AMENDMENTS TO SECURITIZATION AGREEMENTS
AMENDMENTS TO SECURITIZATION AGREEMENTS, dated as of
July 31, 1998, among MERISEL AMERICAS, INC ("Merisel Americas"),
MERISEL CAPITAL FUNDING, INC. ("Merisel Capital Funding"), REDWOOD
RECEIVABLES CORPORATION ("Redwood") and GENERAL ELECTRIC CAPITAL
CORPORATION ("GE Capital").
WHEREAS, Merisel Americas, as originator (in such
capacity, the "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, and Amendment No. 2, dated as of December 19, 1997 (the
"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 (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, and Amendment No. 2,
dated as of December 19, 1997 (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 (the "RFC Supplement");
WHEREAS, Redwood and GE Capital, in its capacity as
Liquidity Agent, Operating Agent and Collateral Agent are parties to a
Liquidity Loan Agreement, dated as of October 2, 1995 (the "Liquidity
Agreement");
WHEREAS, definitions and interpretations of the
Transfer Agreement and Purchase Agreement are set forth in Annex X
thereto, dated as of September 27, 1996, as amended on December 19,
1997 ("Annex X," and, together with the Transfer Agreement, the
Purchase Agreement, the Reimbursement Agreement, the RFC Supplement,
and the Liquidity Agreement, the "Securitization Agreements"); and
WHEREAS, the parties hereto desire to amend the
Securitization Agreements (such amendment collectively referred to
herein as the "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 Definitions. All capitalized terms used
herein, unless otherwise defined, are used as defined in the Purchase
Agreement.
ARTICLE II
AMENDMENT NO. 2 TO ANNEX X
Section 2.1 Amendment to Annex X. Annex X is hereby
amended as set forth in this Section 2.1. (a) The definition of
"Additional Amounts" is hereby amended by replacing the word "and" with
a comma and adding after the reference to "2.11" the phrase "and 2.13".
(b) The definition of "Adverse Claim is hereby
amended by adding the following after the term "Collateral Agent
Agreement":
"or under the Inventory Facility"
(c) The definition of "Affected Parties" is amended
by adding "the Insurer" as one of the parties named therein.
(d) The definition of "Availability" is hereby
amended by adding at the end of clause (a)(iii) of such definition the
following: "and the Dilution Reserve."
(e) The definition of "Final Purchase Date" is hereby
amended to be July 31, 2003.
(f) The definition of "Investment Base" is amended
and restated to read as follows:
"'Investment Base' means, for any
date of determination, the amount equal to
the Outstanding Balance of Receivables that
are Eligible Receivables minus the Reserves
with respect thereto plus, for purposes of
determining "Funding Base" under the
Collateral Agent Agreement, at any time
after the Facility Termination Date, so long
as the Insurance Policy has not been
terminated, the aggregate amount that would
be available for drawing under the Insurance
Policy if such date were the "Draw Date"
thereunder, in each case as disclosed in the
most recently submitted Investment Base
Certificate or as otherwise determined by
the Purchaser, the Operating Agent or the
Collateral Agent based on Seller Collateral
information available to any of them,
including any information obtained from any
audit or from any other reports with respect
to the Seller Collateral, which
determination shall be final, binding and
conclusive on all parties to the Purchase
Agreement (absent manifest error)."
(g) The definition of "Maximum Purchase Limit" is
hereby amended by replacing the amount "$300,000,000" with the amount
"$500,000,000."
(h) The definition of "Purchase Discount Rate" in
Annex X is hereby amended by deleting the existing text and replacing
in lieu thereof the following:
"Purchase Discount Rate"
means a rate, on any date of determination,
equal to 100% minus the greater of (a)(i)
the sum of the Loss Reserve Ratio and the
Dilution Reserve Ratio minus (ii) 20%, or
(b) 15%.
(i) The definition of "Purchaser Secured Parties" is
hereby amended by adding "the Insurer" as a party named therein.
(j) The definition of "Receivable" is hereby amended
by inserting the following at the end of clause (b) thereof:
",provided that Returned Goods (as defined
in the Intercreditor Agreement) shall cease
to constitute a "Receivable" to the extent
the Receivables Interest (as defined in the
Intercreditor Agreement) therein ceases to
exist as provided in Section 2.1 of the
Intercreditor Agreement"
(k) The definition of "Related Documents" is hereby
amended by adding "the Insurance Agreement" and the "Intercreditor
Agreement" as documents named therein.
(l) The following definitions are hereby added:
(i) "'Dilution Reserve' means, on
any date of determination, an amount
calculated in accordance with the following
formula:
The lesser of (a) 5% of Investment Base and
(b) Investment Base x [(GDR x
2.00) + .05 - (1.00 - MPR)]
where:
GDR = Gross Dilution Ratio as of such date
of determination
MPR = The Purchase Discount Rate
(expressed as a decimal) as of such
date of determination.
(ii) "'Insurance Agreement' means
that certain Insurance Agreement among the
Insurer, the Purchaser, the Collateral Agent
and the Operating Agent, dated as of July
31, 1998."
(iii) "'Insurance Draws' means draws
made or to be made under the Insurance
Policy"
(iv) "'Insurer' means Ambac
Assurance Corporation, a New York stock
insurance company, and its permitted
successors and assigns."
(v) "'Insurance Policy' means Excess
of Loss Insurance Policy of the Insurer
designated as Policy No. AB0182BE naming GE
Capital, in its capacity as Collateral Agent
on behalf of the Purchaser, as the Insured
Party"
(vi) "Intercreditor Agreement" means
that certain Intercreditor Agreement, dated
as of June 30, 1998, among the Operating
Agent, the Collateral Agent, the Seller, the
Servicer, the Originator, the Purchaser and
the Inventory Lenders' Agent.
(vii) "Inventory Lenders' Agent"
means BankAmerica Business Credit, Inc., as
agent for the lenders named in the Inventory
Facility.
(viii) "Inventory Facility" means
the revolving loans evidenced by that
certain Loan and Security Agreement dated as
of June 30, 1998, among the Originator, the
Inventory Lenders' Agent and the lenders
named therein.
ARTICLE III
AMENDMENT NO. 3 TO TRANSFER AGREEMENT
Section 3.1 Amendment to Section 2.01(b). Section
2.01(b) is hereby amended by inserting the following in the first
sentence thereof after the word "thereafter":
"which is prior to receipt of an Enforcement
Action (as defined in the
Intercreditor Agreement) as provided in
Section 2.4(a) of the Intercreditor
Agreement"
Section 3.2. Amendment to Section 4.03(c).
Section 4.03(c) is hereby amended by
inserting the following at the beginning thereof:
"except as provided in Section 2.4(c) of the
Intercreditor Agreement"
Section 3.3 Amendment to Exhibit B. Exhibit B is
hereby amended by replacing existing Exhibit B with a new Exhibit B
attached hereto as Schedule 1.
ARTICLE IV
AMENDMENT NO. 3 TO PURCHASE AGREEMENT
Section 4.1 Amendment to Article II.
(a) Section 2.02(b) is hereby amended by deleting the
last sentence therein (which was added in Amendment No. 2 to the
Purchase Agreement) and substituting in lieu thereof the following:
"In the event that the Seller gives notice
that it intends to terminate the Maximum
Purchase Limit under this Section 2.02(b)
and such termination is to be effective on
or prior to December 31, 1999, a condition
precedent to such termination is the receipt
by the Purchaser of a prepayment fee in the
amount of $1,000,000."
(b) Section 2.10(a) is hereby amended by (i)
inserting the phrase ", the
Insurance Agreement" after the first reference to "this Agreement; and
(ii) deleting the phrase "the Seller's Share of"; and
(c) Section 2.10(b) is hereby amended by
(i)adding the phrase ", the Insurance
Agreement of" after the phrase "the Liquidity Loans" each time it
appears therein, (ii) deleting the phrase "the Seller's Share of" and
(iii) Section 2.10(c) is hereby amended by adding the phrase ", the
Insurance Agreement, the Insurance Policy" after the phrase "the
Liquidity Loans".
Section 4.2 Amendment to Section 4.01(u). Section
4.01(u) is hereby amended by inserting the following after the phrase
"Transfer Agreement":
"or, subject to the terms of the
Intercreditor Agreement, in favor of the
Inventory Lenders' Agent"
Section 4.3 Amendment to Article VI. (a)
Section 6.03(c)(iv) is hereby
amended by deleting the phrase "account of the Seller,"and substituting
in lieu thereof, "account of the Purchaser."
(b) Sections 6.05(b) and 6.05(c) are hereby deleted in
their entirety and replaced with the following:
"(b) transfer all amounts in the Deferred Purchase Price
Sub-Account, in the following priority:
(i) if an Event of Servicer
Termination has occurred and a Successor Servicer has
been appointed, to the Successor Servicer in an
amount equal to its accrued and unpaid Successor
Servicing Fees and Expenses;
(ii) to the Collateral Account for
the account of the Purchaser, in an amount equal to,
on any such Business Day on which Capital Investment
is being maintained through the issuance of
Commercial Paper (to the extent such Capital
Investment exceeds Transaction Liquidity Loans then
outstanding), accrued and unpaid CP Interest through
and including the date of maturity of the Commercial
Paper maintaining such Capital Investment;
(iii) to the Insurer, any unpaid
premiums then owing the Insurer under the Insurance
Agreement;
(iv) if Insurance Draws are then
outstanding, to the Insurer, an amount equal to
accrued and unpaid interest on the Insurance Draws to
the extent amounts on deposit in the Deferred
Purchase Price Sub-Account are allocated to this
subparagraph (iv) pursuant to the terms of the
Insurance Agreement;
(v) if there are Transaction
Liquidity Loans outstanding, to the Transaction
Liquidity Agent on behalf of the Transaction
Liquidity Providers, in an amount equal to accrued
and unpaid interest on the Transaction Liquidity
Loans;
(vi) to the Capital InvestmentSub-
Account:
(A) an amount equal to the
Dilution Funded Amount; and
(B) if there are
Transaction Liquidity Loans then
outstanding or Capital Investment exceeds the
Transaction Liquidity Loans then outstanding, all
amounts remaining in the Deferred Purchase Price
Sub-Account, if any;
(vii) to the Letter of Credit Agent,
if there are any outstanding LOC Draws in respect of
the Seller, in an amount equal to accrued and unpaid
interest on such outstanding LOC Draws;
(viii) to the Collateral Account, an
amount equal to (A) accrued and unpaid Daily Yield
minus (B) the sum of (1) amounts paid under Section
6.05(b)(ii), (2) amounts paid under Section
6.05(b)(iv), (3) amounts paid under 6.05(b)(v) and
(4) amounts paid under Section 6.05(b)(vii);
(ix) if an Event of Servicer
Termination has not occurred, to the Servicer in an
amount equal to its accrued and unpaid Servicing Fee;
(x) upon payment in full of all
amounts set forth in clauses (c)(i)-(c)(viii) below,
to an account previously designated by the Seller, in
partial payment of the Deferred Purchase Price, the
balance, if any; and
(c) transfer all amounts in the Capital
Investment Sub-Account, in the following priority:
(i) to the Collateral Account for
the account of the Purchaser, in an amount equal to,
(A) on any such Business
Day on which Capital Investment is being
maintained through the issuance of
Commercial Paper (to the extent such Capital
Investment exceeds Transaction Liquidity
Loans then outstanding), accrued and unpaid
CP Interest through and including such date,
to the extent not paid pursuant to Sections
6.05(b)(ii) and 6.05(b)(viii); and
(B) on any such Business
Day on which Capital Investment is being
maintained through the issuance of
Commercial Paper (to the extent such Capital
Investment exceeds Transaction Liquidity
Loans then outstanding), the principal of
all Capital Investment in excess of such
Transaction Liquidity Loans;
(ii) to the Insurer, to the extent
amounts on deposit in the Capital Investment
Sub-Account are allocated to this subparagraph
(c)(ii) pursuant to the terms of the Insurance
Agreement, unpaid premiums of the Insurer under the
Insurance Agreement to the extent not paid under
Section 6.05(b)(iii);
(iii) if Insurance Draws are then
outstanding, to the Insurer, to the extent amounts on
deposit in the Capital Investment Sub-Account are
allocated to this subparagraph (c)(iii) pursuant to
the terms of the Insurance Agreement, an amount equal
to:
(A) accrued and unpaid
interest on the Insurance Draws to the
extent not paid under Section 6.05(b)(iv);
and
(B) the outstanding amount
of Insurance Draws; and
(C) any other amounts owing
to the Insurer pursuant the
Insurance Policy or the Insurance
Agreement, including, without
limitation, any fees and expenses of
the Insurer other than Additional
Amounts and Indemnified Amounts;
(iv) if there are Transaction
Liquidity Loans outstanding, to the Transaction
Liquidity Agent on behalf of the Transaction
Liquidity Providers, in an amount equal to:
(A) accrued and unpaid
interest on the Transaction Liquidity Loans
to the extent not paid pursuant to Section
6.05(b)(v);
(B) the principal of
outstanding Transaction Liquidity Loans; and
(C) any other amounts
(other than Additional Amounts and
Indemnified Amounts), including any fees,
owing to the Transaction Liquidity Agent or
Transaction Liquidity Providers in
connection with the Transaction Liquidity
Loans to the extent not paid pursuant to
Section 6.05(b)(v);
(v) to the Collateral Account for
the account of the Purchaser, in an amount equal to:
(A) all Additional Amounts
incurred and payable to any Affected Party; and
(B) all Indemnified Amounts
incurred and payable to any Indemnified
Party;
(vi) to the Letter of Credit Agent,
if there are any outstanding LOC Draws in respect of
the Seller, in an amount equal to:
(A) accrued and unpaid
interest on such outstanding LOC Draws to
the extent not paid pursuant to Section
6.05(b)(vii);
(B) the principal of such
outstanding LOC Draws; and
(C) any other amounts,
including fees, owing to the Letter of
Credit Agent in connection with such
outstanding LOC Draws; and
(vii) to the Collateral Account, an
amount equal to (A) accrued and unpaid Daily Yield
minus (B) the aggregate amounts paid pursuant to
Sections 6.05(b)(ii), 6.05(b)(iv), 6.05(b)(v),
6.05(b)(vii), 6.05(b)(viii), 6.05(c)(i)(A),
6.05(c)(iii)(A), 6.05(c)(iv)(A) and 6.05(c)(vi)(A).
(viii) if an Event of Servicer
Termination has not occurred, to the Servicer in an
amount equal to its accrued and unpaid Servicing Fee;
and
(ix) upon payment in full of all
amounts set forth in clauses (c)(i)-(c)(viii) above,
to an account previously designated by the Seller,
the balance, if any."
Section 4.4 Amendment to Article IX.
(a) Section 9.01(b) of the Purchase Agreement is
hereby amended by replacing "$1,000,000" with "$500,000" in clause (ii)
thereof and adding at the end thereof the following:
"or (iii) a default, or an event that with
the passage of time or the giving of notice
or both would result in an event of default,
has occurred and been continuing for a
period of more than 30 days in respect of
any Debt of the Originator or the Seller,
having a principal amount of $500,000 or
more and incurred on and after the date
hereof (including, without limitation, Debt
incurred to refinance Debt that is in
existence as of the date hereof and the
Inventory Facility).
(b) Section 9.01(v) is hereby amended and restated to
read as follows:
"or (v) a breach of the covenants contained
in Exhibit J has occurred."
(c) Section 9.01(w) is hereby amended and restated to
read as follows:
"(w) unless the Purchaser, the Operating
Agent and each Rating Agency otherwise
consent, (i) Insurance Policy shall for any
reason cease to be in full force and effect
other than as a result of any action or
inaction by the Purchaser or the Operating
Agent (including, without limitation,
termination pursuant to Section 7.7 of the
Insurance Agreement), (ii) the Insurer shall
deny all or any material portion of its
liability under the Insurance Policy, or
(iii) the Insurer shall cease to have a
long-term debt rating of AA or better from
S&P, and, in each case, the Operating Agent
shall not have received a replacement
Insurance Policy within 90 days on
substantially the same terms and issued by
an insurance company or other financial
institution with a long-term debt rating of
AA or better from S&P and/or Aa2 or better
from ▇▇▇▇▇'▇ and otherwise reasonably
acceptable to the Operating Agent (provided
no Termination Event shall be deemed to
exist under this clause (w) unless the
Operating Agent has utilized reasonable best
efforts to obtain such a replacement policy
within such 90 day period);
Section 4.5 Amendment to Section 14.03(a). Section
14.03(a) is hereby amended by adding ", the Insurer" after the phrase
"the Operating Agent" each time such phrase appears therein.
Section 4.6 Amendment to Schedule 1. Schedule 1 is
hereby deleted and replaced with the following:
Schedule 1
CONCENTRATION LIMITS
I. Obligor Long-Term Concentration Limit
Debt Rating(1)(2) Percentage
AA/Aa2 or higher 15%
A/A3 8%
Less than A/A3 or not rated 4%
II. Obligor
Micro Warehouse, Inc. 5%
Office Depot, Inc. 6%(3)
Dell Computer Corporation 6%(4)
Section 4.7 Amendment to Exhibit H. Exhibit H of
----------------------
the Purchase Agreement is hereby amended by:
---------------------------
(1) An Obligor may have a deemed rating equivalent to the debt rating
of its parent corporation (provided that the parent is liable for the
debts of the Obligor) or an unconditional third party insurer or
guarantor under an insurance contract or a guarantee acceptable to the
Operating Agreement and the Collateral Agreement.
(2) Does not include Obligors listed below.
(3) Provided that the senior unsecured debt of such company is rated
Baa or better my ▇▇▇▇▇'▇ and BBB by S&P.
(4) Provided that the senior unsecured debt of such company is rated
Baa1 by ▇▇▇▇▇'▇ and BBB by S&P.
(a) by adding the phrase "minus Capital Expenditures"
after the term "EBITDA" in the definition of "Fixed Charge Coverage
Ratio."
(b) deleting the chart as it appears in such Exhibit
and substituting in lieu thereof the following chart:
FINANCIAL COVENANTS
All covenants (i) shall be calculated on the basis of
the financial ratios and net worth percentages for the most recent four
consecutive fiscal quarters just completed, ending in each case with
one of the quarters specified in the tables below, and (ii) shall be
calculated on a quarterly basis. For the Fixed Charge Coverage Ratio
covenants and Interest Coverage Ratio covenants, with respect to any
period of four fiscal quarters that ends before the Fourth Quarter of
1998 are to be calculated on a pro-forma basis including without
limitation with respect to interest expense, principal payments and
Restructuring Costs, as if (a) the indebtedness that was refinanced or
retired in connection with the issuance of the Stonington Convertible
Note had been refinanced or retired by the Stonington Convertible Note
as of the last day preceding the four fiscal quarters in respect of
which such covenants are to be calculated and (b) the Stonington
Convertible Note was converted into common stock of the Parent as of
the last day preceding the four fiscal quarters in respect of which
such covenants are to be calculated; provided that the pro-forma
adjustments referred to in the foregoing clause (iii) shall be
reasonably satisfactory to the Operating Agent as evidenced by the
written approval of the Operating Agent; provided, further, that if the
adjustments are not reasonably satisfactory to the Operating Agent, the
parties to the Purchase Agreement shall negotiate in good faith to
resolve any differences. For purposes of determining the covenants set
forth in this Exhibit H, Funded Debt shall include any notes, bonds,
certificates or other interests issued in a securitization of assets of
the Originator or any of its Subsidiaries and principal payments on
Funded Debt shall include any payments in respect of principal of such
securities and Cash Interest Expense shall include any payments or
distributions in respect of interest on such securities.
Covenant Level
I. Parent Fixed Charge Coverage Ratio (minimum)
Fourth Quarter of 1997 1.00 to 1.00
First Quarter of 1998 1.00 to 1.00
Second Quarter of 1998 1.00 to 1.00
Third Quarter of 1998 0.85 to 1.00
Fourth Quarter of 1998 0.70 to 1.00
First Quarter of 1999 0.60 to 1.00
Second Quarter of 1999 0.60 to 1.00
Third Quarter of 1999 0.70 to 1.00
Fourth Quarter of 1999 0.90 to 1.00
First Quarter of 2000 1.0 to 1.0
Second Quarter of 2000 1.0 to 1.0
Third Quarter of 2000
and thereafter 1.1 to 1.0
Interest Coverage Ratio (minimum)
Fourth Quarter of 1997 1.10 to 1.00
First Quarter of 1998 1.10 to 1.00
Second Quarter of 1998 1.15 to 1.00
Third Quarter of 1998 1.25 to 1.00
Fourth Quarter of 1998
and each quarter thereafter 1.40 to 1.00
II. Seller Net Worth Percentage (minimum) 15%
III. Parent Tangible Net Worth (minimum) $105,000,000
(commencing
1/3/1998)
plus the
greater of
85% of Net
Income and
zero
[END OF CHART]
Section 4.8 Amendment to Section 12.01(a). Section
12.01(a) is hereby amended by adding ",the Insurer" after the phrase
"any Transaction Liquidity Lender" the first time such phrase appears.
(b) The definition of "Fixed Charges" is
hereby amended and restated to read:
"'Fixed Charges' means, with respect to any
Person for any period, the sum of
the following amounts payable during
such period by such Person and its
consolidated subsidiaries: (i) Cash
Interest Expense in respect of
Funded Debt, (ii) regularly
scheduled principal payments on
Funded Debt, and (iii) cash taxes."
(c) The definition of "Tangible Net Worth"
is hereby amended and restated to
read:
"'Tangible Net Worth' means, with respect to
any Person and its consolidated
subsidiaries, assets minus liabilities."
Section 4.9 Addition of Exhibit J. A new
Exhibit J is added to read as follows:
Exhibit J
(i) As of the last day of any fiscal month, the Net Dilution
Ratio shall not exceed 8%, (ii) the Default Ratio shall not exceed
3.5% and (iii) as of the last day of any fiscal month neither the
Receivable Collection Turnover Ratio nor the Gross Dilution Ratio
shall exceed the levels set forth below for the corresponding range
of Sales Ratios:
Receivable
Collection Gross
Sales Ratio Turnover Dilution Ratio
----------- ---------- --------------
25% or less 44 days 12.0%
25.1% to 30% 45 days 12.5%
30.1% to 35% 46 days 13.0%
35.1% to 40% 47 days 13.5%
40.1% to 45% 48 days 14.0%
45.1% to 50% 49 days 14.5%
Greater than 50% 50 days 15.0%
"Sales Ratio" shall be the ratio (expressed as a percentage)
of (x) sales of merchandise in respect of (a) the "Merisel Open
Computing Alliance" plus (b) total retail sales, divided by (y) total
sales of merchandise.
[END OF EXHIBIT J]
ARTICLE V
AMENDMENT NO. 2 TO RFC SUPPLEMENT.
Section 5.1 Amendment to the RFC Supplement.
-------------------------------
The RFC Supplement is hereby amended by (a) deleting "$300,000,000" as
the Maximum Purchase Limit and substituting in lieu thereof
"$500,000,000"; and
(b) amending and restating the LOC Draw Percentage to read as
follows:
"25%; provided, that, for purposes of
computing Aggregate LOC Draw
Availability in Section 6.07(ii) of
the Collateral Agent Agreement, if
25% results in LOC Draw Availability
in respect of Merisel Capital
Funding Inc. being less than
$80,000,000, the LOC Draw Percentage
shall be increased to a percentage
necessary to produce Aggregate LOC
Draw Availability in respect of
draws relating to Merisel Capital
Funding, Inc. of $80,000,000."
ARTICLE VI
AMENDMENT NO. 1 TO LIQUIDITY AGREEMENT.
Section 6.1 Amendment to Amount of
Liquidity Commitment. The definition of "Liquidity Commitment is
hereby amended by replacing the amount "$309,000,000" with the
amount "$515,000,000." The amount of $309,000,000 wherever it
appears in the Liquidity Agreement is hereby amended to $515,000,000.
Section 6.2 Conditions to Increase in
Liquidity Commitment (a) Commencing on [the date hereof], GE Capital
will hold 100% of the Liquidity Commitment. In connection with
the increased Liquidity Commitment as set forth in Section 5.1 herein
above, GE Capital hereby waives the requirement set forth in Section
5.04(a) that Redwood deliver a "Letter re Increase in Liquidity
Commitment." The undersigned "Authorized Officer" (as defined in the
Liquidity Agreement) of Redwood hereby certifies pursuant to
Section 5.04(d) of the Liquidity Agreement that all conditions
specified in Section 5.04 of the Liquidity Agreement relating to the
increase in Liquidity Commitment have been satisfied. The foregoing
certification is hereby deemed to be the "Company Certificate"
required by Section 5.04(d) of the Liquidity Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions Precedent.
The effectiveness of these Amendments is subject to the conditions
precedent that the Collateral Agent, the Operating Agent, the
Liquidity Agent, the LOC Agent and the Purchaser shall have received
each of the following, in form and substance satisfactory to each
such party:
(a) All consents required under the
Reimbursement Agreement and Liquidity Loan Agreement and confirmation
from each Rating Agency that the Rating Agency Condition has been
satisfied.
(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 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 each Person's officers executing these Amendments, 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 is true and correct in
all material respects as of the date hereof.
(d) The opinion of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,in form and substance reasonably satisfactory to the
Purchaser, the LOC Agent, the Liquidity Agent, 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 (A) the Amendments in
respect of the Purchase Agreement and Transfer Agreement and (B) the
Intercreditor Agreement, (iii) the due authorization, execution and
delivery of (A) the Amendments in respect of the Purchase Agreement
and the Transfer Agreement and (B) the Intercreditor Agreement by the
Seller and Servicer (or Originator, as the case may be), (iv) the
enforceability of the Amendments and the Intercreditor Agreement
against the Seller and Servicer (or Originator, as the case may be),
(v) that the execution and delivery of the Amendments in respect
of the Purchase Agreement and the Transfer Agreement and (B) the
Intercreditor 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, and (vi) that the Amendments provided for herein
do not adversely affect the validity or perfection of the security
interest of the Seller or the Purchaser in the Collateral.
(e) An Officer's Certificates in form and
substance satisfactory to the Operating Agent to the effect that
all of representations and Warranties in the Transfer Agreement
and Purchase Agreement are true and correct in all material respects
as of the date hereof.
(f) Execution and delivery by the Insurer,
the Collateral Agent and the Operating Agent of the Insurance
Agreement.
(g) Delivery by Insurer to the LOC Provider
of its Insurance Policy.
(h) Such other approvals, opinions or
documents as the Collateral Agent, the Liquidity Agent, the LOC Agent,
the Operating Agent or the Insurer may reasonably request.
(i) Execution and delivery of the
Intercreditor Agreement by each of the parties thereto.
ARTICLE VIII
SELLER'S AND SERVICER'S REPRESENTATIONS
AND WARRANTIES
SECTION 8.1 Seller's and Servicer's
Representations and Warranties. Each of the Seller and the Servicer
represents and warrants that:
(a) these Amendments have been duly
authorized, executed and delivered pursuant to its corporation power;
(b) these Amendments constitute its legal,
valid and binding obligation; and
(c) after giving effect to the amendments
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 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 Purchase Agreement,
Annex X, the Reimbursement Agreement, the Liquidity Agreement and the
RFC Supplement to "this Agreement" and in each of the other documents
to be executed in connection therewith to the "Purchase Agreement,"
"Annex X," the "Reimbursement Agreement," the "Liquidity
Agreement," and the "RFC Supplement," as the case may be, shall
mean such respective 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, Liquidity Agent, the LOC Agent, the Operating Agent or
the Collateral Agent to enter into any future amendment (whether
similar or dissimilar).
SECTION 9.2 Waiver by the Seller; Consent
to Inventory Facility and Intercreditor Agreement. (a) 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
LOC Provider, the LOC Agent, 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.
(b) Each of the Servicer, the Seller, the
Purchaser, the Operating Agent and the Collateral Agent consents
to the execution, delivery and performance of the Inventory
Facility (as in effect as of the date of execution and delivery
thereof) and the Intercreditor Agreement (as amended) each in
accordance with the terms thereof.
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. The amendments
to Annex X, the Transfer Agreement and the Purchase Agreement shall
be governed by, and construed in accordance with, California law.
The amendments to the Liquidity Agreement and the RFC Supplement
shall be governed by, and construed in accordance with New York 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 Securitization Agreements shall be amended by these
Amendments, effective as of the date hereof.
* * *
IN WITNESS WHEREOF, the Seller, the
Servicer, the Originator, 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
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:___________________________
Title: Treasurer
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
MERISEL AMERICAS, INC.,
as Originator and Servicer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:___________________________
Title: Executive Vice President
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION,
as Operating Agent and Collateral Agent
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:___________________________
Title: Duly authorized signatory
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION,
as LOC Agent, Liquidity Agent and LOC
Provider
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
By:__________________________
Title:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
REDWOOD RECEIVABLES CORPORATION,
as Purchaser
/s/ H. ▇▇▇▇▇▇ ▇▇▇▇▇
By:___________________________
Title: Assistant Secretary
Name: H. ▇▇▇▇▇▇ ▇▇▇▇▇