New York, as of this 18TH day
of November, 1996:
EQUITABLE VARIABLE LIFE INSURANCE
COMPANY
By: /s/ XXXX XXXXXXXXXXX
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Title: INVESTMENT OFFICER
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Acknowledged and AGREED TO IN SPRINGFIELD, MASSACHUSETTS, AS OF THIS
21ST NOVEMBER, 1996:
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
BY: /s/ XXXX X. XXXXX
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TITLE: MANAGING DIRECTOR
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SCHEDULE 5.1-1
SUBSIDIARIES
(See Attached)
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SCHEDULE 5.1-2
PARTNERSHIP AND JOINT VENTURE INTERESTS
(See Attached)
