SECOND AMENDMENT TO THE ARROW ELECTRONICS, INC. AMENDED AND RESTATED THREE YEAR CREDIT AGREEMENT
SECOND AMENDMENT TO THE ARROW ELECTRONICS, INC.
AMENDED AND RESTATED THREE YEAR CREDIT AGREEMENT
SECOND AMENDMENT, dated as of February 19, 2002 (the "Amendment")
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to the Amended and Restated Three Year Credit Agreement, dated as of
February 22, 2001 (as may be amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among ARROW ELECTRONICS, INC.,
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a New York corporation (the "Company"), the Subsidiary Borrowers (as defined
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therein), the several banks and other financial institutions from time to
time parties thereto (the "Banks"), BANK OF AMERICA, N.A., as Syndication
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Agent (the "Syndication Agent"), FLEET NATIONAL BANK, as Documentation
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Agent (the "Documentation Agent"), and JPMORGAN CHASE BANK, as Administrative
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Agent (the "Administrative Agent").
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W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company, the Subsidiary Borrowers, the Banks, the
Syndication Agent, the Documentation Agent and the Administrative Agent are
parties to the Credit Agreement; and
WHEREAS, the Company and each of the Subsidiary Borrowers have
requested that the Banks consent to the amendments contained herein in the
manner hereinafter provided, and the Banks are willing to do so;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms
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defined in the Credit Agreement shall have such meanings when used herein.
2. Amendments to Subsection 1.1. Subsection 1.1 of the Credit
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Agreement is hereby amended as follows:
(a) by inserting, after the word "Affiliates," in clause (d)
of the definition of "Adjusted Consolidated EBITDA" in such subsection,
the following:
"plus (e) to the extent deducted from earnings in determining Consolidated
Net Income for such period, non-cash charges due to impairments recorded in
such period in accordance with the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 142,"
(b) by deleting the period at the end of the definition of
"Applicable Margin" in such subsection and substituting, in lieu thereof,
the following:
"; and provided, further, that the Applicable Margin as determined pursuant
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to the foregoing shall be increased by 25 basis points for the period from
and including January 1, 2002 until and including the first fiscal quarter
end on which the ratio of Consolidated Total Debt as at such quarter end
to Adjusted Consolidated EBITDA for the period of four consecutive
quarters ending on such date is less than or equal to 4.0 to 1.0."
(c) be deleting the period at the end of the definition of
"Consolidated Net Worth" in such subsection and substituting, in lieu
thereof, the following:
", adjusted to exclude non-cash charges due to impairments recorded in
accordance with the Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 142."
(d) by deleting the table in the definition of "Facility Fee Rate"
in such subsection in its entirety and substituting, in lieu thereof, the
following table:
Rating
(S&P/▇▇▇▇▇'▇) (Facility Fee Rate (in basis points)
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Greater than or equal 13.50
to A-/A3
Greater than or equal 15.00
to BBB+/Baa1
Greater than or equal 17.50
to BBB/Baa2
Greater than or equal 20.00
to BBB-/Baa3
Less than 27.50
BBB-/Baa3
2. Amendment to Subsection 9.2. Subsection 9.2(a) of the Credit
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Agreement is hereby amended by deleting the parenthetical clause contained
therein and substituting in lieu thereof the following:
"(other than, in respect of any Extension of Credit made after the
Closing Date the proceeds of which are to be applied by the Company to
repay maturing commercial paper (as specified in the applicable Notice of
Borrowing), subsection 8.2)"
3. Amendment to Subsection 10.9. Subsection 10.9 of the Credit
----------------------------
Agreement is hereby amended by deleting such subsection in its entirety
and substituting, in lieu thereof, the following:
"10.9 Additional Subsidiary Guarantees. In the event that any
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Domestic Subsidiary which is not a Guarantor shall own any assets or
generate any revenues (excluding any Domestic Subsidiary the sole
activities of which consist of entering into one or more Permitted
Receivables Securitizations), take all actions necessary to cause such
Domestic Subsidiary to execute and deliver a Subsidiary Guarantee, within
30 days of the occurrence of such event."
4. Amendment to Subsection 11.1(a). Subsection 11.1(a) of the Credit
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Agreement is hereby amended by deleting such subsection in its entirety and
substituting, in lieu thereof, the following:
"(a) Maintenance of Indebtedness. Permit Consolidated Total Debt at
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any time to exceed (a) from the Closing Date through September 30, 2001, an
amount equal to 70.0% of Consolidated Total Capitalization, (b) from
October 1, 2001 through December 31, 2001, an amount equal to 67.5% of
Consolidated Total Capitalization, (c) from January 1, 2002 through March
31, 2002, an amount equal to 62.5% of Consolidated Total Capitalization,
(d) from April 1, 2002 through March 31, 2003, an amount equal to 60.0% of
Consolidated Total Capitalization, and (e) thereafter, an amount equal to
57.5% of Consolidated Total Capitalization; provided that the percentages
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set forth in the foregoing clauses (c) through (e) shall be increased by
2.5% if, and only for so long as, the ratio of Consolidated Total Debt as
at the most recent fiscal quarter end to Adjusted Consolidated EBITDA for
the period of four consecutive quarters ending on such date is less than or
equal to 4.0 to 1.0."
5. Amendment to Subsection 11.1(b). Subsection 11.1(b) of the Credit
--------------------------------
Agreement is hereby amended by deleting such subsection in its entirety and
substituting, in lieu thereof, the following:
"(b) Maintenance of Net Worth. Permit Consolidated Net Worth at any
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time to be less than an amount equal to the sum of 85.0% of Consolidated
Net Worth as of December 31, 2001 plus 50% of cumulative Consolidated Net
Income for the fiscal quarter commencing January 1, 2002 and for each
fiscal quarter thereafter (without subtraction for any fiscal quarter
during which Consolidated Net Income is a negative number) plus 50% of the
cash proceeds of any Capital Stock issued by any Loan Party commencing
January 1, 2002 (net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith)."
6. Amendment to Subsection 11.1(c). Subsection 11.1(c) of the Credit
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Agreement is hereby amended by deleting such subsection in its entirety and
substituting, in lieu thereof, the following:
"(c) Interest Coverage. Permit the ratio of Adjusted Consolidated
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EBITDA to Consolidated Cash Interest Expense for any period of four
consecutive fiscal quarters of the Company ending (a) on or prior to
September 30, 2001, to be less than 3.0 to 1.0, (b) after September 30,
2001 and on or prior to December 31, 2001, to be less than 2.15 to 1.0,
(c) after December 31, 2001 and on or prior to June 30, 2002, to be less
than 1.75 to 1.0, (d) after June 30, 2002 and on or prior to September 30,
2002, to be less than 2.0 to 1.0, (e) after September 30, 2002 and on or
prior to December 31, 2002, to be less than 2.1 to 1.0, (f) after December
31, 2002 and on or prior to March 31, 2003, to be less than 2.25 to 1.0,
and (g) after March 31, 2003, to be less than 3.0 to 1.0."
7. Amendment to Subsection 11.3. Subsection 11. 3 of the Credit
----------------------------
Agreement is hereby amended by deleting the amount "$75,000,000" where it
appears in clause (i) thereof and substituting in lieu thereof the amount
"$50,000,000".
8. Amendments to Subsection 11. Section 11 of the Credit
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Agreement is hereby amended by adding thereto the following Subsection
11.5:
"11.5 Limitation on Payments. For the period from and including
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January 1, 2002 until and including the first fiscal quarter end on which
the ratio of Consolidated Total Debt as at such quarter end to Adjusted
Consolidated EBITDA for the period of four consecutive quarters ending on
such date is less than or equal to 4.0 to 1.0, the Company shall not, and
shall not permit any of its Subsidiaries to, make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any
Capital Stock of any Loan Party, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of any Loan Party
(collectively, "Restricted Payments"), except that (x) any Subsidiary or
any Loan Party may make Restricted Payments to any other Loan Party and (y)
any Loan Party may make Restricted Payments consisting solely of Capital
Stock of any Loan Party."
9. Conditions to Effectiveness. This Amendment shall become
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effective on the date on which the Administrative Agent shall have received
(a) an executed counterpart of this Amendment signed by the Company, each
Subsidiary Borrower and the Required Banks and consented to by the
Subsidiary Guarantors, (b) an executed Subsidiary Guarantee from each
Domestic Subsidiary of the Company that is not already a Guarantor which
would be required as of the date hereof by Subsection 10.9 of the Credit
Agreement, as amended hereby, to execute and deliver a Subsidiary Guarantee
and (c) an amendment fee, for the account of the Banks that have delivered
an executed counterpart to the Administrative Agent no later than 12:00 noon,
New York City time, on February 19, 2002, in an amount equal to 0.15% of the
aggregate amount of the Commitments of such Banks.
10. Representations and Warranties. Each of the Company and each
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Subsidiary Borrower (in so far as the representations and warranties by
such Subsidiary Borrower relate to it) hereby confirms that all of the
representations and warranties made by the Loan Parties contained in the
Credit Documents after giving effect to the Amendments herein are true and
correct in all material respects on and as of the date hereof (other than
representations as are made as of a specific date) after giving effect to
this Amendment (it being understood that the occurrence of a material
reduction in revenue and/or earnings during the 2001 calendar year shall
not constitute a breach of the representation and warranty contained in
subsection 8.2 of the Credit Agreement for purposes of this Section 10).
11. No Default. The Company hereby confirms that no Default or
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Event of Default shall have occurred and be continuing on the date hereof
or after giving effect to this Amendment.
12. Counterparts. This Amendment may be executed by one or more
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of the parties hereof on any number of separate counterparts and all such
counterparts shall be deemed to be one and the same instrument.
13. Payment Of Expenses. The Company agrees to pay or reimburse
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the Administrative Agent for all of its reasonable out-of-pocket costs
and expenses incurred in connection with this Amendment, any other documents
prepared in connection herewith and the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent.
14. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
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AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK.
IN WITNESS WHEREOF, the undersigned have caused this Amendment
to be duly executed and delivered by their respective duly authorized officer
as of the day and year first above written.
ARROW ELECTRONICS, INC.
By:
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Name
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Title:
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GATES/ARROW DISTRIBUTING, INC.
By:
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Name
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Title:
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MID RANGE OPEN COMPUTING ALLIANCE,
INC.
By:
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Name
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Title:
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ARROW DENMARK A/S
By:
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Name
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Title:
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ARROW FINLAND OY
By:
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Name
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Title:
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ARROW COMPONENTS SWEDEN AB
By:
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Name
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Title:
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ARROW EUROPE GMBH
By:
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Name
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Title:
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▇▇▇▇▇▇▇ ELECTRONIC GMBH
By:
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Name
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Title:
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ARROW ELECTRONICS (UK) LTD.
By:
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Name
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Title:
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ARROW NORWAY A/S
By:
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Name
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Title:
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ARROW ELECTRONIQUE S.A.
By:
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Name
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Title:
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ARROW COMPUTER PRODUCTS SNC
By:
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Name
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Title:
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ARROW NORDIC COMPONENTS AB
By:
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Name
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Title:
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MICROTRONICA UK
By:
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Name
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Title:
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MICROTRONICA OY
By:
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Name
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Title:
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MICROTRONICA SWEDEN AB
By:
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Name
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Title:
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MICROTRONICA NORWAY AS
By:
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Name
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Title:
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MICROTRONICA DENMARK AS
By:
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Name
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Title:
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TEKELEC EUROPE S.A.
By:
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Name
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Title:
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B.V. ARROW ELECTRONICS DLC
By:
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Name
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Title:
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ARROW/TEXNY (H.K.) LIMITED
By:
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Name
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Title:
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ARROW ASIA PAC LTD.
By:
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Name
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Title:
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JPMORGAN CHASE BANK, as
Administrative Agent and as a Bank
By:
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Name
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Title:
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BANK OF AMERICA, N.A., as Syndication
Agent and as a Bank
By:
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Name
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Title:
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FLEET NATIONAL BANK, as
Documentation Agent and as a Bank
By:
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Name
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Title:
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THE BANK OF NOVA SCOTIA, as a Bank
By:
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Name
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Title:
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BNP PARIBAS, as a Bank
By:
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Name
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Title:
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By:
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Name
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Title:
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DEN DANSKE BANK AKTIESELSKAB, as a
Bank
By:
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Name
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Title:
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By:
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Name
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Title:
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HSBC BANK USA, as a Bank
By:
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Name
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Title:
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BANCA COMMERCIALE ITALIANA, NEW
YORK BRANCH, as a Bank
By:
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Name
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Title:
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By:
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Name
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Title:
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BANCA POPOLARE DI MILANO, NEW YORK
BRANCH, as a Bank
By:
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Name
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Title:
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By:
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Name
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Title:
----------------------:
THE BANK OF NEW YORK, as a Bank
By:
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Name
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Title:
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BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, as a Bank
By:
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Name
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Title:
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BAYERISCHE LANDESBANK
GIROZENTRALE, CAYMAN ISLANDS
BRANCH, as a Bank
By:
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Name
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Title:
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By:
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Name
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Title:
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CREDIT INDUSTRIEL ET COMMERCIAL,
as a Bank
By:
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Name
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Title:
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By:
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Name
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Title:
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CREDIT SUISSE FIRST BOSTON, as a Bank
By:
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Name
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Title:
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By:
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Name
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Title:
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SUNTRUST BANK, as a Bank
By:
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Name
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Title:
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DEUTSCHE BANK AG, as a Bank
By:
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Name
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Title:
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By:
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Name
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Title:
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FIRST UNION NATIONAL BANK, as a Bank
By:
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Name
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Title:
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BANCA NAZIONALE DEL LAVORO S.P.A.,
NEW YORK BRANCH, as a Bank
By:
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Name
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Title:
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By:
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Name
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Title:
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THE FUJI BANK, LIMITED, as a Bank
By:
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Name
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Title:
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THE DAI-ICHI KANGYO BANK, LTD., as a
Bank
By:
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Name
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Title:
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UNICREDITO ITALIANO, as a Bank
By:
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Name
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Title:
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STATE BANK OF INDIA, as a Bank
By:
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Name
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Title:
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By its signature each Guarantor hereby acknowledges and consents to the
foregoing amendment and confirms its Company Guarantee or Subsidiary Guarantee,
as the case may be.
ARROW ELECTRONICS, INC.
By:
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Name
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Title:
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GATES/ARROW DISTRIBUTING, INC.
By:
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Name
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Title:
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MID RANGE OPEN COMPUTING
ALLIANCE, INC.
By:
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Name
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Title:
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SUPPORT NET, INC.
By:
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Name
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Title:
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