AMENDMENTS TO SECURITIZATION AGREEMENTS, WAIVER AND CONSENT
AMENDMENTS TO SECURITIZATION AGREEMENTS, WAIVER AND CONSENT,
dated as of October 16, 2000 (these "Amendments"), among MERISEL AMERICAS, INC.
("Merisel Americas"), MERISEL OPEN COMPUTING ALLIANCE, INC. ("MOCA"), MERISEL
CAPITAL FUNDING, INC. ("Merisel Capital Funding"), REDWOOD RECEIVABLES
CORPORATION ("Redwood") and GENERAL ELECTRIC CAPITAL CORPORATION ("GE Capital").
WHEREAS, Merisel Americas, as originator, and Merisel Capital
Funding are parties to an Amended and Restated Receivables Transfer Agreement,
dated as of September 27, 1996, as amended by Amendment No. 1, dated as of
November 7, 1996, Amendment No. 2, dated as of December 19, 1997, Amendment
No. 3, dated as of July 31, 1998, Amendment No. 4, dated as of March 10, 2000
and Amendment No. 5, dated as of August 18, 2000 (the "MAI Transfer Agreement");
WHEREAS, MOCA, as originator, and Merisel Capital Funding are
parties to a Receivables Transfer Agreement, dated as of March 10, 2000 (the
"MOCA Transfer Agreement");
WHEREAS, Merisel Capital Funding, as seller (in such capacity,
the "Seller"), Redwood, as purchaser (in such capacity, the "Purchaser"),
GE Capital, as operating agent (in such capacity, the "Operating Agent") and
collateral agent (in such capacity, the "Collateral Agent") and Merisel
Americas, as servicer (in such capacity, the "Servicer"), are parties to an
Amended and Restated Receivables Purchase and Servicing Agreement, dated as of
September 27, 1996, as amended by Amendment No. 1, dated as of November 7, 1996,
Amendment No. 2, dated as of December 19, 1997, Amendment No. 3, dated as of
July 31, 1998, Amendment No. 4, dated as of February 22, 1999, Amendment No. 5,
dated as of May 12, 1999, Amendment No. 6, dated as of August 13, 1999,
Amendment No. 7, dated as of March 10, 2000, Amendment No. 8, dated as of May
17, 2000 and Amendment No. 9, dated as of August 18, 2000 ("Amendment No. 9")
(the "Purchase Agreement");
WHEREAS, Redwood and GE Capital, in its capacity as Collateral
Agent, Letter of Credit Provider (in such capacity, the "LOC Provider") and
Letter of Credit Agent (in such capacity, the "LOC Agent") are parties to a
Second Amended and Restated Letter of Credit Reimbursement Agreement, dated as
of June 29, 1995 (the "Reimbursement Agreement"), and Redwood, the LOC Agent and
the LOC Provider are parties to a Reimbursement Agreement Supplement, dated as
of October 2, 1995, as amended by Amendment No. 1 to RFC Supplement, dated as of
December 19, 1997 and Amendment No. 2 to RFC Supplement dated as of July 31,
1998 (the "RFC Supplement");
WHEREAS, Redwood and GE Capital, as liquidity agent (in such
capacity, the "Liquidity Agent"), Operating Agent and Collateral Agent are
parties to a Liquidity Loan Agreement, dated as of October 2, 1995, as amended
by Amendment No. 1, dated as of July 31, 1998, Amendment No. 2, dated as of
March 10, 2000 and Amendment No. 3, dated as of May 17, 2000 (the "Liquidity
Loan Agreement");
WHEREAS, definitions and interpretations of the Purchase
Agreement, the MAI Transfer Agreement, the MOCA Transfer Agreement and the
Liquidity Loan Agreement are set forth in Annex X, dated as of September 27,
1996, as amended ("Annex X," and, together with the Purchase Agreement, the MAI
Transfer Agreement, the RFC Supplement and the Liquidity Loan Agreement, the
"Securitization Agreements");
WHEREAS, under Amendment No. 9 the parties to the Purchase
Agreement agreed, among other things, that the following events would constitute
additional Termination Events: (i) the failure to occur by September 30, 2000 of
the execution and delivery of an agreement for the sale of Merisel Americas (as
defined in Amendment No. 9, the "Proposed Sale Agreement") or delivery to the
Operating Agent of a formal plan for the disposition, winding down or
restructuring by Merisel Inc. and its Affiliates of its United States
distribution business, other than MOCA (as defined in Amendment No. 9, the "Plan
of Disposition") and (ii) the failure to occur by October 30, 2000 of (a) the
sale of Merisel Americas, Inc. (as defined in Amendment No. 9, the "Proposed
Sale"), (b) the commencement of a Plan of Disposition or (c) the repurchase by
the Seller of all Receivables originated by Merisel Americas that have been
acquired by the Purchaser (as defined in Amendment No. 9, the "MAI Facility
Unwind");
WHEREAS, the Seller failed to deliver by September 30, 2000 an
executed Proposed Sale Agreement or a Plan of Disposition and has informed the
Operating Agent that it will not (i) complete a Proposed Sale, (ii) commence a
Plan of Disposition or (iii) effect a MAI Facility Unwind;
WHEREAS, the Seller has advised the Operating Agent that
Merisel Americas, wishes to sell all of the outstanding capital stock of MOCA to
Arrow Electronics, Inc. ("Arrow") (the "MOCA Sale") pursuant to the Stock Sale
Agreement, dated as of September 15, 2000 (the "MOCA Sale Agreement"), by and
among Merisel, Inc., Merisel Americas, Inc. and Arrow and has requested that the
Operating Agent and the Purchaser consent to such sale;
WHEREAS, in connection with the MOCA Sale, (i) the Seller has
requested that the Purchaser sell to the Seller any Transferred Receivables
originated by MOCA (such Transferred Receivables, the "MOCA Receivables") that
have been purchased by the Purchaser pursuant to the Purchase Agreement, (ii)
the Seller has requested that the MOCA Transfer Agreement be terminated, (iii)
the parties hereto have agreed that the Maximum Purchase Limit be reduced to
$60,000,000 and (iv) the Seller has requested that any prepayment fee due
pursuant to Section 2.02(b) of the Purchase Agreement be waived;
WHEREAS, pursuant to the MOCA Receivables Purchase Termination
and Reassignment Agreement, to be entered into on the effective date of these
Amendments substantially in the form attached hereto as Schedule A (the "MOCA
Reassignment Agreement"), among MOCA, Merisel Americas, in its capacity as
Servicer, the Seller, the Purchaser, the Operating Agent and the Collateral
Agent, the Purchaser will sell to the Seller, and the Seller will purchase from
the Purchaser the MOCA Receivables, subject to the terms and conditions
contained therein,
WHEREAS, the Seller has further requested that the Operating
Agent and Purchaser (i) waive the compliance with the following covenants set
forth in Exhibit H: Fixed Charge Coverage Ratio, Net Worth Percentage, Tangible
Net Worth and Minimum EBITDA, (ii) waive the Termination Event set forth in
Section 9.01 relating to exceeding the maximum allowable Delinquency Ratio level
and (iii) agree to certain amendments of the Securitization Agreements all as
further set forth herein;
WHEREAS, the Insurer has requested that the Purchaser, the
Operating Agent and the Collateral Agent agree to the terminate the Insurance
Policy and Insurance Agreement;
WHEREAS, pursuant to the Termination Agreement, dated as of
the date hereof (the "Insurance Termination Agreement"), among the Insurer, the
Purchaser and GE Capital, the Insurance Policy and the Insurance Agreement will
be terminated; and
WHEREAS, subject to the terms and conditions contained herein,
the parties hereto wish to further amend the Securitization Agreements (such
amendments, together with the waiver and consent contained herein are
collectively referred to as these "Amendments").
FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND ADEQUACY
OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HERETO, INTENDING TO BE LEGALLY
BOUND HEREBY, AGREE AS FOLLOWS:
ARTICLE I : DEFINITIONS
SECTION 1.1 All capitalized terms used herein, unless otherwise defined,
are used as defined in the Purchase Agreement.
ARTICLE II: AMENDMENT NO. 10 TO PURCHASE AGREEMENT
AND AMENDMENT NO. 4 TO ANNEX X
SECTION 2.1 Amendment to Section 2.02(b). Section 2.02(b) of the Purchase
Agreement is hereby amended by deleting the last sentence therein.
SECTION 2.2 Amendment to Section 9.01. Section 9.01 of the Purchase
Agreement is hereby amended by (a) adding a new clause (z) to read as follows:
"(z) any default, or event that with a passage of time or the
giving of notice or both would constitute a default, under the MOCA Sale
Agreement; provided that such default would result in liability in excess of $1
million.
and (b) adding a new clause (aa) to read as follows:
"(aa) if the Canadian Facility is not replaced, refinanced or
extended by December 13, 2000; provided, that such replacement, refinancing or
extension shall be on substantially such terms and conditions that will result
in no material adverse effect to Merisel Canada, Inc. or Parent; and provided,
further that such replacement, refinancing or extension shall not mature prior
to February 1, 2001."
SECTION 2.3 All references in the Purchase Agreement and Annex X to "the
Insurer", "the Insurance Policy" "the Insurance Agreement" and "the Insurer
Draws" are hereby deleted and deemed to be of no further force and effect
including, without limitation, (i) any such references contained in the
definitions of "Affected Parties", "Purchaser Secured Parties" and "Related
Documents" and (ii) the provisions of Article VI of the Purchase Agreement
relating to payments to be made to the Insurer under certain circumstances. The
text in clauses (iii) and (iv) of Section 6.05(b) and clauses (ii) and (iii) of
Section 6.05(c) of the Purchase Agreement are hereby deleted in their entirety
and replaced with the reference to "Reserved".
SECTION 2.4 The definitions of "Defective Goods Reserve", "Delinquency Ratio"
and "Refused Shipment Reserve" are hereby amended by adding the phrase
"transferred under the MAI Transfer Agreement" after the term "Transferred
Receivables" each time such terms appears in such definitions.
SECTION 2.5 The definition of Gross Dilution Ratio is hereby amended and
restated to read as follows:
"Gross Dilution Ratio" means on any date of determination, the
ratio (expressed as a percentage) computed by dividing:
(a) an amount equal to the aggregate amount of Dilution Factors
reflected on the books of the Merisel Americas during the
three Settlement Periods preceding such day
by
(b) the Outstanding Balance of all Transferred Receivables
generated by Merisel Americas during the third, fourth and
fifth Settlement Periods preceding such day.
SECTION 2.6 The definition of "Final Purchase Date" is hereby changed to:
January 31, 2001.
SECTION 2.7 The definition of GDR which is contained in the definition of
Dilution Reserve is hereby amended to read as follows:
GDR = The greater of the Gross Dilution
Ratio and the One Month Gross
Dilution Ratio as of such date of
determination.
SECTION 2.8 The definition of "Maximum Purchase Limit" is hereby amended
and restated to read as follows:
"Maximum Purchase Limit" means (i) from and including the date
hereof to but excluding November 15, 2000, $60,000,000, (ii) from and including
November 15, 2000 to but excluding November 30, 2000, $50,000,000, (iii) from
and including November 30, 2000 to but excluding December 15, 2000, $40,000,000,
(iv) from and including December 15, 2000 to but excluding December 31, 2000,
$30,000,000, (v) from and including December 31, 2000 to but excluding January
15, 2001, $20,000,000 and (vi) from and including January 15, 2001 to but
excluding January 31, 2001, $10,000,000.
SECTION 2.9 A new definition of "Canadian Facility" is hereby added to read as
follows:
"Canadian Facility" means the Receivables Purchase Agreement,
dated as of December 15, 1995, between Merisel Canada, Inc. and The Trust
Company of Bank of Montreal, as trustee of the Canadian Master Trust.
SECTION 2.10 A new definition of "MOCA Sale Agreement" is hereby added to read
as follows:
"MOCA Sale Agreement" means the Stock Sale Agreement, dated
as of September 15, 2000, by and among Merisel, Inc., Merisel Americas, Inc. and
Arrow Electronics, Inc.
SECTION 2.11 A new definition of "One Month Gross Dilution Ratio" is hereby
added to read as follows:
"One Month Gross Dilution Ratio" means on any date of
determination, the ratio (expressed as a percentage) computed by dividing:
(a) an amount equal to the aggregate amount of Dilution
Factors reflected on the books of Merisel Americas during the most recent
Settlement Period preceding such day
by
(b) the Outstanding Balance of all Transferred Receivables
generated by Merisel Americas during the Settlement Period preceding such day.
ARTICLE III : AMENDMENT NO. 3 TO LIQUIDITY AGREEMENT
SECTION 3.1 (a) The definition of "Liquidity Commitment" in the Liquidity
Loan Agreement is hereby amended and restated to read
as follows: .
"Liquidity Commitment" means, at any time, the maximum principal amount
of Liquidity Loans that the Liquidity Lenders are obligated to make under this
Agreement, which amount shall not be greater at any time than the Applicable
Liquidity Commitment (which amount may be modified pursuant to the terms of
Section 3.02.)
(b) A new definition of "Applicable Liquidity
Commitment" is hereby added to read as follows:
"Applicable Liquidity Commitment" means (i)from and including the date
hereof to but excluding November 15, 2000, $61,800,000, (ii) from and including
November 15, 2000 to but excluding November 30, 2000, $51,500,000, (iii) from
and including November 30, 2000 to but excluding December 15, 2000, $41,200,000,
(iv) from and including December 15, 2000 to but excluding December 31, 2000,
$30,900,000, (v) from and including December 31, 2000 to but excluding January
15, 2001, $20,600,000 and (vi) from and including January 15, 2001 to but
excluding January 31, 2001, $10,300,000.
(c) Each reference in the Liquidity Loan Agreement
to $515,000,000 is hereby amended to read "the
Applicable Liquidity Commitment".
ARTICLE IV : AMENDMENT NO. 3 TO RFC SUPPLEMENT
SECTION 4.1 (a) The RFC Supplement is hereby amended by deleting
$500,000,000 as the Maximum Purchase Limit and substituting in lieu thereof:
"(i) from and including the date hereof to but excluding November 15,
2000, $60,000,000, (ii) from and including November 15 to but excluding November
30, 2000, $50,000,000, (iii) from and including November 30, 2000 to but
excluding December 15, 2000, $40,000,000, (iv) from and including December 15,
2000 to but excluding December 31, 2000, $30,000,000, (v) from and including
December 31, 2000 to but excluding January 15, 2001, $20,000,000 and (vi) from
and including January 15, 2001 to but excluding January 31, 2001, $10,000,000."
(b) amending and restating the LOC Draw percentage to be "25%".
ARTICLE V : WAIVER OF DEFAULT UNDER PURCHASE AGREEMENT
SECTION 5.1 The Operating Agent, the Collateral Agent and the Purchaser agree to
waive (i) compliance with the financial covenants in Exhibit H of the Purchase
Agreement for the fiscal quarter ended September 30, 2000 and any Incipient
Event or potential Termination Event resulting from the potential breach of the
Financial Covenants contained in Exhibit H of the Purchase Agreement for the
fiscal quarter ended September 30, 2000, (ii) the Termination Event specified in
Section 9.01 resulting from the Delinquency Ratio exceeding 6.5% for the fiscal
month ending August 26, 2000 and the fiscal month ending September 29, 2000 and
(iii) the Termination Events specified in Section 9.01 (x) and (y).
ARTICLE VI : CONSENT TO SALE OF MOCA
SECTION 6.1 The Operating Agent, the Collateral Agent and the Purchaser hereby
consent to the sale of MOCA to Arrow; provided that such sale is effectuated
substantially in accordance with the terms and conditions set forth in the MOCA
Sale Agreement and that all MOCA Receivables are acquired by MOCA directly from
Merisel Capital Funding. Subject to the agreement of the Operating Agent and the
Seller as to the Purchase Price of the MOCA Receivables and Reconveyance Amount
(each as defined in the MOCA Reassignment Agreement) and receipt (immediately
after such execution and delivery referred to below) by the Purchaser of an
amount equal to the Reconveyance Amount, the parties hereto agree to execute and
deliver the MOCA Reassignment Agreement on the date of effectiveness of the MOCA
Sale.
ARTICLE VII : CONDITIONS PRECEDENT
SECTION 7.1 The effectiveness of these Amendments is subject to the conditions
precedent that the Collateral Agent, the Operating Agent and the Purchaser shall
have received each of the following, in form and substance satisfactory to each
such party:
(a) Evidence satisfactory to the Operating Agent that all of the
obligations of Merisel Capital Funding and Arrow under the MOCA
Reassignment Agreement have been performed.
(b) A certificate of the Secretary of each of the Seller and the Servicer,
dated the date of these Amendments and certifying (i) that attached
thereto is a true and complete copy of a resolution of the Board of
Directors of the Seller or the Servicer, as the case may be,
authorizing the execution, delivery and performance of these Amendments
and the MOCA Reassignment Agreement, and all other documents required
or necessary to be delivered hereunder and that such resolution has not
been modified, rescinded or amended and is in full force and effect and
(ii) as to the incumbency and specimen signature of the Seller's and
the Servicer's officers executing these Amendments and the MOCA
Reassignment Agreement, and all other documents required or necessary
to be delivered hereunder.
(c) A certificate of an officer of each of the Seller and the Servicer,
dated the date of these Amendments, certifying that each of the
representations and warranties made by the Seller and the Servicer in
these Amendments and the MOCA Reassignment Agreement is true and
correct in all material respects as of the date hereof.
(d) The opinion of counsel to the Seller and Servicer, in form and
substance reasonably satisfactory to the Purchaser, the Operating
Agent and the Collateral Agent, as to certain matters including,
without limitation, (i) the valid existence and good standing of the
Seller and Servicer, (ii) the power and authority of the Seller and
Servicer (or Originator, as the case may be) to execute the Amendments
and the MOCA Reassignment Agreement, (iii) the due authorization,
execution and delivery of the Amendments by the Seller and Servicer
(or Originator, as the case may be), (iv) the enforceability of these
Amendments and the MOCA Reassignment Agreement against the Seller and
Servicer (or Originator, as the case may be) and (v) that the
execution and delivery of these Amendments and the MOCA Reassignment
Agreement (x) does not conflict with the organizational documents of
the Seller or Servicer and (y) does not violate or constitute a
default under any material financing agreements of the Seller or
Servicer.
(e) On or prior to the date of the MOCA Sale, an Investment Base
Certificate which reflects Transferred Receivables derived solely from
Merisel Americas in form and substance acceptable to the Operating
Agent.
(f) An Officer's Certificate in form and substance reasonably satisfactory
to the Operating Agent to the effect that all of the representations
and warranties in the Transfer Agreement and Purchase Agreement are
true and correct in all material respects as of the date hereof after
giving effect to these Amendments.
(g) The Seller shall pay the fees and expenses of the Purchaser incurred in
connection with preparing these Amendments (including, without
limitation, reasonable legal fees and expenses and all amounts due and
owing under the Amendment No. 10 Fee Letter).
(h) The Operating Agent shall have received written confirmation from the
Rating Agencies that these Amendments will not result in a withdrawal,
downgrade or qualification of the ratings assigned to the Commercial
Paper.
(i) Evidence reasonably satisfactory to the Operating Agent that the MOCA
Sale and the transactions contemplated by the MOCA Reassignment
Agreement shall have been consummated.
ARTICLE VIII : SELLER'S AND SERVICER'S REPRESENTATIONS AND WARRANTIES
SECTION 8.1 Each of the Seller and the Servicer represents and warrants that:
(a) these Amendments and the MOCA Reassignment Agreement have
been duly authorized, executed and delivered pursuant to its corporate power;
(b) these Amendments and the MOCA Reassignment Agreement
constitute its legal, valid and binding obligation subject to the effect of
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally; and
(c) after giving effect to these Amendments and the MOCA
Reassignment Agreement referred to herein, there does not exist any Termination
Event.
ARTICLE IX : MISCELLANEOUS
SECTION 9.1 Confirmation of Securitization Agreements. Each of the Seller and
the Servicer agree that, except for the specific amendments, waiver and consent
set forth herein, nothing herein shall be deemed to be a waiver or amendment of
any covenant or agreement contained in the Securitization Agreements and each of
the other documents executed in connection therewith are ratified and confirmed
in all respects and shall remain in full force and effect in accordance with its
terms. Each reference in the Transfer Agreement to "this Agreement" and in each
of the other documents to be executed in connection therewith to the "Transfer
Agreement," shall mean the Transfer Agreement as amended by these Amendments and
as each such agreement may be hereinafter amended or restated. Each reference in
the Purchase Agreement to "this Agreement" and in each of the other documents to
be executed in connection therewith to the "Purchase Agreement," shall mean the
Purchase Agreement as amended by these Amendments and as each such agreement may
be hereinafter amended or restated. Nothing herein shall obligate the Seller,
the Servicer, the Purchaser, the Operating Agent or the Collateral Agent to
enter into any future amendment (whether similar or dissimilar).
SECTION 9.2 Waiver by the Seller and Servicer. Except for manifest errors on the
part of the Operating Agent, each of the Seller and the Servicer hereby waives
any claim, defense, demand, action or suit of any kind or nature whatsoever
against the Purchaser, the Operating Agent and the Collateral Agent arising on
or prior to the date hereof in connection with the Purchase Agreement or the
transactions contemplated thereunder.
SECTION 9.3 Counterparts. Delivery of an executed counterpart of a signature
page to these Amendments by facsimile shall be effective as delivery of a
manually executed counterpart of these Amendments. These Amendments may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 9.4 Governing Law. These Amendments shall be governed by, and
construed in accordance with, California law.
SECTION 9.5 Effective Date of Amendments. Upon the execution and delivery of
these Amendments by the parties hereto and the satisfaction of the conditions
precedent set forth herein, the Purchase Agreement shall be amended by these
Amendments, effective as of the date of satisfaction of such conditions
precedent.
* * *
IN WITNESS WHEREOF, each Originator, the Seller, the Servicer,
the Collateral Agent, the Operating Agent, the Liquidity Agent, the LOC Agent,
the LOC Provider and the Purchaser have caused these Amendments to be duly
executed by their respective authorized officers as of the date and year first
above written.
MERISEL CAPITAL FUNDING, INC.,
as Seller
By:___________________________
Title:
Name:
MERISEL AMERICAS, INC.,
as Originator and Servicer
By:___________________________
Title:
Name:
MERISEL OPEN COMPUTING ALLIANCE, INC.
as Originator
By:___________________________
Title:
Name:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Operating Agent and Collateral Agent
By:___________________________
Title:
Name:
GENERAL ELECTRIC CAPITAL CORPORATION,
as LOC Agent, Liquidity Agent and LOC Provider
By:___________________________
Title:
Name:
REDWOOD RECEIVABLES CORPORATION,
as Purchaser
By:___________________________
Title:
Name: