EXHIBIT 10.3
FIFTH AMENDMENT AND CONSENT TO CREDIT AGREEMENT
This Fifth Amendment and Consent to Credit Agreement, dated as of July 29,
2004 (this "Amendment"), is entered into by and among WESCO DISTRIBUTION, INC.
("Borrower"); the other Credit Parties signatory hereto; GENERAL ELECTRIC
CAPITAL CORPORATION, as a Lender, and as Agent for Lenders (in such capacity,
"Agent"); and the other Lenders.
RECITALS
WHEREAS, Borrower, the other Credit Parties signatory thereto, Agent and
Lenders are parties to that certain Credit Agreement, dated as of March 19,
2002, (as amended by Amendment No. 1 to Credit Agreement, dated as of September
30, 2002, the Second Amendment and Consent, dated as of December 2, 2002, the
Third Amendment to Credit Agreement, dated as of December 9, 2002, and the
Fourth Amendment and Consent to Credit Agreement, dated as of March 28, 2003,
and as hereafter further amended, restated or otherwise modified, the "Credit
Agreement");
WHEREAS, Borrower and the other Credit Parties desire to effect a
reorganization of certain of the Canadian Credit Parties (items (A)-(DD) below
are collectively referred to as the "Canadian Reorganization") whereby the
following will occur:
(A) WESCO Distribution-Canada, Inc. ("WESCO Canada") shall be continued
as a corporation organized under the laws of Nova Scotia;
(B) WESCO Canada shall form a new wholly-owned Canadian subsidiary,
which shall be a Nova Scotia limited liability company ("Canada
Newco");
(C) WESCO Canada shall form a new wholly-owned Canadian subsidiary,
which shall be a Nova Scotia unlimited liability company ("Canco
2");
(D) A new entity in the form of an Ontario limited partnership ("WESCO
Canada LP") shall be formed, and Canco 2 shall contribute cash in an
aggregate amount not to exceed $100.00 to WESCO Canada LP in
exchange for a 1% partnership interest in WESCO Canada LP; and WESCO
Canada shall contribute cash to WESCO Canada LP in exchange for a
99% partnership interest in WESCO Canada LP;
(E) Canco 2 shall issue shares of its common stock to its sole
shareholder, WESCO Canada in exchange for cash consideration in an
aggregate amount not to exceed $2,000,000 equal in value to
approximately 1% of the value of WESCO Canada;
(F) WESCO Canada shall contribute substantially all of its assets
(including cash) and liabilities to WESCO Canada LP in exchange for
approximately 99% of the partnership interests in WESCO Canada LP on
a fully diluted basis;
(G) Canco 2 shall contribute cash to WESCO Canada LP in exchange for
approximately 1% of the partnership interests in WESCO Canada LP on
a fully diluted basis;
(H) Each of WESCO Canada and Canada Newco shall amalgamate to form WESCO
Distribution Canada Co. ("WESCO ULC"), a Nova Scotia unlimited
liability company;
(I) WESCO Canada LP shall pay all accrued interest due and owing to
WESCO Canada Finance Limited Partnership ("WESCO Canada Finance")
pursuant to the existing intercompany loan from WESCO Canada Finance
to WESCO Canada LP;
(J) WESCO Equity Corporation ("WESCO Equity") shall form a new
wholly-owned subsidiary in the form of a Nova Scotia unlimited
liability company ("WESCO ULC 2");
(K) WESCO Equity shall contribute all of its partnership interest in
WESCO Canada Finance to WESCO ULC 2; in exchange for additional
shares of common stock of WESCO ULC 2;
(L) WESCO Finance Corp. ("WESCO Finance") shall form a new wholly-owned
subsidiary in the form of a Nova Scotia unlimited liability company
("WESCO ULC 3");
(M) WESCO Finance shall contribute all of its partnership interest in
WESCO Canada Finance to WESCO ULC 3 in exchange for additional
shares of common stock of WESCO ULC 3;
(N) WESCO ULC 3 shall contribute all of its partnership interest in
WESCO Canada Finance to WESCO Canada LP in exchange for an
additional partnership interest (of equivalent value) in WESCO
Canada LP;
(O) Borrower shall extend an intercompany loan to WESCO Canada LP in an
amount equal to the difference between the available cash on hand of
WESCO Canada LP and the amount of that certain existing intercompany
loan owing to WESCO Canada Finance;
(P) WESCO Canada LP shall repay in full the existing intercompany loan
owing to WESCO Canada Finance;
(Q) WESCO ULC 2 shall contribute its .1% general partnership interest in
WESCO Canada Finance to WESCO Canada LP in exchange for an
additional partnership interest (of equivalent value) in WESCO
Canada LP;
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(R) WESCO Canada Finance shall be dissolved and shall distribute its
assets to the sole owner of its partnership interests, WESCO Canada
LP;
(S) WESCO Canada LP shall repay in full the existing intercompany loan
from Borrower extended pursuant to clause (O) above;
(T) Borrower shall form a new wholly owned direct subsidiary, which
shall be a corporation organized under the laws of the State of
Delaware ("US Newco");
(U) Borrower shall contribute all of the issued and outstanding shares
of WESCO ULC owned by Borrower to US Newco in exchange for
additional shares of US Newco common stock of which 21% will be
shares of non-voting common stock and 79% will be shares of voting
common stock;
(V) WESCO Finance shall contribute all of the issued and outstanding
shares of WESCO ULC 3 owned by WESCO Finance to US Newco in exchange
for additional shares of voting common stock of US Newco (of
equivalent value);
(W) WESCO Equity shall contribute all of the issued and outstanding
shares of WESCO ULC 2 owned by WESCO Equity to US Newco in exchange
for additional shares of voting common stock of US Newco (of
equivalent value);
(X) WESCO ULC shall contribute a portion of its partnership interest in
WESCO Canada LP to Canco 2 in exchange for additional shares of
common stock of Canco 2;
(Y) Canco 2 shall be converted from a Nova Scotia unlimited liability
company into a Nova Scotia limited liability company;
(Z) WESCO Receivables Corp. ("WESCO Receivables") shall recapitalize its
capital stock into 100,000 shares of common stock, consisting of
1,000 shares of Class A Common Stock and 99,000 shares of Class B
Common Stock (the "Class B Stock"). The existing shares of common
stock of WESCO Receivables held by Borrower will be converted into
1,000 shares of Class A Common Stock and 99,000 shares of Class B
Stock;
(AA) Borrower shall contribute all of the shares of Class B Stock of
WESCO Receivables owned by Borrower to US Newco, in exchange for
additional shares of US Newco common stock of which 21% will be
shares of voting common stock and 79% will be shares of non-voting
common stock;
(BB) US Newco shall contribute to WESCO ULC (i) a portion of the shares
of Class B Stock of WESCO Receivables owned by US Newco, (ii) all of
the shares of WESCO ULC 3 owned by US Newco, and (iii) all of the
shares of WESCO ULC 2 owned by US Newco, in exchange for shares of
common stock of WESCO ULC;
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(CC) WESCO ULC, WESCO ULC 2 and WESCO ULC 3 shall amalgamate and continue
as WESCO Distribution Canada Co. ("WESCO DC"); and
(DD) US Newco shall sell certain of the shares of Class B Stock of WESCO
Receivables then owned by US Newco to WESCO DC in exchange for a
promissory note issued by WESCO DC to US Newco that will pay cash
interest in an aggregate annual amount not to exceed $12,000,000
(the "WESCO DC Note").
WHEREAS, Agent and Lenders are willing to consent to the Canadian
Reorganization on and subject to the terms and conditions set forth herein;
WHEREAS, Borrower, the other Credit Parties, Agent and Lenders are each
desirous of entering into certain related amendments to the Credit Agreement as
and to the extent set forth in this Amendment and subject to the terms and
conditions set forth herein; and
WHEREAS, this document shall constitute a Loan Document and these Recitals
shall be construed as part of this Amendment;
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and of the Revolving Credit Advances and other extensions
of credit heretofore, now or hereafter made to, or for the benefit of, Borrower
by Lenders and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, Borrower, the other
Credit Parties, Agent and Lenders hereby agree as follows:
1. Definitions. Except to the extent otherwise specified herein,
capitalized terms used in this Amendment shall have the same meanings ascribed
to them in the Credit Agreement and Annex A thereto.
2. Consents, Agreements and Covenants.
(a) Canadian Reorganization. Notwithstanding any provision contained
in the Credit Agreement or other Loan Documents to the contrary, Agent and
Lenders hereby consent to the Canadian Reorganization; provided, that, (i) the
documentation for the Canadian Reorganization is in form and substance
reasonably acceptable to Agent; (ii) upon its formation, US Newco shall become a
party to the Credit Agreement as a Credit Party; (iii) upon its formation, US
Newco shall become a Grantor under the Security Agreement; (iv) upon its
formation, US Newco shall enter into a pledge agreement in form and substance
satisfactory to Agent pursuant to which US Newco shall pledge, among other
things, the stock of WESCO DC (upon the issuance of its stock) owned by US
Newco, the stock of WESCO ULC (upon the issuance of its stock) owned by US
Newco, the stock of WESCO ULC 2 (upon the issuance of its stock) owned by US
Newco, the stock of WESCO ULC 3 (upon the issuance of its stock) owned by US
Newco, the shares of Class B Stock of WESCO Receivables owned by US Newco and
the WESCO DC Note held by US Newco to Agent, on behalf of itself and Lenders,
which WESCO DC Note shall serve as Collateral and shall be subordinated to the
Obligations on terms and conditions satisfactory to Agent; (v) Borrower shall
enter into an amendment to the
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Borrower Pledge Agreement whereby it shall pledge to Agent, on behalf of itself
and Lenders, all of the capital stock of US Newco owned by Borrower, all of the
capital stock of WESCO ULC (upon the issuance of its stock) owned by Borrower,
all of the shares of Class B Stock of WESCO Receivables owned by Borrower and
the Intercompany Note from WESCO Canada LP in favor of Borrower, which Note
shall serve as Collateral and shall be subordinated to the Obligations on terms
and conditions satisfactory to Agent; (vi) upon its formation, Canco 2 shall
become a party to the Credit Agreement as a Credit Party; (vii) upon its
formation, Canco 2 shall become a Grantor under the Security Agreement; (viii)
upon its formation, Canco 2 shall enter into a pledge agreement in form and
substance satisfactory to Agent; (ix) WESCO Canada shall enter into an amendment
to the WESCO Canada Pledge Agreement whereby it shall pledge to Agent, on behalf
of itself and Lenders, all of the shares of common stock of each of Canada Newco
(upon the issuance of its shares of common stock) and Canco 2 (upon the issuance
of its shares of common stock) owned by WESCO Canada; (x) upon its formation,
WESCO Canada LP shall become a party to the Credit Agreement as a Credit Party;
(xi) upon its formation, WESCO Canada LP shall become a Grantor under the
Security Agreement; (xii) upon its formation, WESCO Canada LP shall enter into a
pledge agreement in form and substance satisfactory to Agent; (xiii) upon its
formation, WESCO ULC shall become a party to the Credit Agreement as a Credit
Party; (xiv) upon its formation, WESCO ULC shall become a Grantor under the
Security Agreement; (xv) upon its formation, WESCO ULC shall enter into a pledge
agreement in form and substance satisfactory to Agent pursuant to which WESCO
ULC shall pledge, among other things, the shares of Class B Stock of WESCO
Receivables owned by WESCO ULC, the partnership interest of WESCO Canada LP
(upon the issuance of its partnership interests) owned by WESCO ULC, the shares
of common stock of Canco 2 (upon the issuance of its shares of common stock)
owned by WESCO ULC, the stock of WESCO ULC 2 (upon the issuance of its stock)
owned by WESCO ULC, and the stock of WESCO ULC 3 (upon the issuance of its
stock) owned by WESCO ULC to Agent, on behalf of itself and Lenders; (xvi) upon
its formation, WESCO DC shall become a party to the Credit Agreement as a Credit
Party; (xvii) upon its formation, WESCO DC shall become a Grantor under the
Security Agreement; (xviii) upon its formation, WESCO DC shall enter into a
pledge agreement in form and substance satisfactory to Agent pursuant to which
WESCO DC shall pledge, among other things, the shares of Class B Stock of WESCO
Receivables owned by WESCO DC, the partnership interest of WESCO Canada LP (upon
the issuance of its partnership interests) owned by WESCO DC and the shares of
common stock of Canco 2 (upon the issuance of its shares of common stock) owned
by WESCO DC to Agent, on behalf of itself and Lenders; (xix) upon its formation,
WESCO ULC 2 shall become a party to the Credit Agreement as a Credit Party; (xx)
upon its formation, WESCO ULC 2 shall become a Grantor under the Security
Agreement; (xxi) upon its formation, WESCO ULC 2 shall enter into a pledge
agreement in form and substance satisfactory to Agent pursuant to which WESCO
ULC 2 shall pledge, among other things, the partnership interests of WESCO
Canada Finance owned by WESCO ULC 2 to Agent, on behalf of itself and Lenders;
(xxii) upon its formation, WESCO ULC 3 shall become a party to the Credit
Agreement as a Credit Party; (xxiii) upon its formation, WESCO ULC 3 shall
become a Grantor under the Security Agreement; (xxiv) upon its formation, WESCO
ULC 3 shall enter into a pledge agreement in form and substance satisfactory to
Agent pursuant to which WESCO ULC 3 shall pledge, among other things, the
partnership interests of WESCO Canada LP (upon the issuance of its partnership
interests) owned by WESCO ULC 3 to Agent, on behalf of itself and Lenders; (xxv)
upon its formation, Canada Newco shall become a party to the Credit
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Agreement as a Credit Party; (xxvi) upon its formation, Canada Newco shall grant
a security interest in all of its assets to Agent, for the benefit of itself and
Lenders; (xxvii) upon its formation, Canada Newco shall enter into a pledge
agreement in form and substance satisfactory to Agent; (xxviii) all conditions
set forth in Section 4 hereof shall be satisfied in form and substance
satisfactory to Agent; and (xxix) at any time and from time to time, upon the
written request of Agent and at the sole expense of Borrower, Borrower and/or
any other Credit Party shall promptly and duly execute and deliver any and all
such UCC financing statements, PPSA financing statements, agreements,
instruments and documents and take such further actions as Agent may deem
necessary or desirable to effectuate the foregoing intents and purposes.
(b) Security Documents. The consent set forth in Section 2(a) above
is subject to the further condition that Agent shall receive, in form and
substance satisfactory to Agent and at the times for delivery specified below,
each of the following documents, fully executed by all parties thereto: (i) upon
their formation, a Security Agreement pursuant to which each of Canco 2, WESCO
Canada LP, WESCO ULC, WESCO ULC 2, WESCO ULC 3 and Canada Newco shall grant to
Agent, for the benefit of itself and Lenders, a security interest in all of
their respective assets; (ii) upon its formation, a joinder to the Security
Agreement pursuant to which US Newco shall become a Grantor under the Security
Agreement; (iii) upon its formation, a Guaranty executed by US Newco in favor of
Agent and Lenders with respect to the Obligations; (iv) upon their formation, a
Guaranty executed by each of Canco 2, WESCO Canada LP, WESCO ULC, WESCO ULC 2,
WESCO ULC 3 and Canada Newco in favor of Agent and Lenders in respect of the
Obligations; (v) upon its formation, a pledge agreement pursuant to which US
Newco shall pledge all of its assets, including, without limitation, the stock
of WESCO ULC (upon the issuance of its stock) owned by US Newco, the stock of
WESCO DC (upon the issuance of its stock) owned by US Newco, the shares of
common stock of WESCO ULC 2 owned by US Newco (upon the acquisition of such
shares of common stock by US Newco from WESCO Equity), the shares of common
stock of WESCO ULC 3 owned by US Newco (upon the acquisition of such shares of
common stock by US Newco from WESCO Finance), and immediately upon their
acquisition, the WESCO DC Note (upon the execution of the WESCO DC Note) held by
US Newco and the shares of Class B Stock of WESCO Receivables owned by US Newco,
to Agent, on behalf of itself and Lenders; (vi) upon its formation, a pledge
agreement pursuant to which Canco 2 shall pledge all of its assets, including,
without limitation, the partnership interests in WESCO Canada LP (upon the
issuance of its partnership interests) owned by Canco 2, to Agent, on behalf of
itself and Lenders; (vii) upon its formation, a pledge agreement pursuant to
which WESCO Canada LP shall pledge all of its assets, including, without
limitation, and immediately upon their acquisition, the partnership interests in
WESCO Canada Finance owned by WESCO Canada LP to Agent, on behalf of itself and
Lenders; (viii) upon its formation, a pledge agreement pursuant to which WESCO
ULC shall pledge all of its assets, including, without limitation, the shares of
Class B Stock of WESCO Receivables owned by WESCO ULC, the partnership interests
of WESCO Canada LP (upon the issuance of its partnership interests) owned by
WESCO ULC, and the shares of common stock of Canco 2 (upon the issuance of its
shares of common stock) owned by WESCO ULC to Agent, on behalf of itself and
Lenders; (ix) upon its formation, a pledge agreement pursuant to which WESCO DC
shall pledge all of its assets, including, without limitation, the shares of
Class B Stock of WESCO Receivables owned by WESCO DC, the partnership interests
in WESCO Canada LP (upon the issuance of such partnership interests) owned by
WESCO DC and the shares of common stock of Canco 2 (upon the issuance of its
shares of common stock) owned by
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WESCO DC to Agent, on behalf of itself and Lenders; (x) upon its formation, a
pledge agreement pursuant to which Canada Newco shall pledge all of its assets
to Agent, on behalf of itself and Lenders, effective immediately and
automatically upon the consummation of the transaction described in clause (B)
of the second "Whereas" clause of this Amendment; (xi) an amendment to the WESCO
Canada Pledge Agreement, pledging the shares of common stock of Canada Newco
owned by WESCO Canada, effective immediately and automatically upon the
consummation of the transaction described in clause (B) of the second "Whereas"
clause of this Amendment; (xii) an amendment to the WESCO Canada Pledge
Agreement, pledging the shares of common stock of Canco 2 owned by WESCO Canada,
effective immediately and automatically upon the consummation of the transaction
described in clause (C) of the second "Whereas" clause of this Amendment; (xiii)
an amendment to the WESCO Canada Pledge Agreement, pledging the partnership
interests of WESCO Canada LP owned by Canco 2 and WESCO Canada, effective
immediately and automatically upon the consummation of the transactions
described in clause (D) of the second "Whereas" clause of this Amendment; (xiv)
an amendment to the WESCO Canada Pledge Agreement, pledging the shares of common
stock of Canco 2 owned by WESCO Canada, effective immediately and automatically
upon the consummation of the transaction described in clause (E) of the second
"Whereas" clause of this Amendment; (xv) an amendment to the WESCO Canada Pledge
Agreement, pledging the partnership interests of WESCO Canada LP owned by WESCO
Canada, effective immediately and automatically upon the consummation of the
transaction described in clause (F) of the second "Whereas" clause of this
Amendment; (xvi) an amendment to the Borrower Pledge Agreement, which amendment
shall (I) add the stock of WESCO ULC owned by Borrower, effective immediately
and automatically upon the consummation of the transaction described in clause
(H) of the second "Whereas" clause of this Amendment; (II) add to the Collateral
for the Obligations of the additional stock of US Newco owned by Borrower,
effective immediately and automatically upon the consummation of the transaction
described in clause (T) of the second "Whereas" clause of this Amendment; (III)
add to the Collateral for the Obligations of the shares of Class B Stock of
WESCO Receivables owned by Borrower, effective immediately and automatically
upon the consummation of the transaction described in clause (Z) of the second
"Whereas" clause of this Amendment and (IV) add to the Collateral for the
Obligations of the intercompany note from WESCO Canada LP in favor of Borrower,
effective immediately and automatically upon the consummation of the transaction
described in clause (O) of the second "Whereas" clause of this Amendment; (xvii)
a pledge amendment pursuant to which WESCO Equity shall pledge all of its assets
to Agent, on behalf of itself and Lenders, including, without limitation, the
stock of WESCO ULC 2 owned by WESCO Equity, effective immediately and
automatically upon the consummation of the transaction described in clause (J)
of the second "Whereas" clause of this Amendment; (xviii) a pledge agreement
pursuant to which WESCO ULC 2 shall pledge all of its assets to Agent, on behalf
of itself and Lenders, including, without limitation, the partnership interests
of WESCO Canada Finance owned by WESCO ULC 2, effective immediately and
automatically upon the consummation of the transaction described in clause (K)
of the second "Whereas" clause of this Amendment; (xix) an amendment to the
WESCO Finance Pledge Agreement, pledging the stock of WESCO ULC 3 owned by WESCO
Finance, effective immediately and automatically upon the consummation of the
transaction described in clause (L) of the second "Whereas" clause of this
Amendment; (xx) a pledge agreement pursuant to which WESCO ULC 3 shall pledge
all of its assets to Agent, on behalf of itself and Lenders, including, without
limitation, the partnership interests of WESCO Canada LP
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owned by WESCO ULC 3, effective immediately and automatically upon the
consummation of the transaction described in clause (M) of the second "Whereas"
clause of this Amendment; (xxi) an amendment to the WESCO ULC 3 Pledge
Agreement, which amendment shall amend the portion of the partnership interests
of WESCO Canada LP owned by WESCO ULC 3 as pledged to Agent, effective
immediately and automatically upon the consummation of the transaction described
in clause (N) of the second "Whereas" clause of this Amendment; (xxii) an
amendment to the Pledge Agreement of WESCO ULC, effective immediately and
automatically following the consummation of the transaction described in clause
(X) of the second "Whereas" clause of this Amendment, which amendment shall
amend the portion of the partnership interest in WESCO Canada LP, and the
portion of Canco 2 shares owned by WESCO ULC as pledged to Agent; (xxiii) an
amendment to the Pledge Agreement of US Newco, effective immediately and
automatically following the consummation of the transaction described in clause
(DD) of the second "Whereas" clause of this Amendment, which amendment shall
reflect the sale of certain of the shares of Class B Stock of WESCO Receivables
owned by US Newco to WESCO ULC; (xxiv) all UCC financing statements, PPSA
financing statements, endorsements in blank, stock powers endorsed in blank,
original stock certificates, original promissory notes, and other filings,
instruments, agreements and documents which Agent deems necessary or desirable
to perfect Agent's security interests in all of the assets of US Newco; and
(xxv) all PPSA financing statements, endorsements in blank, stock powers
endorsed in blank, original stock certificates, original promissory notes, and
other filings, instruments, agreements and documents necessary or desirable to
perfect Agent's security interests in all of the assets of each of Canco 2;
WESCO Canada LP, WESCO DC, WESCO ULC, WESCO ULC 2, WESCO ULC 3 and Canada Newco.
In the event that any of the foregoing conditions is not, or fails to remain,
satisfied, the consent set forth in Section 2(a) above shall be of no further
force and effect and shall be void ab initio.
(c) Opinion. The consent set forth in Section 2(a) above is subject
to the further condition that, upon completion of the Canadian Reorganization,
Agent shall receive a legal opinion addressed to Agent and each of the Lenders
from United States and Canadian counsel to Borrower and the other Credit
Parties, which legal opinion shall address the Canadian Reorganization, the
matters contemplated by this Amendment including, by way of example, but not of
limitation, the various security agreements and pledge agreements and the
various security interests and liens granted to Agent, on behalf of itself and
Lenders, and such other related matters as Agent may reasonably request, and
which legal opinion shall be in form and substance satisfactory to Agent. In the
event that the recipients of this Section 2(c) are not, or fail to remain,
satisfied, the consent set forth in Section 2(a) above shall be of no further
force and effect and shall be void ab initio.
(d) WESCO DC Note. Notwithstanding any provision contained in the
Credit Agreement or other Loan Documents to the contrary, Agent and Lenders
hereby consent to the issuance of the WESCO DC Note and the payment by WESCO DC
to US Newco of cash interest in respect of such Note in an aggregate annual
amount not to exceed $12,000,000; provided, that, (i) the WESCO DC Note shall be
in form and substance acceptable to Agent, (ii) upon its receipt of any and all
payments of interest in respect of such Note, US Newco shall dividend or
otherwise distribute the entire amount of such payments of interest to Borrower
and (iii) such WESCO DC Note shall be pledged to the Agent, on behalf of itself
and Lenders, as Collateral for the Obligations pursuant to legal documentation
in form and substance satisfactory to Agent.
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(e) Event of Default. If at any time before, during or after
consummation of the Canadian Reorganization Borrower or any other Credit Party
shall fail to observe or fully satisfy any of the requirements and other
provisions set forth in this Section 2, it shall constitute an Event of Default
for all purposes of the Credit Agreement and each other Loan Document.
3. Amendments. The Credit Agreement is amended as follows:
3.1 Section 6.3 (Indebtedness).
(a) Section 6.3 (Indebtedness) of the Credit Agreement is hereby
amended by deleting the word "and" at the end of clause (xix) thereof, changing
current clause (xx) to clause (xxii), and inserting the following clause as new
clause (xx) and clause (xxi):
"(xx) Indebtedness consisting of intercompany loans and advances
made following the Closing Date by US Newco to WESCO DC in an aggregate
principal amount at any time outstanding that shall not exceed
$150,000,000 or the Dollar Equivalent Amount thereof; provided, that: (A)
WESCO DC shall have executed and delivered to US Newco an interest bearing
demand note (which shall be an "Intercompany Note" as defined herein) to
evidence any and all such intercompany Indebtedness owing at any time by
WESCO DC to US Newco, which Intercompany Note shall be in form and
substance satisfactory to Agent and shall be pledged and delivered to
Agent as additional collateral security for the Obligations and shall be
accompanied by an endorsement executed in blank and any other
documentation or other deliveries necessary or desirable to perfect
Agent's security interest in such Intercompany Note; (B) each such Credit
Party shall record all intercompany transactions on its books and records
in a manner satisfactory to Agent; (C) the obligations of WESCO DC under
any such Intercompany Note shall be subordinated to the Obligations
hereunder and under the other Loan Documents in a manner reasonably
satisfactory to Agent; (D) at the time such intercompany loan is made by
US Newco and after giving effect thereto, US Newco and WESCO DC shall each
be Solvent, and (E) no Default or Event of Default shall have then
occurred and be continuing or would occur and be continuing after giving
effect to any such proposed intercompany Indebtedness;
"(xxi) Indebtedness consisting of intercompany loans and advances
made following the Closing Date by Borrower to WESCO Canada LP in an
aggregate principal amount at any time outstanding that shall not exceed
$35,000,000 or the Dollar Equivalent Amount thereof; provided, that: (A)
WESCO Canada LP shall have executed and delivered to Borrower a demand
note (which shall be an "Intercompany Note" as defined herein) to evidence
any and all such intercompany Indebtedness owing at any time by WESCO
Canada LP to Borrower, which Intercompany Note shall be in form and
substance satisfactory to Agent and shall be pledged and delivered to
Agent as additional collateral security for the Obligations and shall be
accompanied by an endorsement executed in blank and any other
documentation or other deliveries necessary or desirable to perfect
Agent's security interest in such Intercompany Note; (B) each such Credit
Party shall record all intercompany transactions on its books and records
in a manner satisfactory to Agent; (C) the obligations of WESCO Canada LP
under any such Intercompany Note shall be subordinated to the Obligations
hereunder and under the
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other Loan Documents in a manner reasonably satisfactory to Agent; (D) at
the time such intercompany loan is made by Borrower and after giving
effect thereto, Borrower and WESCO Canada LP shall each be Solvent, (E) no
Default or Event of Default shall have then occurred and be continuing or
would occur and be continuing after giving effect to any such proposed
intercompany Indebtedness and (F) any such intercompany loan shall be
repaid in full on or prior to the third Business Day following the
effective date of this Fifth Amendment;"
(b) Effective upon consummation of the Canadian Reorganization,
Section 6.3 (Indebtedness) of the Credit Agreement will be amended by amending
restating clause (ix) to read in its entirety as follows:
(ix) Indebtedness consisting of intercompany loans and advances made
by Borrower to WESCO Canada LP; provided, that (A) WESCO Canada LP shall
have executed and delivered to Borrower, a demand note, (the "Intercompany
Note") to evidence any and all such intercompany Indebtedness owing at any
time, which Intercompany Note shall be in form and substance satisfactory
to Agent and shall be pledged and delivered to Agent pursuant to the
applicable Pledge Agreement or Security Agreement as additional collateral
security for the Obligations; (B) Borrower and WESCO Canada LP shall each
record all intercompany transactions on their respective books and records
in a manner satisfactory to Agent; (C) the obligation of WESCO Canada LP
under the Intercompany Note issued by it shall be subordinated to the
Obligations hereunder and under the other Loan Documents in a manner
satisfactory to Agent; (D) at the time any such intercompany loan or
advance is made and after giving effect thereto, each of Borrower, WESCO
Finance, WESCO ULC and WESCO Canada LP shall be Solvent; (E) no Default or
Event of Default would occur and be continuing after giving effect to any
such proposed intercompany loan; (F) the aggregate balance of all such
intercompany loans and advances made by Borrower to WESCO Canada LP shall
not exceed $50,000,000 or the Dollar Equivalent Amount thereof at any one
time outstanding; (G) the recipient of any such intercompany loans shall
be creditworthy, as determined by Agent; and (H) to the extent required by
applicable law, all such loans and advances shall bear interest and all
applicable withholdings shall be deducted and remitted to the applicable
Governmental Authority when due and payable;
3.2 Annex A (Definitions).
(a) Annex A (Definitions) to the Credit Agreement is hereby amended
by adding the following definitions in alphabetical order:
"US Newco" means WDC Holding, Inc., a Delaware corporation.
"WESCO Canada LP" means WESCO Distribution Canada LP, an Ontario limited
partnership.
"WESCO DC" means WESCO Distribution Canada Co., a Nova Scotia unlimited
liability company.
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(b) Annex A (Definitions). Effective upon the consummation of the
Canadian Reorganization, Annex A (Definitions) is amended by changing the
following definition:
"WESCO Canada" means WESCO Canada LP.
3.3 Schedules. Existing Schedules 3.1, 3.2, 3.6, 3.8, 3.18, 3.19 and
3.22 are amended by deleting them in their entirety and replacing them in their
entirety with the attached amended and restated Schedules 3.1, 3.2, 3.6, 3.8,
3.18, 3.19 and 3.22.
4. Conditions Precedent to Effectiveness. The effectiveness of each of the
consents set forth in Section 2 and the amendments set forth in Section 3 hereof
is subject to the satisfaction of each of the following conditions precedent in
a manner acceptable to Agent:
4.1 Agent's receipt of counterparts of this Amendment, duly executed
by the Borrower, the other Credit Parties listed as signatories hereto, Agent
and Lenders.
4.2 No Default or Event of Default shall have occurred and be
continuing or would result from the effectiveness of this Amendment or the
consummation of any of the transactions contemplated thereby.
4.3 The payment by the Borrower to the Administrative Agent, for the
account of Lenders, of an amendment fee in an amount equal to $75,000, to be
distributed pro rata to all Lenders which have timely approved this Amendment,
as evidenced by each such Lender's timely execution and delivery of a
counterpart signature page to this Amendment and based on each Lender's
Commitments immediately prior to the effectiveness of this Amendment.
4.4 Agent shall have received evidence that any and all necessary
approvals and consents to the Canadian Reorganization shall have been obtained,
including, without limitation, any and all necessary approvals, consents and
amendments in connection with the Permitted Receivables Financing, all of which
shall be in form and substance satisfactory to Agent.
4.5 Agent shall have received a legal opinion addressed to Agent and
each of the Lenders from United States and Canadian counsel to Borrower and the
other Credit Parties, which legal opinion shall address the Borrower's and the
other Credit Parties' ability and authority to carry out the Canadian
Reorganization, the matters contemplated by this Amendment and completed as of
the date hereof and such other related matters as Agent may reasonably request,
and which legal opinion shall be in form and substance satisfactory to Agent.
4.6 Agent and Lenders shall have received such other agreements,
instruments and documents as Agent may reasonably request.
5. Reference to and Effect Upon the Credit Agreement and other Loan
Agreements.
5.1 Except for the specific consents provided for in Section 2 above
and the specific amendments set forth in Section 3 above, the Credit Agreement,
the Notes and each
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other Loan Document shall remain in full force and effect and each is hereby
ratified and confirmed.
5.2 The execution, delivery and effect of this Amendment shall be
limited precisely as written and shall not be deemed to (i) be a consent to any
waiver of any term or condition (except for the specific consents in Section 2
above), or to any amendment or modification of any term or condition (except as
specifically amended in Section 3 above), of the Credit Agreement or any other
Loan Document or (ii) prejudice any right, power or remedy which the Agent or
any Lender now has or may have in the future under or in connection with the
Credit Agreement, the Notes or any other Loan Document. Each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or any
other word or words of similar import shall mean and be a reference to the
Credit Agreement as amended hereby, and each reference in any other Loan
Document to the Credit Agreement or any word or words of similar import shall be
and mean a reference to the Credit Agreement as modified hereby.
5.3 Each of US Xxxxx, XXXXX Xxxxxx LP, Canco 2, WESCO DC, WESCO ULC,
WESCO ULC 2, WESCO ULC 3 and Canada Newco is and shall be deemed to be a "Credit
Party" for all purposes under the Credit Agreement and each other Loan Document.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed an original but all
such counterparts shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Amendment by telecopier shall
be as effective as delivery of a manually executed counterpart signature page to
this Amendment.
7. Costs and Expenses. As provided in Section 11.3 of the Credit
Agreement, Borrower shall pay the fees, costs and expenses incurred by Agent in
connection with the preparation, execution and delivery of this Amendment
(including, without limitation, reasonable attorneys' fees).
8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW
PROVISIONS) OF THE STATE OF NEW YORK.
9. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first written above.
BORROWER:
WESCO DISTRIBUTION, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
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The following Persons are signatories to this Amendment in their capacity as
Credit Parties and not as Borrowers.
WESCO DISTRIBUTION-CANADA, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
WESCO CANADA FINANCE LIMITED
PARTNERSHIP
By:___________________________________
Name:_________________________________
Title:________________________________
WESCO INTERNATIONAL, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
WESCO FINANCE CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
CDW HOLDCO, LLC
By:___________________________________
Its Managing Member
By:__________________________
Name:________________________
Title:_______________________
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HERNING ENTERPRISES, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
WESCO NIGERIA, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
WESCO EQUITY CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
15
GENERAL ELECTRIC CAPITAL
CORPORATION, AS AGENT AND LENDER
By:___________________________________
Name:_________________________________
Title:________________________________
THE CIT GROUP/BUSINESS CREDIT,
INC., AS SYNDICATION AGENT AND LENDER
By:___________________________________
Name:_________________________________
Title:________________________________
FLEET CAPITAL CORPORATION,
AS DOCUMENTATION AGENT AND LENDER
By:___________________________________
Name:_________________________________
Title:________________________________
CITIZENS BANK OF PENNSYLVANIA
By:___________________________________
Name:_________________________________
Title:________________________________
PNC BANK, NATIONAL ASSOCIATION,
AS LENDER
By:___________________________________
Name:_________________________________
Title:________________________________
16
LASALLE BANK NATIONAL ASSOCIATION
By:___________________________________
Name:_________________________________
Title:________________________________
FIRST COMMONWEALTH BANK
T/A NBOC BANK, AS LENDER
By:___________________________________
Name:_________________________________
Title:________________________________
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