Exhibit 10.13
EXECUTION
SECOND AMENDMENT TO CREDIT AGREEMENT BY AND AMONG WESTCON GROUP NORTH AMERICA,
INC. AND WESTCON CANADA SYSTEMS (WCSI) INC., AS BORROWERS, WESTCON GROUP, INC.,
GENERAL ELECTRIC CAPITAL CORPORATION, AS AMERICAN COLLATERAL AGENT AND AS
LENDER, GENERAL ELECTRIC CAPITAL CANADA INC., AS CANADIAN COLLATERAL AGENT AND
AS LENDER, HSBC BANK USA, AS ARRANGER AND L/C ISSUER TO WESTCON AMERICA, HSBC
BANK USA (TORONTO BRANCH), AS L/C ISSUER TO WESTCON CANADA, AND THE OTHER
LENDERS, AMONG OTHERS, PARTY THERETO
------------------------------------
This Second Amendment to Credit Agreement, dated as of May 7, 2004
(this "Amendment"), is entered into by and among WESTCON GROUP, INC., a Delaware
corporation ("Westcon"), WESTCON GROUP NORTH AMERICA, INC., a New York
corporation ("Westcon America"), WESTCON CANADA SYSTEMS (WCSI) INC., a Canadian
corporation ("Westcon Canada" and together with Westcon America, "Borrowers"),
the other Obligors, HSBC BANK USA, a New York State banking corporation
("HSBC"), as Arranger and L/C Issuer to Westcon America, HSBC BANK USA (TORONTO
BRANCH), as L/C Issuer to Westcon Canada and as Lender, GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation, as American Collateral Agent and as Lender,
GENERAL ELECTRIC CAPITAL CANADA INC., a Canadian corporation, as Canadian
Collateral Agent and as Lender and the other Lenders, among others, party to the
Credit Agreement.
RECITALS
WHEREAS, Westcon, Westcon America, Westcon Canada, the other Obligors,
the American Collateral Agent, Canadian Collateral Agent, HSBC and Lenders, are
parties to a Credit Agreement, dated as of June 12, 2003, as amended by that
certain First Amendment to Credit Agreement, dated as of January 16, 2004 (as so
amended and as it may hereafter be further amended, supplemented, restated or
otherwise modified from time to time, the "Credit Agreement").
WHEREAS, Westcon and the Borrowers have requested that the Agents and
Lenders consent to certain amendments to the Credit Agreement conditioned upon
the successful completion of the Westcon IPO (as such term is hereinafter
defined) and Agent and Lenders are willing to amend the Credit Agreement in
connection with the successful completion of the Westcon IPO, all on the terms
and subject to the conditions set forth in this Amendment.
WHEREAS, Westcon and the Borrowers have notified the Agents and
Lenders that an Event of Default exists under Section 10.1(e), Involuntary
Insolvency Proceedings, of the Credit Agreement as a result of an involuntary
liquidation proceeding initiated against Westcon Denmark, a Subsidiary of
Westcon (such Event of Default, the "Existing Event of Default").
WHEREAS, Borrowers have requested that the Agents and Lenders waive
the Existing Event of Default and Agents and Lenders are willing to waive the
Existing Event of Default pursuant to, and subject to, the terms and conditions
set forth in this Amendment.
WHEREAS, the Borrowers, the Agents and the Lenders are desirous of
further amending the Credit Agreement as and to the extent set forth herein and
pursuant to, and subject to, the terms and conditions set forth in this
Amendment.
WHEREAS, this Amendment shall constitute a Loan Document and these
Recitals shall be construed as part of this Amendment. Capitalized terms used
herein without definition are so used as defined in the Credit Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and of the loans or other extensions of credit
heretofore, now or hereafter made to, or for the benefit of, Borrowers by
Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Limited Waiver. Agents and Lenders hereby waive the Existing Event of
Default. The foregoing waiver is only applicable and shall only be effective in
the specific instance and for the specific purpose for which made. Such waiver
is expressly limited to the facts and circumstances referred to herein and shall
not operate (a) as a waiver of or consent to non-compliance with any other
provision of the Credit Agreement or any other Loan Document or to any other
non-compliance with the provisions of Section 10.1(e) of the Credit Agreement,
(b) as a waiver of any other right, power or remedy of Agents or Lenders under
the Credit Agreement or any other Loan Document or (c) as a waiver of or consent
to any other Incipient Default or Event of Default under the Credit Agreement or
any other Loan Document.
2. Amendments to Credit Agreement. The Credit Agreement is hereby amended
as follows:
2.1. Section 1.1, Definitions, of the Credit Agreement is amended as
follows:
(a) The following definitions are to be inserted in proper
alphabetical order:
"Second Amendment Closing Date" means May 7, 2004.
"Westcon IPO" means an initial public offering of the common stock of
Westcon pursuant to an effective registration statement under the Securities Act
of 1933, as amended, which results in net proceeds of not less than $50,000,000
and which prices and closes no later than October 31, 2004.
(b) The definition of "Swap Agreement" is amended and restated to
read in its entirety as follows:
"Swap Agreement" means a non-speculative interest rate swap, cap or
collar agreement, or any non-speculative agreement for foreign exchange
transactions, or any non-speculative
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arrangement similar to any of the foregoing between (i) any Borrower and any
Lender and (ii) Westcon and any Lender or other Person, each as providing for
the transfer or mitigation of interest rate or currency risks either generally
or under specific contingencies; provided, that any Swap Agreement entered into
between Westcon and any Lender or other Person shall be unsecured and be limited
in recourse solely to Westcon."
2.2. Section 9.8, Investments and Loans, of the Credit Agreement shall
be amended as follows:
(a) Clause (i) of Section 9.8 is amended by inserting after the
words "set forth on Schedule 9.8 hereof" and before the "," the following:
"or investments expressly permitted by Section 9.11 hereof";
(b) Clause (iv) of Section 9.8 is amended by inserting after the
words "investments in the Unrestricted Subsidiaries" and before the "." in
clause "(iv)" the following:
"and equity investments in the North American Subsidiaries".
2.3. Section 9.11, Investments, shall be amended by adding after the
words "other than" the following:
"investments expressly permitted by Section 9.8 and".
2.4. Section 9.21(b), Fixed Charge Ratio, of the Credit Agreement is
amended by deleting after the words "tested quarterly" and before the words
"computed on a Trailing 12-Month Basis" the following:
"with EBITDA and Fixed Charges to be".
2.3. Section 10.1(e), Defaults, is amended by inserting before the"."
at the end of such subsection the following:
"provided, that the involuntary liquidation of Westcon Denmark shall
not constitute an Event of Default pursuant to this Section 10.1(e).".
2.4. Schedule 4.4, Ventures, Subsidiaries and Affiliates; Outstanding
Stock and Obligations, of the Credit Agreement is hereby amended to reflect
Westcon Austria's absorption by Westcon Germany and the name exchange between
Westcon GmbH and Westcon (Deutchland) all as set forth in Schedule A to this
Amendment.
2.5. The name of Westcon Netherlands B.V. has been changed to Westcon
Benelux B.V. All references in the Loan Documents to Westcon Netherlands B.V.
shall be replaced by Westcon Benelux B.V.
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3. Amendments to the Credit Agreement Conditioned upon the Westcon IPO.
Upon the successful completion of the Westcon IPO, the following Sections of the
Credit Agreement shall automatically, and without further act or deed by any
Borrower, any other Obligor, any Agent, any Lender or any other Person, be
amended as follows:
3.1. Section 1.1, Definitions, of the Credit Agreement shall be amended
as follows:
(a) The following definitions shall be inserted in proper
alphabetical order:
"Early Payment Discount Advances" as defined in Section 9.10 hereof.
"Liquid Investments" means: (i) marketable securities (A) issued or
directly and unconditionally guaranteed as to interest and principal by the
United States government or (B) issued by any agency of the United States
government the obligations of which are backed by the full faith and credit of
the United States, in each case maturing within 14 months after acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after acquisition
thereof and having, at the time of acquisition, a rating of at least A-1 from
S&P or at least P-1 from Xxxxx'x; (iii) commercial paper maturing no more than
one year from the date of acquisition and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from Xxxxx'x; (iv) Auction Rate
Securities that reset within one year after acquisition and have a rating of at
least AA from S&P or at least Aa from Xxxxx'x; (v) certificates of deposit or
bankers' acceptances issued or accepted by any Lender or by any commercial bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia that is at least (A) "adequately capitalized" (as
defined in the regulations of its primary Federal banking regulator) and (B) has
Tier 1 capital (as defined in such regulations) of not less than $250,000,000,
in each case maturing within one year after issuance or acceptance thereof; and
(v) shares of any money market mutual or similar funds that (A) has
substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) through (iv) above and (B) has net assets
of not less than $500,000,000.
(b) "The definition of "Permitted Acquisitions" shall be amended by
inserting after the "," in clause "(i)" of the initial paragraph the following:
"notwithstanding the foregoing, Westcon may provide additional
funding to increase from $20,000,000 to $60,000,000 the aggregate amount for all
such investments in any twelve month period, so long as (i) no single investment
exceeds $20,000,000, (ii) all additional funding amounts provided by Westcon as
part of such $40,000,000 increase from $20,000,000 to $60,000,000 are provided
solely by Westcon and not by any Borrower or other Obligor (other than Westcon)
and not with the proceeds of any Loan and (iii) any and all such investments so
funded by Westcon are undertaken in full compliance with each of the other
requirements relating to Permitted Acquisitions set forth herein,".
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(c) The definition of "Permitted Indebtedness" shall be amended by
replacing the ";" at the end of subsection "(g)" with a "," and inserting the
following:
"or (iii) Early Payment Discount Advances by Westcon to the Borrowers
expressly as permitted under, and made in compliance with, the terms and
conditions set forth in Section 9.10;".
(d) The definition of "Permitted Indebtedness" shall be further
amended by changing the subsection designation "(j)" contained therein to "(k)"
and adding new subsection designated "(j)" to read as follows:
"(j) The issuance by Westcon of an unsecured promissory note in favor
of Datatec, which note will refinance certain notes issued by certain
Subsidiaries of Westcon to Datatec as currently set forth in Schedule 4.4 to the
Credit Agreement, in an aggregate principal amount not to exceed $30,000,000
(after giving effect to the prepayment of such promissory note contemplated by
Section 9.10(ii) of this Amendment); provided, that (i) after giving effect to
such assumption, all obligations and liabilities under such promissory note are
solely of Westcon and there is no recourse to Westcon America, Westcon Canada or
any Obligor (other than Westcon) or any of their respective properties or
assets; and (ii) the obligation of Westcon to Datatec shall be expressly
subordinated to the Obligations under this Amendment and the other Loan
Documents and such subordination shall be evidenced by a subordination agreement
by and among Westcon, Datatec and the Collateral Agents, which subordination
agreement shall be in form and substance satisfactory to the Collateral Agents;
3.2. Section 7.3, Mandatory Prepayment, of the Credit Agreement shall be
amended as follows:
(a) Clause (i) of Section 7.3 is amended by inserting after the
words "dispositions of Inventory" the following:
"or monetizations of Liquid Investments".
(b) Clause (ii) of Section 7.3 is amended by inserting after the
"," the following:
"other than the issuance of shares of the common stock of Westcon
as part of the Westcon IPO,".
3.3. Section 8.5(c), Additional Reporting, is amended by inserting after
the words "as applicable," the following:
"(provided that with respect to and solely with respect to Sections
8.3 and 8.4 the Treasurer of Westcon America and Westcon Canada,
respectively, may also sign such certificate, schedule or report)".
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3.4. Section 9.5, Sales of Assets, shall be amended by inserting after
the words "Capital Stock," in clause "(i)" the following:
"Liquid Investments,".
3.5. Section 9.6, Capital Stock, of the Credit Agreement shall be
amended by deleting the second proviso and replacing it with the following:
"provided, further, that the foregoing restriction shall not apply
to (i) repurchases of the capital stock of Westcon from its chief executive
officer in accordance with the put agreement in place with such individual on
the Closing Date; and (ii) repurchases of the capital stock of Westcon so long
as (x) any such repurchases under clauses (i) or (ii) are funded solely by
Westcon, and not with the proceeds of any Loan to Westcon America or Westcon
Canada or any other funds of Westcon America, Westcon Canada or any other
Obligor (other than Westcon), and (y) both before and after giving effect to any
such repurchases, Westcon America shall have Excess Availability in the amount
of at least $27,500,000.".
3.6. Section 9.8, Investments and Loans, of the Credit Agreement shall
be amended by inserting after the words "in the case of Westcon," and before the
words "direct obligations of the United States of America" the following:
"Liquid Investments and".
3.7. Section 9.10, Dividends, of the Credit Agreement shall be amended
by inserting a "(i)" after the "," following the words "Event of Default
hereunder" in the first proviso and by inserting after the words "the prior
fifteen (15) days" and before the "." in the second proviso the following:
"; (ii) Westcon may (A) use the net proceeds of the Westcon IPO to
make a payment to Datatec to repay a portion of the principal balance of the
promissory note to be assumed by Westcon as contemplated by and in accordance
with the provisions of clause (j) of the definition of Permitted Indebtedness
(so that, after giving effect to such prepayment, the principal amount of such
promissory note being assumed by Westcon, as contemplated by and in accordance
with the provisions of clause (j) of the definition of Permitted Indebtedness,
is not more than $30,000,000); and (B) Westcon may make advances from time to
time to the Borrowers, in order to allow, and solely for the purpose of
allowing, the Borrowers to take advantage of early payment discounts offered by
vendors (each such advance, an "Early Payment Discount Advance"); provided,
that, before the Borrowers may at any time repay any such advance amounts to
Westcon: (1) no Incipient Default or Event of Default shall have occurred and be
continuing; and (2) the Borrowers shall have average daily Excess Availability
in the amount of at least $27,500,000 for the thirty (30) days prior to any such
repayment, as determined by Collateral Agents, and the Borrowers on a combined
basis shall have Excess Availability, as determined by Collateral Agents, in the
amount of at least $12,000,000 on a pro forma basis after giving effect to any
such repayment. In addition Westcon, and only Westcon, may solely with its own
cash (i) repay on behalf of Unrestricted
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Subsidiaries the Obligations of such Unrestricted Subsidiaries to third parties
and (ii) make advances to Unrestricted Subsidiaries for the purpose of allowing
such Unrestricted Subsidiaries to repay their Obligations to third parties.".
3.8. Section 9.21, Fixed Charge Ratio, of the Credit Agreement shall be
amended as follows:
(a) Westcon. Section 9.21 shall be amended by replacing the Ratio
for the period ending February 29, 2004 and all periods thereafter with the
following:
"Period Ratio
------ -----
Quarter ending February 29, 2004 1.38 to 1.00
Quarter ending May 31, 2004 1.41 to 1.00
Quarter ending August 31, 2004 1.17 to 1.00
Quarter ending November 30, 2004 1.18 to 1.00
Quarter ending February 28, 2005 1.26 to 1.00
Quarter ending May 31, 2005 1.35 to 1.00
Quarter ending August 31, 2005 1.40 to 1.00
Quarter ending November 30, 2005 1.44 to 1.00
Quarter ending February 28, 2006 1.45 to 1.00"
and each Fiscal Quarter thereafter
(b) Westcon America. Section 9.21(b) shall be amended by replacing
the Ratio for the period ending February 29, 2004 and all periods thereafter
with the following:
"Period Ratio
------ -----
Quarter ending February 29, 2004 1.40 to 1.00
Quarter ending May 31, 2004 1.37 to 1.00
Quarter ending August 31, 2004 1.28 to 1.00
Quarter ending November 30, 2004 1.30 to 1.00
Quarter ending February 28, 2005 1.37 to 1.00
Quarter ending May 31, 2005 1.37 to 1.00
Quarter ending August 31, 2005 1.44 to 1.00
Quarter ending November 30, 2005 1.46 to 1.00
Quarter ending February 28, 2006 and 1.47 to 1.00"
each Fiscal Quarter thereafter
3.9. Minimum Tangible Net Worth. Section 9.22 of the Credit Agreement
shall be amended as follows:
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(a) Westcon. Section 9.22(a) shall be amended by replacing the
Amount for the period ending February 29, 2004 and all periods thereafter with
the following:
"Period Amount
------ ------
Quarter ending February 29, 2004 $198,900,000.00
Quarter ending May 31, 2004 $187,100,000.00 plus NPIPO
Quarter ending August 31, 2004 $180,500,000.00 plus NPIPO
Quarter ending November 30, 2004 $168,400,000.00 plus NPIPO
Quarter ending February 28, 2005 $170,200,000.00 plus NPIPO
Quarter ending May 31, 2005 $171,100,000.00 plus NPIPO
Quarter ending August 31, 2005 $159,900,000.00 plus NPIPO
Quarter ending November 30, 2005 $162,900,000.00 plus NPIPO
Quarter Ending February 28, 2006 $152,000,000.00 plus NPIPO
where "NPIPO" means the proceeds (exclusive of proceeds of shares sold by
selling stockholders other than Westcon pursuant to the overallotment option)
received by Westcon at the closing of the Westcon IPO net of underwriting
discounts and fees, costs and expenses of the Westcon IPO and less the amount
used to repay a portion of the Datatec promissory note as contemplated by
Section 3.1(d) of this Amendment."
(b) Westcon America. Section 9.22(b) shall be amended by replacing
the Amount for the period ending February 29, 2004 and all periods thereafter
with the following:
"Period Amount
------ ------
Quarter ending February 29, 2004 $153,100,000.00
Quarter ending May 31, 2004 $151,000,000.00
Quarter ending August 31, 2004 $152,500,000.00
Quarter ending November 30, 2004 $155,200,000.00
Quarter ending February 28, 2005 $157,800,000.00
Quarter ending May 31, 2005 $158,900,000.00
Quarter ending August 31, 2005 $161,500,000.00
Quarter ending November 30, 2005 $164,200,000.00
Quarter Ending February 28, 2006 $166,300,000.00"
3.10. Section 10.1"(o)", Defaults, of the Credit Agreement shall be
amended and restated in its entirety as follows:
"(o) (i) In the event Westcon no longer owns all of the capital stock
of Borrowers and its other North American Subsidiaries or Borrowers no longer
own all of the capital stock of their respective Subsidiaries, or there is a
change in the occupation of a majority of the seats on any of
8
their respective Boards of Directors or management committees by Persons who are
neither nominated by the Boards of Directors or management committees on the
date hereof or appointed by a Board of Directors or management committees so
nominated or (ii) (x) any person or group of persons (within the meaning of the
Securities Exchange Act of 1934) (other than Datatec or a wholly-owned
Subsidiary of Datatec) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 20% or more of the issued and
outstanding shares of Stock of Westcon having the right to vote for the election
of directors of Westcon under ordinary circumstances or (y) during any period of
twelve consecutive calendar months, individuals who at the beginning of such
period constituted the board of directors of Westcon (together with any new
directors whose election by the board of directors of Westcon or whose
nomination for election by the stockholders of Westcon was approved by a vote of
at least a majority 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 other than death or
disability to constitute a majority of the directors then in office.".
3.11. Schedule 4.4, Ventures, Subsidiaries and Affiliates; Outstanding
Stock and Obligations, of the Credit Agreement shall be amended to the extent
necessary to reflect the Westcon IPO and sale of its common stock to the public
pursuant to the Weston IPO.
4. Representations and Warranties of the Borrower. Each of the Borrowers,
Westcon and each of the other Obligors jointly and severally hereby represent
and warrant that as of the Second Amendment Closing Date:
4.1. The execution, delivery and performance by each of the Borrowers,
Westcon and each of the Obligors of this Amendment has been duly authorized by
all necessary corporate action, including, without limitation, all necessary
action by its board of directors and stockholders, and that this Amendment is a
legal, valid and binding obligation of each of the Borrowers, Westcon and each
of the Obligors enforceable against it in accordance with its terms, except as
the enforcement hereof may be subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally or to general principles of equity.
4.2. The execution, delivery and performance of this Amendment by each
of the Borrowers, Westcon and each of the Obligors does not, and will not,
contravene or conflict with any provision of (i) law, (ii) any judgment, decree
or order, or (iii) the certificate or articles of incorporation or by-laws of
either of the Borrowers, Westcon and any Obligor, and does not, and will not,
contravene or conflict with, or cause any Lien to arise under, any provision of
any agreement, mortgage, lease, instrument or other document binding upon or
otherwise affecting either of the Borrowers, Westcon and any Obligors or any
property of either of the Borrowers, Westcon or any Obligor or any Subsidiary
thereof.
4.3. All of the representations and warranties contained in the Credit
Agreement and each other Loan Document are true and correct in all material
respects on and as of the date hereof as if made on the date hereof and that
except for the Existing Event of Default, no Default
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or Event of Default exists under the Credit Agreement or any other Loan Document
or will exist after or be triggered by the execution and delivery of this
Amendment. In addition, each of the Borrowers, Westcon and each of the Obligors
hereby represents and warrants that the Credit Agreement and each of the other
Loan Documents remains in full force and effect.
5. Conditions Precedent to Amendments. The amendments contemplated by
Section 2 hereof are subject to the satisfaction of each of the following
conditions precedent:
5.1. Amendment. This Amendment shall have been duly executed and
delivered by each of the Borrowers, Westcon, each of the Obligors and each of
the Required Lenders.
5.2. No Default. Other than the Existing Event of Default, no Default or
Event of Default shall have occurred and be continuing.
5.3. Representations and Warranties. On and as of the date hereof, the
representations and warranties contained in Article 4 of the Credit Agreement
and in Section 4 of this Amendment shall be true and correct as though made on
such date, except, in the case of representations and warranties contained in
Article 4 of the Credit Agreement which speak solely as of a specific date, in
which event such representations and warranties shall be true and current as of
such specific date.
5.4. Documentation. Each of the Borrowers, Westcon and each of the other
Obligors shall have delivered to the American Collateral Agent such other
documents as the American Collateral Agent may reasonably request each duly
executed and dated the date hereof, in form and substance satisfactory to the
American Collateral Agent.
6. Conditions Precedent to Amendments Conditioned upon the Successful
Completion of a Westcon IPO. The amendments contemplated by Section 3 hereof are
subject to the satisfaction of each of the conditions precedent set forth in
Section 5 of this Amendment and, in addition, shall be subject to the
satisfaction of the following additional condition precedent:
6.1. Westcon IPO. The Westcon IPO shall have been successfully
completed.
7. Reference to and Effect Upon the Credit Agreement and other Loan
Agreements.
7.1. Except as specifically provided in Sections 1, 2 and 3 above, the
Credit Agreement and each other Loan Document shall remain in full force and
effect and is hereby ratified and confirmed.
7.2. 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 waiver in Section 1
above), or to any amendment or modification of any term or condition (except for
the specific amendments provided in Sections 2 and 3 above), of the Credit
Agreement or any other Loan Document or (ii) prejudice any right, power or
remedy which the Agents or any Lender now has or may have in the future under or
in connection with the Credit Agreement or any other Loan Document.
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7.3. 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
amended hereby.
8. Acknowledgment and Consent of Obligors. Each Obligor hereby consents to
this Amendment and hereby confirms and agrees that (a) notwithstanding the
effectiveness of this Amendment, the Guaranties and each other Loan Document to
which it is a party is, and shall continue to be, in full force and effect and
is hereby ratified and confirmed in all respects, and (b) the Collateral
Documents to which such Obligor is a party and all of the Collateral described
therein do, and shall continue to, secure the payment of all of the Obligations
(in each case, as defined therein).
9. 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 to this Amendment by facsimile machine shall be as
effective as delivery of a manually executed counterpart of this Amendment.
10. Costs and Expenses. As provided in Section 7.5 of the Credit Agreement,
Borrower shall pay on demand all fees, costs and expenses incurred by the
Arranger and Collateral Agents in connection with the preparation, execution and
delivery of this Amendment (including, without limitation, all attorneys' fees).
11. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF
THE STATE OF NEW YORK.
12. 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 to the Credit Agreement has been
duly executed as of the date first written above.
WESTCON GROUP, INC.
By: /s/ Xxxx X. X'Xxxxxx
-------------------------------------
Name: Xxxx X. X'Xxxxxx
Title: Vice President
WESTCON GROUP NORTH AMERICA, INC.
By: /s/ Xxxx X. X'Xxxxxx
-------------------------------------
Name: Xxxx X. X'Xxxxxx
Title: Vice President
Second Amendment to Credit Agreement
WESTCON CANADA SYSTEMS (WCSI) INC.
By: /s/ Xxxx X. X'Xxxxxx
-------------------------------------
Name: Xxxx X. X'Xxxxxx
Title: Vice President
EASTPRO SERVICES, INC., as an Obligor
By: /s/ Xxxx X. X'Xxxxxx
-------------------------------------
Name: Xxxx X. X'Xxxxxx
Title: Vice President
Second Amendment to Credit Agreement
HSBC BANK USA, as Arranger, as American
L/C Issuer and as an American Lender
By: /s/ Xxxxxxxx Xxxxxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxxxxx
Title: Vice President
Second Amendment to Credit Agreement
GENERAL ELECTRIC CAPITAL
CORPORATION, as American Collateral
Agent and an American Lender
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Duly Authorized Signatory
Second Amendment to Credit Agreement
LASALLE BUSINESS CREDIT LLC, as an
American Lender
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Second Amendment to Credit Agreement
GENERAL ELECTRIC CAPITAL CANADA
INC., as Canadian Collateral
Agent and a Canadian Lender
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
Second Amendment to Credit Agreement
HSBC BANK USA (Toronto Branch), as
Canadian L/C Issuer and a Canadian Lender
By: /s/ Xxxxxxxx Xxxxxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxxxxx
Title: Vice President
Second Amendment to Credit Agreement
THE CIT GROUP/BUSINESS CREDIT, INC., as
an American Lender
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Second Amendment to Credit Agreement
ABN AMRO BANK, N.V., Canadian Branch, as
a Canadian Lender
By: /s/ Xxxxx Xxxx/D. Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxx/D. Xxxxx Xxxxxx
Title: Vice President/
Senior Vice President
Second Amendment to Credit Agreement
CITIZENS BUSINESS CREDIT COMPANY, a
division of Citizens Leasing Corp. as an
American Lender
By: /s/ Xxxxxxx X. X'Xxxxx
-------------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Senior Vice President
Second Amendment to Credit Agreement
SIEMENS FINANCIAL SERVICES, INC., as an
American Lender
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President - Credit
Second Amendment to Credit Agreement
CONGRESS FINANCIAL CORPORATION
(CENTRAL), as an American Lender
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
Second Amendment to Credit Agreement
CONGRESS FINANCIAL CORPORATION,
(CANADA), as a Canadian Lender
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
Second Amendment to Credit Agreement
SIEMENS FINANCIAL SERVICES, LIMITED, as
a Canadian lender
By: /s/ X. X. Xxxxxxxx
-------------------------------------
Name: X. X. Xxxxxxxx
Title: Chairman & CEO
Second Amendment to Credit Agreement
CIT FINANCIAL LTD., as a Canadian Lender
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
Second Amendment to Credit Agreement
CITIZENS BUSINESS CREDIT COMPANY, a
division of Citizens Leasing Corp. as a
Canadian Lender
By: /s/ Xxxxxxx X. X'Xxxxx
-------------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Senior Vice President
Second Amendment to Credit Agreement
SCHEDULE A
See attached
SCHEDULE 4.4
------------
Ventures, Subsidiaries, Affiliates, Stock & Obligations
-------------------------------------------------------
Ventures
--------
Westcon and Borrowers do not have any joint ventures or similar
arrangements.
Subsidiaries
------------
------------------------------------------------------------------------------------------------------------------------------------
Schedule 4.4 revised 6.6.03
WESTCON COMPANIES
Issued
Corporation Incorp. Directors Officers Authorized Shares Shareholders Shares Registration Tax id #
Main Office date #
------------------------------------------------------------------------------------------------------------------------------------
Westcon Group, Inc. Xxxx Marc
000 Xxxxx Xxxxxx Xxxx Xxxx X. Xxxxx -
Xxxxxxxxx, XX 00000 2/11/87 McCartney President, MIRADO Corp.
CEO 200,000,000 common 6.5% 8285 00-0000000
Xxxxxx 15,000,000 preferred
Xxxxx -
Executive
Xxxx Xxxx Vice
Xxxxx President
Xxxx
Xxxx X'Xxxxxx,
Montanana VP, CFO
Xxxxxxxxx
Xxxxxx,
Xxxxx Assistant
Seabrooke Secretary
Xxxx Xxxx,
Xxxxxx Assistant Datatec Limited
Xxxx Secretary 92.5%
22604096
12980023
205000
3381693
217605
118656
118656
12975
2190784
355968
355968
355968
Xxxx Xxxx
Xxxxx 1% 474624
------------------------------------------------------------------------------------------------------------------------------------
Westcon (Australia) Xxxxxx Westcon 1 ACN075772913 00-000-000
Pty Limited 9/26/96 Xxxxxx 1 (divided into lots) Group Inc.
Xxxx 0, 00 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxx
Second Amendment to Credit Agreement
Inactive
------------------------------------------------------------------------------------------------------------------------------------
Xxxx Marc
Westcon Canada Systems Xxxx Xxxx Xxxxx - Westcon Group,
(WCSI) Inc. 12/19/91 Xxxxx President unlimited number Inc. 70E 2781514 CBQ 49934 8
aka 2781514 Canada Inc. Xxxx non-voting stock
0000 00xx Xxxxxx Xxxxxxxxxxx- in 4 classes 210A 00-0000-00000000
Xxxxxxx, Xxxxxx X0X 0X0 Xxxxxx 10-1173
Xxx Xxxxx and 100 class E voting 234B 5807001
Xxxxx
Xxxx
X'Xxxxxx,
Vice
President 172,714C
Xxxxxx
Xxxxxxxx
Secretary
Canada distribution Xxxx
Xxxx
Assistant
Secretary
------------------------------------------------------------------------------------------------------------------------------------
Westcon Brasil Ltda. Westcon Group,
Xxx Xxxxxx Xxxxxx Xxxxxxx Xxx.
00 Xxxxx 00 Group, Inc.
Edificio Rio Office - Managing 99.9999% 987747 28.268.233/0001-99
Park 5 Quotaholder 987747 Quota Quota 000000-Xxx
Xxx xx Xxxxxxx, Xxxxxx 7/25/83
(Otavio Babosa)*
Xxxxxxx
Xxxxxxx -
Managing
Quotaholder 1 Quote Commercial multiple
.0001% numbers
Registry
*nominee share
------------------------------------------------------------------------------------------------------------------------------------
Westcon Group North Xxxx Xxxx
America, Inc. Xxxx Xxxx Xxxxx - Westcon Group,
000 Xxxxx Xxxxxx Xxxx Xxxxx President 200 Inc. 50 00-0000000
Xxxxxxxxx, XX 00000 9/10/97
Xxxxxxxxx
Xxxxxxx,
Xxxxxx Assistant
Raffiani Secretary 32
Xxxx Xxxx -
Asst.
Secretary
Xxxx
X'Xxxxxx
Vice
President
US Distribution -
Nortel, Avaya, Cisco
------------------------------------------------------------------------------------------------------------------------------------
Westcon (UK) Limited
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxx XX 0 0XX Xxxx Xxxx
Xxxxxxx 11/16/98 Xxxxx 100,000 pref. Weston Group 2 odinary 3668409
European
Xxxxxxx Operations
Chilvers, MD 429,220 A ord Limited
117,570,780 ord.
UK Distributor of Nortel
and Lucent products
------------------------------------------------------------------------------------------------------------------------------------
Comstor Group Limited Xxxx Marc
Chandlers House 10/2/96 Xxxxx 1,000,000 ordinary Westcon UK 1000000 3257722
Cirencester 10,000 ordinary A 10000
Xxxxxxxxxxxxxxx XX0 0XX 1,000,000 pref. 1000000
Second Amendment to Credit Agreement
Owns Comstor Limited
------------------------------------------------------------------------------------------------------------------------------------
Xxxx Marc Comstor Group
Comstor Limited 2/15/94 Xxxxx 50,000 Limited 50,000 2898318
Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxx
Xxxxxxxxxxx
Xxxxxxxxxxxxxxx XX0 0XX
UK distributor of Cisco
products
------------------------------------------------------------------------------------------------------------------------------------
9/29/95 1000 Comstor 2 3108599
Comstor Integration Xxxx Xxxx Limited
Limited Xxxxx
Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxx
Xxxxxxxxxxx
Xxxxxxxxxxxxxxx XX0 0XX
Dormant
------------------------------------------------------------------------------------------------------------------------------------
Eastpro Services, Inc. Xxxx Marc
000 Xxxxx Xxxxxx Xx. Xxxx Xxxx Xxxxx - Westcon Group,
Xxxxxxxxx, XX 00000 9/9/96 Xxxxx President 200 Inc. 10A 00-0000000
Xxxx
X'Xxxxxx
Vice
President
Marketing and special
programs logistics
------------------------------------------------------------------------------------------------------------------------------------
Lan Systems Pty. Limited Xxxx Marc Westcon Group,
C2 12/11/90 Xxxxx 10,000,000 Inc. 1000000 ACN 050 539 672
00-00 Xxxxxx Xxxx 4,711
Lane Cove, NSW 2066 Xxxxx Xxxxxx options
Australian distributor
of Nortel & Cisco
Products
------------------------------------------------------------------------------------------------------------------------------------
Comstor Networks GmbH Xxxx Marc
(formerly RBR Networks 12/21/98 Xxxxx Westcon GmbH 1
GmbH)
Xxxxxxxx-Xxxxxxx-Xxxxx
000
00000 Xxxxxx
Xxxxxxx distributor of
Cisco products
Active
------------------------------------------------------------------------------------------------------------------------------------
Westcon (Deutschland) Xxxx Marc
GmbH 3/23/99 Xxxxx Westcon Group 1 73072
Kaiserin-Augusta-Allee European
111 Operations
10553 Berlin Limited
Holding company - Germany
------------------------------------------------------------------------------------------------------------------------------------
Second Amendment to Credit Agreement
Comstor Pte Ltd.
#06-02 Xxxxx Xxxx
150 Kampong Ampat Choon Westcon Group,
KA Cir 6/12/99 Xxxxxx Xxx Hwee, 8,500,000 Inc. 100000 199903255M
Jun Jie Industrial secretary
Bldg 368326 Xxxxx de
Xxxxx Xxxxx,
Xxxxxx secretary 0000000
Xxxxxxxxx distributor of Cisco products
------------------------------------------------------------------------------------------------------------------------------------
Comstor Belgium N.V. Xxxxxx
Mechelen Campus Wilikens,
Schalienhoevedreef 20J Xxxx Marc General
B-2800 Mechelen Xxxxx Manager 620 Westcon Group 620 474.480.646
European
3/1/01 Operations
Belgium distributor of Cisco products Limited
------------------------------------------------------------------------------------------------------------------------------------
Explicit Marketing
000 Xxxxxxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx Xx. 0 0XX 11/16/00 Chilvers 100 Westcon UK 100 4108934
England Limited
Marketing and special
programs loistics
------------------------------------------------------------------------------------------------------------------------------------
Lan Systems Limited Lan Systems
New Zealand Pty Ltd
------------------------------------------------------------------------------------------------------------------------------------
Westcom Group 4/8/02 Jens
European Operations Montanana 1,000 Westcon Group 1 4411285
Limited Xxxx Xxxx European
35 Xxxx Street Xxxxx Holdings
London Limited
Holding company
------------------------------------------------------------------------------------------------------------------------------------
Westcon Group Xxxxxxxxx
European Holdings Xxxx Xxxxxxx, Westcon Group,
Limited 4/8/02 Montanana Secretary 1,000 Inc. 1 4411310
00 Xxxx Xxxxxx
Xxxxxx Xxxx Xxxx
Xxxxx
------------------------------------------------------------------------------------------------------------------------------------
Westcon Austria Jens
HandelsgmbH Montanana Westcon Group FN 219134g
Xxxxxxxxxxxxxxx 00, Xxxx Marc European
Burohas 1 Xxxxx Operations
Xxxxxx Xxxxxxx 0000, Xxxxxxx
Austria Limited
Inactive
Second Amendment to Credit Agreement
------------------------------------------------------------------------------------------------------------------------------------
Westcon Belgium BVBA Jens
Veidkant 00X 0/0/00 Xxxxxxxxx Xxxxxxx Xxxxx XX Xxxxxxx
B.2250 Xxxxxxx Xxxx Xxxx European
Belgium Xxxxx Operations 658.184
Limited
------------------------------------------------------------------------------------------------------------------------------------
Westcon Netherlands BV Jens
Kobaltweg 58 4/26/02 Montanana 900 Westcon Group 180 34173094
3542 CE Xxxxxxxx Xxxx Xxxx European
Netherlands Xxxxx Operations
Limited
Netherlands distributor
------------------------------------------------------------------------------------------------------------------------------------
Comstor Netherlands BV Jens
Kobaltweg 58 5/15/02 Montanana 900 Westcon Group 180 34173788
3542 CE Xxxxxxxx Xxxx Xxxx European
Netherlands Xxxxx Operations
Limited
Netherlands distributor
------------------------------------------------------------------------------------------------------------------------------------
Westcon Group European Jens
Facilities BV 5/16/02 Montanana 900 Westcon Group 180 34173790
Xxxxxxxxx 00 Xxxx Xxxx Xxxxxxxx
0000 XX Xxxxxxxx Xxxxx Operations
Netherlands Limited
------------------------------------------------------------------------------------------------------------------------------------
Westcon France SAS Jens 4000 Westcon Group 4000 2002B07555
0 xxx xx Xxxx xx Xxxx 5/14/02 Montanana European
BP 149 Operations
92154 Suresnes et 00 Xxxx
Xxxxxxx
Xxxxxxxxx Xx Xxxx
Xxxxxxxx (Angle de Rue)
------------------------------------------------------------------------------------------------------------------------------------
Comstor France SAS Jens
0 xxx xx Xxxx xx Xxxx 6/3/02 Montanana 4000 Westcon Group 4000 2002B8705
XX 000 Xxxxxxxx
00000 Xxxxxxxx et 24 Quai Operations
Galieni Limited
Dependent Du Meme
Immeuble (Angle de Rue)
------------------------------------------------------------------------------------------------------------------------------------
Westcom GmbH 4/26/02 Jens Westcon Group HRB 37241
Blumenberger StraBe 145-145 Montana European
D-41061 Monchengladbach, Xxxx Xxxx Operations
Xxxxxxx Xxxxx Limited
Second Amendment to Credit Agreement
Comstor Networking XX Xxxx Xxxxxxxxx
Avda. Diagnola 514 Montanana Xxxxxxx Westcon Group
00000 Xxxxxxxxx Xxxx Marc European
Xxxxx Operations
Limited
------------------------------------------------------------------------------------------------------------------------------------
Westcon Denmark ApSGmbH Jens
Xxxxxxxxxx 00, 0 xxx 5/9/02 Montanana 1250 Westcon Group 1250 26506743
2740 Skovlunde Xxxx Xxxx European
Denmark Xxxxx Operations
Limited
In liquidation
------------------------------------------------------------------------------------------------------------------------------------
Comstor Norway AS Jens
Kirkeveien 71B Montanana Westcon Group HRB37241
N-1305 Haslum Xxxx Xxxx European
Norway Xxxxx Operations
Limited
983 145 101
------------------------------------------------------------------------------------------------------------------------------------
Comstor Sweden AB Jens Mikael
Box 1093 5/3/02 Montanana Norrbin, MD 1000 Westcon Group 1000 556627-1879
000 00 Xxxxx Xxxx Xxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxx Xxxxx Operations
Limited
------------------------------------------------------------------------------------------------------------------------------------
Affiliates.
-----------
Datatec Limited and the following Datatec Limited subsidiaries:
Datatec Management Services (Pty) Ltd
RangeGate (Pty) Ltd
Westcon AME (Pty) Ltd
Affinity Logic Holdings (Pty) Ltd
Affinity Logic Management Services (Pty) Ltd
Affinity Logic (Pty) Ltd
Destiny Ecommerce (Pty) Ltd
Quickcut Pre Press Networks SA (Pty) Ltd
Logical (UK) Ltd
Logical e-Business Solutions Ltd
Logical GmbH
Logical Group Ltd
Logical Group Services Ltd (formerly Datatec Group Services Ltd)
Logical Group Services SA
Logical Networks GmbH Logical Networks SA
Logical South America Ltd
Second Amendment to Credit Agreement
Logical Strategy Ltd
Logical Technologies Group Ltd
Regreb BV
Satelcom UK Ltd
Catalyst IT Partners Ltd
Xxxxx Group Ltd
Xxxxx Communications Ltd
Xxxxx Communicatiosn Ireland Ltd
Datatec UK Holdings Ltd
Rangegate Mobile Solutions Ltd
Logical e-Business Solutions, Inc.
Logical Networks, Inc.
Logical US Holdings, Inc.
Network I US, Inc.
Softnet - Logical SA (formerly Softnet SA)
Softnet - Logical Paraguay S.A.
Softnet - Logical Urguay SA (formerly Softnet Uruguay SA)
Softnet-Logical Comercial Importadora, Exportadora e de Servicos Ltda
X-Net Cuyo SA
Logical Australia (Pty) Ltd (formerly Logical Systems (Pty) Ltd)
Logical Networks Ltd
Logical CSI Ltd
Logical Networks Ltd
Logical Secure Ltd
Mentum Secure Ltd
Datatec International Holdings Ltd
Online Distribution Ltd
Stock
-----
See Subsdiaries Schedule 4.4.
Stock Obligations.
------------------
Westcon Group, Inc. Stock Option Plan.
Stock Option Agreement between Westcon and Xxxx XxXxxxxxx dated July
17, 2002.
Stock Option Agreement between Westcon and Xxxx Xxxx Xxxxx dated July
1, 2001, as amended.
Put Option Agreement between Xxxx Xxxx Xxxxx and Westcon dated July 1,
2001.
Obligations (other than Indebtedness of Westcon, Borrowers and their
Subsidiaries)
--------------------------------------------------------------------
Second Amendment to Credit Agreement
Schedule 4.4
Other Obligations of Westcon, Borrowers and Subsidiaries
as of 4/30/03
See Schedule 1.1(a) and Schedule 4.18
Obligor Payee Obligation
------- ----- ----------
$600,000 deferred consideration regarding
Westcon Telesist acquisition of Westcon Brazil
Westcon UK IBM $7,588,550 Revolving Credit Facility
Datatec GBP6,584,506 Note
Datatec GBP3,800,000 Note
Comstor GmbH GE Capital $18,913,753 Inventory Financing
Agreement
Datatec E1,553,049 Note
Logical Germany $1,347,966
Comstor UK GE Capital $70,622,244 Inventory Financing
Agreement
Datatec GBP6,584,506
Datatec $3,800,000
Lan Systems ANZ Bank $2,916,401 Inventory Financing
Agreement
ANZ Bank $136,602 Capitalized lease
Comstor Networks
Singapore Westcon $3,340,083 Note
Westcon Group European
Holdings Limited Westcon $29,912,387 Acquisition costs and
expenses
Westcon Norway Nordea $202,433 Factoring Agreement
Westcon Sweden Nordea $1,348,485 Factoring Agreement
Second Amendment to Credit Agreement
Westcon Denmark Nordea $91,000 Factoring Agreement
Westcon France Fortis E15,000,000 Factoring Agreement
Westcon Deutschland " E5,000,000 Factoring Agreement
Westcon Netherlands " E6,000,000 Factoring Agreement
Westcon Belgium " E2,000,000 Factoring Agreement
Comstor Netherlands " E3,000,000 Factoring Agreement
Guarantees
----------
Intercompany
Guarantees
Guarantor Beneficiary Guaranteed Facility Limit
Westcon Group, Inc. Comstor UK DFS/Comstor UK/Comstor Gmbh $180,000,000
Westcon Group, Inc. Comstor GmbH " None
Westcon Group, Inc. Westcon UK IBM Revolver UK None
Westcon Group, Inc. Westcon America $40,000,000 Avaya Unsecured $40,000,000
Westcon Group, Inc. Datatec Limited Foreign Subsidiaries' prom. Notes None
Westcon Group, Inc. Westcon America Equipment Leases with NTFC None
No longer
Purchasing from
Westcon Group, Inc. Westcon America Lucent Technologies, Inc. Lucent
Westcon Group, Inc. Westcon America GE equipment purchases $5,000,000
Second Amendment to Credit Agreement
Westcon Group, Inc. Westcon Denmark ApS, Factoring Agreements with Nordea E4,000,000
Comstor Norway As, Finans Danmark AS
Comstor Sweden AB
Westcon Group, Inc. Westcon America $125,000,000 Cisco Unsecured $125,000,000
Westcon Group, Inc. Westcon (Deutschland) GmbH Factoring Agreement with Fortis E5,000,000
Westcon Belgium BVBA E2,000,000
Westcon France SAS E15,000,000
Westcon Netherlands BV E6,000,000
Comstor Netherlands BV E3,000,000
Second Amendment to Credit Agreement
