EXHIBIT 10.46
FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is dated and is effective as of the 30th day of
June, 1998, among SED INTERNATIONAL HOLDINGS, INC. (formerly known as
SOUTHERN ELECTRONICS CORPORATION) and SED INTERNATIONAL, INC., jointly
and severally (collectively, the "Borrowers"), WACHOVIA BANK, N.A., as
Agent (the "Agent") and WACHOVIA BANK, N.A. and NATIONAL CITY BANK, as
Banks (collectively, the "Banks");
W I T N E S S E T H:
WHEREAS, the Borrowers, the Agent and the Banks executed and
delivered that certain $100,000,000 Amended and Restated Credit
Agreement, dated as of the 13th day of August, 1997, as amended by
that certain First Amendment to Amended and Restated Credit Agreement,
dated as of September 22, 1997, that certain Second Amendment to
Amended and Restated Credit Agreement, dated as of October 15, 1997,
and that certain Third Amendment to Amended and Restated Credit
Agreement, dated as of January 8, 1998 (as so amended, the "Credit
Agreement");
WHEREAS, the Borrowers have requested and the Agent and the Banks
have agreed to make certain amendments to the Credit Agreement,
subject to the terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises
and other good and valuable consideration, the receipt and sufficiency
of which hereby is acknowledged by the parties hereto, the Borrowers,
the Agent and the Banks hereby covenant and agree as follows:
1. Definitions. (a) Unless otherwise specifically defined
herein, each term used herein which is defined in the Credit Agreement
has the meaning assigned to such term in the Credit Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each
other similar reference and each reference to "this Agreement" and
each other similar reference contained in the Credit Agreement from
and after the date hereof refer to the Credit Agreement as amended
hereby.
(b) The definitions of "Adjusted Current Ratio," "Income
Available for Fixed Charges" and "Consolidated Fixed Charges" set
forth in Section 1.01 of the Credit Agreement are deleted in their
entirety.
(c) The following definitions set forth in Section 1.01 of the
Credit Agreement are amended and restated in their entirety as set
forth below:
"Borrowing" means a borrowing hereunder consisting of Loans
made to either Borrower (i) at the same time by all of the Banks,
in the case of a Syndicated Loan, Overnight Loan, or
Discretionary Loan, or (ii) separately by Wachovia, in the case
of a Swing Borrowing, in each case pursuant to Article II. A
Borrowing is a "Syndicated Borrowing" if such Loans are made
pursuant to Section 2.01(a), (c) or (d), or a "Swing Borrowing"
if such Loans are made pursuant to Section 2.01(b). A Borrowing
is a "Base Rate Borrowing" if such Loans are Base Rate Loans, or
a "Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans.
"Interest Period" means: (1) with respect to each
Euro-Dollar Borrowing that is: (x) a Discretionary Loan, the
period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the first or second month
thereafter, as the relevant Borrower may elect in the applicable
Notice of Borrowing; (y) an Overnight Loan, the period commencing
on the date of such Borrowing and ending on the next day after
the date of such Borrowing; and (z) not a Discretionary Loan or
an Overnight Loan, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the
first, second, third or sixth month thereafter, as the relevant
Borrower may elect in the applicable Notice of Borrowing;
provided that, with respect to all Euro-Dollar Borrowings:
(a) any Interest Period (subject to paragraph (c)
below) which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) (except for Overnight Loans) any Interest Period
which begins on the last Euro-Dollar Business Day of a
calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent
calendar month) shall, subject to paragraph (c) below, end
on the last Euro-Dollar Business Day of the appropriate
subsequent calendar month; and
(c) no Interest Period may be selected which begins
before the Termination Date and would otherwise end after
the Termination Date.
(2) with respect to each Base Rate Borrowing that is: (x) an
Overnight Loan, the period commencing on the date of such
Borrowing and ending on the next day after the date of such
Borrowing; and (y) not an Overnight Loan, the period commencing
on the date of such Borrowing and ending 30 days thereafter;
provided that:
(a) any Interest Period (subject to paragraph (b)
below) which would otherwise end on a day which is not a
Domestic Business Day shall be extended to the next
succeeding Domestic Business Day; and
(b) no Interest Period which begins before the
Termination Date and would otherwise end after the
Termination Date may be selected.
"Loan" means a Base Rate Loan, Euro-Dollar Loan, Syndicated
Loan, Discretionary Loan, Overnight Loan, or Swing Loan, and
"Loans" means Base Rate Loans, Euro-Dollar Loans, Syndicated
Loans, Discretionary Loans, Overnight Loans, Swing Loans, or any
or all of them, as the context shall require.
"SEC" means SED International Holdings, Inc., formerly known
as Southern Electronics Corporation, a Delaware corporation.
"Syndicated Loans" means Base Rate Loans or Euro-Dollar
Loans made pursuant to the terms and conditions set forth in
Section 2.01, and includes, without limitation, Overnight Loans.
"Termination Date" means whichever is applicable of (i) July
30, 2001, (ii) the date the Commitments are terminated pursuant
to Section 7.01 following the occurrence of an Event of Default,
or (iii) the date the Borrowers terminate the Commitments
entirely pursuant to Section 2.07.
(d) The following new definitions are added to Section 1.01 of
the Credit Agreement in proper alphabetical order:
"Availability" means the amount of Loans (excluding
Discretionary Loans) which the Borrowers are entitled to borrow
at any time pursuant to Section 2.01.
"Borrowing Base Reporting Date" means each date the
Borrowers deliver Borrowing Base Certificates to the Agent.
"Compliance Reporting Date" means each date the Borrowers
deliver Compliance Certificates to the Agent.
"EBITDA" means for any period the sum of (i) Consolidated
Net Income, (ii) taxes on income, (iii) Consolidated Interest
Expense, (iv) depreciation expense, and (v) amortization expense,
all determined with respect to the Borrowers and the Consolidated
Subsidiaries on a consolidated basis for such period and in
accordance with GAAP.
"Monthly Reporting Period" means a period which commences on
the most recent previous Borrowing Base Reporting Date and
continues so long as Availability remains greater than
$20,000,000 during such entire period.
"Overnight Loans" has the meaning set forth in Section
2.01(d).
"Quarterly Reporting Period" means a period which commences
on the most recent previous Compliance Reporting Date and
continues so long as Availability remains greater than
$50,000,000 during such entire period.
2. Addition of New Section 2.01(d). A new Section 2.01(d) is
added to the Credit Agreement as set forth below:
(d) Overnight Loans. Upon request by the Borrowers in a
Notice of Borrowing, the Banks shall advance (in the amount of
their pro rata Commitment percentage) to either Borrower an
overnight loan (such Loan is hereinafter referred to as an
"Overnight Loan"); provided, however, that, in no event shall the
aggregate outstanding principal balance of all Overnight Loans
exceed $10,000,000 at any one time. Each Overnight Loan shall
bear interest as set forth in Section 2.05. All Overnight Loans
shall be evidenced by the Syndicated Loan Notes. During the
existence of an Event of Default, the Borrowers may not request
Overnight Loans, and all outstanding Overnight Loans shall be
refinanced by a Refunding Loan consisting of a Base Rate Loan at
the end of the relevant Interest Period.
3. Amendment to Section 2.04(a). Section 2.04(a) of the Credit
Agreement is hereby amended by deleting such Section in its entirety
and substituting therefor the following:
SECTION 2.04. Maturity of Loans. (a) Each Loan included in
any Borrowing shall mature, and the principal amount thereof
shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
4. Amendment to Section 2.05(a). Section 2.05(a) of the Credit
Agreement is hereby amended by deleting such Section in its entirety
and substituting therefor the following:
(a) "Applicable Margin" means:
(i) with respect to Euro-Dollar Loans, for the period
commencing on June 30, 1998, to and including the first
Performance Pricing Determination Date thereafter, 1.00%; and
(ii) with respect to Base Rate Loans on and after June 30,
1998, and with respect to Euro-Dollar Loans, from and after the
first Performance Pricing Determination Date after June 30, 1998,
the percentage determined on each Performance Pricing
Determination Date by reference to the table set forth below as
to such type of Loan and the Leverage Ratio calculated by the
Agent from the most recent 10-Q quarterly statement described in
Section 6.01(i) for the quarterly period ending immediately prior
to such Performance Pricing Determination Date.
Leverage Applicable Base Rate Base Rate
Ratio Margin for Loans Loans
Euro-Dollar (Other than (Overnight
Loans Overnight Loans Only)
Loans)
LESS THAN OR EQUAL TO 1.0 0.75% 0.0% -0.50%
GREATER THAN 1.0 and
LESS THAN OR EQUAL TO 2.0 1.00% 0.0% -0.50%
GREATER THAN 2.0 and
LESS THAN OR EQUAL TO 2.5 1.25% 0.0% -0.50%
GREATER THAN 2.5 and
LESS THAN OR EQUAL TO 3.5 1.50% 0.0% -0.50%
GREATER THAN 3.5 and
LESS THAN OR EQUAL TO 5.0 1.75% 0.0% -0.50%
GREATER THAN 5.0 2.00% 0.0% -0.50%
In determining interest for purposes of this Section 2.05
and fees for purposes of Section 2.06, the Borrowers and the
Banks shall refer to the Borrowers' most recent 10-Q consolidated
quarterly financial statements delivered pursuant to Section
6.01(i). If such financial statements require a change in
interest pursuant to this Section 2.05 or fees pursuant to
Section 2.06, the Borrowers shall deliver to the Agent, along
with such financial statements, a notice to that effect, which
notice shall set forth in reasonable detail the calculations
supporting the required change. The "Performance Pricing
Determination Date" is the fifth day after the date of receipt of
such financial statements pursuant to Section 6.01(i). Any such
required change in interest and fees shall become effective on
such Performance Pricing Determination Date, and shall be in
effect until the next Performance Pricing Determination Date,
provided that: (i) for Euro-Dollar Loans, changes in interest
shall only be effective for Interest Periods commencing on or
after the Performance Pricing Determination Date; and (ii) no
fees or interest shall be decreased pursuant to this Section 2.05
or Section 2.06 if a Default is in existence on the Performance
Pricing Determination Date. In the event that the Borrowers fail
to deliver their 10-Q quarterly financial statements to the Agent
and the Banks on or before the 45th day after the end of any
Fiscal Quarter, then the Applicable Margin shall be the highest
Applicable Margin then in effect until the next Performance
Pricing Determination Date.
5. Amendment to Section 2.06(a). Section 2.06(a) of the Credit
Agreement is hereby amended by deleting such Section in its entirety
and substituting therefor the following:
(a) The Borrowers shall pay to the Agent, for the ratable
account of each Bank, a commitment fee, in accordance with
procedures described in 2.05(a)(ii), on the average daily amount
of such Bank's Unused Commitment, at a rate per annum equal to:
(i) for the period commencing on June 30, 1998 to and including
the first Performance Pricing Determination Date thereafter,
0.125%; and (ii) from and after the first Performance Pricing
Determination Date after June 30, 1998, the percentage determined
on each Performance Pricing Determination Date by reference to
the table set forth below and the Leverage Ratio for the
quarterly or annual period ending immediately prior to such
Performance Pricing Determination Date:
Leverage Ratio Commitment Fee
LESS THAN OR EQUAL TO 1.0 0.125%
GREATERN THAN 1.0 and
LESS THAN OR EQUAL TO 2.0 0.125%
GREATER THAN 2.0 and
LESS THAN OR EQUAL TO 2.5 0.250%
GREATER THAN 2.5 and
LESS THAN OR EQUAL TO 3.5 0.250%
GREATER THAN 3.5 and
LESS THAN OR EQUAL TO 5.0 0.250%
GREATER THAN 5.0 0.250%
Such commitment fees shall accrue from and including the Closing Date
to but excluding the Termination Date and shall be payable on each
March 31, June 30, September 30 and December 31 and on the Termination
Date.
6. Addition of Section 5.18. The Credit Agreement hereby is
amended by adding the following Section 5.18.
SECTION 5.18 Millennium Compliance. The Borrowers have
implemented a plan, which plan is currently on schedule, to make
certain that all computer systems used by the Borrowers and their
Subsidiaries are capable of the following, before, during and/or
after January 2000:
(a) handling date information involving all and any
dates before, during and/or after January 1, 2000, including
accepting input, providing output and performing date
calculations in whole or in part;
(b) operating, accurately without interruption on and
in respect of any and all dates before, during and/or after
January 1, 2000 and without any change in performance;
(c) responding to and processing two digit year input
without creating any ambiguity as to the century; and
(d) storing and providing date input information
without creating any ambiguity as to the century.
7. Amendment to Section 6.01. Sections 6.01(c) and (f) of the
Credit Agreement are hereby amended by deleting such Sections 6.01(c)
and (f) in their entirety and substituting therefor the following:
(c) simultaneously with the delivery of each set of
financial statements referred to in paragraphs (a) and (b) above
(or, so long as no Default or Event of Default exists, during any
Quarterly Reporting Period, with respect to paragraph (b), only
for such months at the end of each Fiscal Quarter), a
certificate, substantially in the form of Exhibit H (a
"Compliance Certificate"), of the chief financial officer or the
chief accounting officer of each of the Borrowers (i) setting
forth in reasonable detail the calculations required to establish
whether the Borrowers were in compliance with the requirements of
Sections 6.05, 6.15, 6.18, and 6.20 through 6.24, inclusive, on
the date of such financial statements and (ii) stating whether
any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the
action which the Borrowers are taking or proposes to take with
respect thereto;
(f) at the end of each calendar week (or, so long as no
Default or Event of Default exists, during any Monthly Reporting
Period, at the end of each Fiscal Month) a Borrowing Base
Certificate (a "Borrowing Base Certificate") in substantially the
form of Exhibit F, setting forth the calculations of the
Borrowing Base, as of such date as of the date of report
submission, certified as to truth and accuracy by a duly
authorized officer of each of the Borrowers.
8. Amendment to Section 6.15. Section 6.15 of the Credit
Agreement is hereby amended by deleting such Section in its entirety
and substituting therefor the following:
SECTION 6.15. Restricted Payments. SEC will not declare or
make any Restricted Payment in any Fiscal Year after December 31,
1996 unless (a) such Restricted Payments are made for the
redemption or repurchase of capital stock of SEC and do not
exceed an aggregate cumulative amount equal to $12,000,000, or
(b) if the aggregate amount of such Restricted Payments
(exclusive of Restricted Payments allowed in the foregoing clause
(a)) for such Fiscal Year would exceed 15% of cumulative
Consolidated Net Income for the prior Fiscal Year (commencing
after December 31, 1996); provided that after giving effect to
the payment of any such Restricted Payments in such clauses (a)
or (b), no Default shall be in existence or be created thereby.
9. Amendment to Section 6.20. Section 6.20 of the Credit
Agreement is hereby amended by deleting such Section in its entirety
and substituting therefor the following:
SECTION 6.20. Leverage Ratio. Tested at the end of each
Fiscal Month, the Leverage Ratio shall not at any time exceed 5.5
to 1.0.
10. Amendment to Section 6.21. Section 6.21 of the Credit
Agreement is hereby amended by deleting such Section in its entirety
and substituting therefor the following:
SECTION 6.21. Fixed Charges Coverage. Tested at the end of
each Fiscal Month, the ratio of EBITDA to Consolidated Interest
Expense (such ratio being calculated for the Fiscal Month just
ended and the immediately preceding 11 Fiscal Months) shall not
at any time be less than 3.0 to 1.0.
11. Deletion of Sections 6.22 and 6.23. Without affecting the
numbering of Sections in the Credit Agreement, Sections 6.22 and 6.23
are deleted in their entirety.
12. Amendment to Section 6.24. Section 6.24 of the Credit
Agreement is hereby amended by deleting such Section in its entirety
and substituting therefor the following:
SECTION 6.24. Minimum Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth will at no time be less than (x)
$90,000,000 plus (y) the sum of (i) 100% of the cumulative
Reported Net Income of the Borrowers and the Consolidated
Subsidiaries during any period after June 30, 1998 (taken as one
accounting period), calculated monthly at the end of each month
(but excluding from such calculations of Reported Net Income for
purposes of this clause (i), any month in which the Reported Net
Income of the Borrowers and the Consolidated Subsidiaries is
negative), and (ii) 100% of the cumulative Net Proceeds of
Capital Stock received during any period after June 30, 1998,
calculated monthly at the end of each month, minus the sum of (a)
amounts paid to date for the redemption or repurchase of capital
stock of SEC not exceeding an aggregate cumulative amount equal
to $12,000,000, plus (b) amounts attributed to goodwill related
to assets acquired after March 31, 1998, not exceeding an
aggregate cumulative amount equal to $6,000,000.
13. Exhibits and Schedules. The Compliance Certificate attached
to Exhibit H of the Credit Agreement is amended and restated in its
entirety as set forth on Exhibit A to this Amendment. Exhibit E to
the Credit Agreement is amended and restated in its entirety as set
forth on Exhibit A to this Amendment. Schedule 5.08 to the Credit
Agreement is amended and restated in its entirety as set forth on
Exhibit C to this Amendment.
14. Restatement of Representations and Warranties. Each of the
Borrowers hereby restates and renews each and every representation and
warranty heretofore made by it in the Credit Agreement and the other
Loan Documents as fully as if made on the date hereof and with
specific reference to this Amendment and all other loan documents
executed and/or delivered in connection herewith.
15. Effect of Amendment. Except as set forth expressly
hereinabove, all terms of the Credit Agreement and the other Loan
Documents remain in full force and effect, and constitute the legal,
valid, binding and enforceable obligations of the Borrowers. The
amendments contained herein will be deemed to have prospective
application only, unless otherwise specifically stated herein.
16. Ratification. Each of the Borrowers hereby restates,
ratifies and reaffirms each and every term, covenant and condition set
forth in the Credit Agreement and the other Loan Documents effective
as of the date hereof.
17. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered will be
deemed to be an original and all of which counterparts, taken
together, will constitute but one and the same instrument.
18. Section References. Section titles and references used in
this Amendment have substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties
hereto evidenced hereby.
19. No Default; Release. To induce the Agent and the Banks to
enter into this Amendment and to continue to make advances pursuant to
the Credit Agreement, each of the Borrowers hereby acknowledges and
agrees that, as of the date hereof, and after giving effect to the
terms hereof, (i) there exists no Default or Event of Default,
(ii) there exists no right of offset, defense, counterclaim, claim or
objection in favor of the Borrowers arising out of or with respect to
any of the Loans or other obligations of the Borrowers owed to the
Banks under the Credit Agreement, and (iii) the Agent and each of the
Banks has acted in good faith and has conducted its relationships with
each of the Borrowers in a commercially reasonable manner in
connection with the negotiations, execution and delivery of this
Amendment and in all respects in connection with the Credit Agreement,
each of the Borrowers hereby waiving and releasing any such claims to
the contrary. A default or breach of representation or warranty by the
Borrowers under this Amendment shall constitute an Event of Default
under the Credit Agreement.
20. Further Assurances. Each of the Borrowers agrees to take
such further actions as the Agent reasonably requests in connection
herewith to evidence the amendments herein contained to the Borrowers.
21. Governing Law. This Amendment is governed by, and construed
and interpreted in accordance with, the laws of the State of Georgia.
22. Waiver of Subsidiary Guaranty and Security Agreement. The
Agent and the Banks hereby agree that the acquisition of the capital
stock of SED International de Colombia, Ltda. (the "Colombian
Subsidiary") shall be deemed to be a Permitted Acquisition and waive
any Default or Event of Default that occurred as a result such
Investment in an amount not exceeding $2,000,000 in the Columbian
Subsidiary without complying with Section 6.17 with respect thereto;
provided, however, such waiver shall not extend to any future failure
to comply with Section 6.17 hereafter. As consideration for the
Agent's and the Banks' agreements contained in this paragraph, the
Borrowers' represent and warrant that all requirements set forth in
the definition of "Permitted Acquisitions" other than under clauses
(iv) and (v) thereof have been satisfied in full with respect to the
Borrowers' Investment in the Columbian Subsidiary.
23. Conditions Precedent. This Amendment becomes effective as
of June 30, 1998 only upon (i) execution and delivery of this
Amendment by each of the parties hereto, and (ii) execution and
delivery of (A) new UCC financing statements to be filed in order to
perfect the Agent's security interest in Collateral at the Borrowers'
new Harrisburg, Pennsylvania location, and (B) to the extent not
previously delivered, new UCC financing statements and amendments
reflecting the name change of "SOUTHERN ELECTRONICS CORPORATION" to
"SED INTERNATIONAL HOLDINGS, INC."
IN WITNESS WHEREOF, the Borrowers, the Agent and each of the
Banks has caused this Amendment to be duly executed, under seal, by
its duly authorized officer as of the day and year first above
written.
SED INTERNATIONAL HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
Title: V.P. Finance
SED INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
Title: V.P. Finance
WACHOVIA BANK, N.A.,
as Agent and as a Bank
By: /s/ ▇▇▇▇ Shawl (SEAL)
Title: Vice President
NATIONAL CITY BANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (SEAL)
Title: Vice President
EXHIBIT A TO FOURTH AMENDMENT
COMPLIANCE CHECK LIST
SOUTHERN ELECTRONICS CORPORATION
SED INTERNATIONAL, INC.
_________________________________
___________________ , _____
1. Consolidations, Mergers and Sales of Assets. (Section 6.05.)
The Borrowers will not, nor will it permit any Subsidiary to,
consolidate or merge with or into, or sell, lease or otherwise
transfer all or any substantial part of its assets to, any other
Person, or discontinue or eliminate any business line or segment,
provided that (a) either Borrower may merge with another Person
if (i) such Person was organized under the laws of the United
States of America or one of its states, (ii) such Borrower is the
corporation surviving such merger and (iii) immediately after
giving effect to such merger, no Default shall have occurred and
be continuing, (b) the Borrowers may merge with one another and
Subsidiaries of the Borrowers may merge with one another, and (c)
the foregoing limitation on the sale, lease or other transfer of
assets and on the discontinuation or elimination of a business
line or segment shall not prohibit (A) transfers of Accounts to
insurers permitted by Section 6.26 or (B) during any Fiscal
Quarter, a transfer of assets or the discontinuance or
elimination of a business line or segment (in a single
transaction or in a series of related transactions) unless the
aggregate assets to be so transferred or utilized in a business
line or segment to be so discontinued, when combined with all
other assets transferred, and all other assets utilized in all
other business lines or segments discontinued, during such Fiscal
Quarter and the immediately preceding 3 Fiscal Quarters, either
(x) constituted more than 2% of Consolidated Total Assets at the
end of the most recent Fiscal Year immediately preceding such
Fiscal Quarter, or (y) contributed more than 2% of Consolidated
Operating Profits during the 4 Fiscal Quarters immediately
preceding such Fiscal Quarter.
(a) Value of assets transferred or business
lines or segments discontinued $________
(b) Consolidated Total Assets $________
(c) 2% of (b) $________
(d) Consolidated Operating Profits - Schedule 1 $________
(e) 2% of (d) $________
Limitation (a) not to exceed (c) or (e)
2. Restricted Payments (Section 6.15)
SEC will not declare or make any Restricted Payment in any Fiscal
Year after December 31, 1996 unless (a) such Restricted Payments
are made for the redemption or repurchase of capital stock of SEC
and do not exceed an aggregate cumulative amount equal to
$12,000,000, or (b) if the aggregate amount of such Restricted
Payments (exclusive of Restricted Payments allowed in the
foregoing clause (a)) for such Fiscal Year would exceed 15% of
cumulative Consolidated Net Income for the prior Fiscal Year
(commencing after December 31, 1996); provided that after giving
effect to the payment of any such Restricted Payments in such
clauses (a) or (b), no Default shall be in existence or be
created thereby.
(a) Restricted Payments after
December 31, 1996 $________
(b) cumulative Consolidated Net Income
after December 31, 1996 $________
(c) 15% of (b) $________
Limitation: (a) may not exceed (c)
(d) Aggregate cumulative redemption and
repurchases of SEC capital stock to date $_________
(e) Limitation $12,000,000
3. Priority Debt (Section 6.18)
None of the Borrowers' nor any Consolidated Subsidiary's property
is subject to any Lien securing Debt, except for:
Description of Lien and Property Amount of Debt
subject to same Secured
a. ___________________________ $_____________
b. ___________________________ $_____________
c. ___________________________ $_____________
d. ___________________________ $_____________
e. ___________________________ $_____________
f. ___________________________ $_____________
g. ___________________________ $_____________
Total $=============
Aggregate Debt secured by purchase
money Liens permitted by
Section 6.18(k) $___________
Limitation: $1,500,000
4. Leverage Ratio (Section 6.20)
Tested at the end of each Fiscal Month, the Leverage Ratio shall
not at any time exceed 5.5 to 1.0.
(a) Debt - Schedule 3 $_____________
(b) Consolidated Tangible Net
Worth - Schedule 4 $_____________
Actual Ratio of (a) to (b)
Maximum Ratio 5.5 to 1.0
5. Fixed Charges Coverage (Section 6.21)
Tested at the end of each Fiscal Month, the ratio of EBITDA to
Consolidated Interest Expense (such ratio being calculated for
the Fiscal Month just ended and the immediately preceding 11
Fiscal Months) shall not at any time be less than 3.0 to 1.0.
(a) EBITDA - Schedule 2 $____________
(b) Consolidated Interest
Expense - Schedule 2 $____________
Ratio of (a) to (b) ____ to 1.0
Requirement GREATER THAN OR EQUAL TO 3.0 to 1.0
6. Minimum Consolidated Tangible Net Worth (Section 6.24)
Consolidated Tangible Net Worth will at no time be less than (x)
$90,000,000 plus (y) the sum of (i) 100% of the cumulative
Reported Net Income of the Borrowers and the Consolidated
Subsidiaries during any period after June 30, 1998 (taken as one
accounting period), calculated monthly at the end of each month
(but excluding from such calculations of Reported Net Income for
purposes of this clause (i), any month in which the Reported Net
Income of the Borrowers and the Consolidated Subsidiaries is
negative), and (ii) 100% of the cumulative Net Proceeds of
Capital Stock received during any period after June 30, 1998,
calculated monthly at the end of each month, minus (z) amounts
paid to date for the redemption or repurchase of capital stock of
SEC not exceeding an aggregate cumulative amount equal to
$12,000,000.
(a) $90,000,000
(b) positive Reported Net Income
after June 30, 1998 $____________
(c) cumulative Net Proceeds of Capital
Stock received after June 30, 1998 $____________
(d) amounts paid to date for the
redemption or repurchase of capital
stock of SEC (limited to an amount not exceeding
an aggregate cumulative amount
equal to $12,000,000) $____________
(e) amounts attributed to goodwill related to
assets acquired after March 31, 1998 not
exceeding an aggregate cumulative amount
equal to $6,000,000 $____________
Actual Consolidated Tangible
Net Worth - Schedule 4 $_______
Required Consolidated Tangible Net
Worth (sum of (a) plus (b) plus (c)
minus (d)) $____________
Schedule 1
Consolidated Operating Profits
Consolidated Operating Profits
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
Total $_________
Schedule 2
EBITDA
Consolidated Net Income for:
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
Total $_________
Income taxes for:
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
Total $_________
Depreciation expense for:
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
Total $_________
Amortization expense for:
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
Total $_________
Consolidated Interest Expense for:
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
__ quarter 199_ $_________
Total $_________
Total EBITDA $_________
Schedule 3
Debt
INTEREST
RATE MATURITY TOTAL
Secured
______________________________ ________ _______ $________
______________________________ ________ _______ $________
______________________________ ________ _______ $________
______________________________ ________ _______ $________
______________________________ ________ _______ $________
Total Secured $___________
Unsecured
______________________________ ________ _______ $________
______________________________ ________ _______ $________
______________________________ ________ _______ $________
______________________________ ________ _______ $________
Total Unsecured $__________
Guarantees
_______________________________________________________ $________
_______________________________________________________ $________
Total $__________
Redeemable Preferred Stock $________
Total $__________
Other Liabilities
_______________________________________________________ $________
_______________________________________________________ $________
_______________________________________________________ $________
Total Debt $=========
Schedule 4
Consolidated Tangible Net Worth
Stockholders' Equity $__________
Less:
Surplus from write-up of assets subsequent
to ______________, 19__ $__________
Intangibles $__________
Loans to stockholders, directors
officers or employees $__________
Capital Stock shown as assets $__________
Deferred expenses $__________
Consolidated Tangible Net Worth $==========
Intangibles Description
(a)______________________________ $__________
(b)______________________________ $__________
(c)______________________________ $__________
Other $__________
Total $==========
1 To the extent not included above as an Intangible.
EXHIBIT B TO FOURTH AMENDMENT
EXHIBIT E
NOTICE OF BORROWING
__________________ , 199_
Wachovia Bank, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Commercial Group
Re: Amended and Restated Credit Agreement (as amended and
modified from time to time, the "Credit Agreement") dated as
of August 13, 1997 by and among Southern Electronics
Corporation and SED International, Inc., as the Borrowers,
the Banks from time to time parties thereto, and Wachovia
Bank, N.A., as Agent.
Gentlemen:
Unless otherwise defined herein, capitalized terms used herein
shall have the meanings attributable thereto in the Credit Agreement.
This Notice of Borrowing is delivered to you pursuant to Section
2.02 of the Credit Agreement.
The undersigned Borrower hereby requests a [Euro-Dollar Borrowing]
[Swing Borrowing] [Syndicated Borrowing which is a Base Rate Borrowing]
[Discretionary Borrowing] [Overnight Borrowing] in the aggregate principal
amount of $__________ to be made on _____________ , 199__, and for interest
to accrue thereon at the rate established by the Credit Agreement for
[Euro-Dollar Loans] [Base Rate Loans]. The duration of the Interest Period
with respect thereto shall be [1 day -- applicable solely for Overnight
Borrowings] [30 days] [60 days] [90 days -- not available for Discretionary
Loans].
The amount available to be borrowed under Section 2.01 of the
Credit Agreement, net of amounts to be paid with the proceeds of this
Borrowing, is as follows:
(a) Aggregate Commitments $__________
(b) Borrowing Base per most recent
Borrowing Base Certificate (minus $__________
Discretionary Loans)
PAGE
(c) Principal amount outstanding under
Syndicated Loans $__________
(d) Principal amount outstanding under
Swing Loans $__________
(e) Aggregate outstanding principal amount
of Letter of Credit Obligations $__________
(f) Amount available to be borrowed
(lesser of: (a); or sum of (b), less
(c) less (d) less (e) $__________
The undersigned Borrower has caused this Notice of Borrowing to be
executed and delivered by its duly authorized officer this _____ day of ___
_____, 199__ .
[SED INTERNATIONAL HOLDINGS, INC.]
[SED INTERNATIONAL, INC.]
By:
Title:
EXHIBIT C TO FOURTH AMENDMENT
[TO BE UP-DATED]
Schedule 5.08
Subsidiaries of SED INTERNATIONAL HOLDINGS, INC.
Name Jurisdiction of Incorporation
SED International, Inc. Delaware
SED Magna Distribuidora Ltda. Brazil
SED International de Columbia, Ltda.
Subsidiaries of SED INTERNATIONAL, INC.
Name Jurisdiction of Incorporation
None.