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lgw40160.am2
05/26/94
Exhibit 4(c)
SECOND AMENDMENT AGREEMENT
Second Amendment Agreement (this "Amendment") made as of May 27, 1994,
by and among Pioneer-Standard Electronics, Inc. (Borrower), National City Bank,
Society National Bank (successor in interest to Ameritrust Company National
Association) and Star Bank, N.A. (together "banks") and National City Bank in
its capacity as agent of those three banks ("NCB-Agent") for the purposes of
the Credit Agreement referred to below and the related writings:
Whereas, the parties have entered into a Credit Agreement dated January 23,
1992, as amended by Amendment Agreement dated as of June 30, 1993 (as amended,
the "Credit Agreement") which sets forth the terms and conditions upon which
Borrower may obtain (a) loans "subject loans" on a revolving basis until the
"conversion date" (originally January 1, 1995 but now January 1, 1997), as that
term is defined in the Credit Agreement, and on an amortizing basis thereafter
and (b) "subject BAs"; AND each term defined in the Credit Agreement shall
have the same meaning in this Amendment as is ascribed thereto in the Credit
Agreement;
Whereas, the parties desire to amend certain provisions of the Credit Agreement
as provided below:
THEREFORE, in consideration of the premises above and the mutual promises below
and for other considerations, the parties agree as follows:
1. Subsection 2A.01 of the Credit Agreement is hereby amended in its entirety
to read as follows:
2A.01 AMOUNTS -- The aggregate amount of the subject
commitments shall be thirty-five million dollars ($35,000,000), but
that amount may be reduced from time to time pursuant to subsection
2A.03 or 2A.04 and the subject commitments may be terminated pursuant
to section 5B. The amount of each bank's subject commitment (subject
to such reduction or termination), and the proportion (expressed as a
percentage) that it bears to all of the subject commitments, is set
forth opposite the bank's name below, to-wit:
$17,500,000 50% National City Bank
10,500,000 30% Society National Bank
7,000,000 20% Star Bank, N.A.
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$35,000,000 100% Total
2. Borrower agrees to cause its subsidiary, Pioneer-Standard Canada Inc.,
to comply with all the provisions of sections 3A, 3B, 3C and 3D of the Credit
Agreement and agrees that all references to financial information in section 3A
shall be deemed to be references to financial information of Borrower and its
subsidiaries on a consolidating and consolidated basis; PROVIDED,
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that Pioneer-Standard Canada Inc. shall not be required to comply with the
provisions of subsection 3D.06 (captioned "DIVIDENDS").
3. Subsections 3B.01, 3B.02, 3B.03, 3B.04 and 3B.05 of the Credit Agreement
are hereby amended their entirety to read as follows:
3B.01 NET WORTH -- Borrower will not suffer or permit the sum of the
consolidated net worth of the companies at any time to be less than the
then required minimum amount. The required minimum amount shall be
eighty-nine million dollars ($89,000,000) EXCEPT that the required minimum
amount shall be permanently increased
(a) on June 30, 1994 and on each quarterly date thereafter by
an amount equal to the sum of fifty percent (50%) of the consolidated
net income of the companies, if any, for the quarter-annual period
then ending plus
(b) upon each issuance or other sale by Borrower of any of its
equity securities by an amount equal to the net proceeds (after costs
and expenses) thereof.
3B.02 LEVERAGE -- Borrower will not suffer or permit the total
liabilities of the companies at any time to exceed an amount equal to two
hundred twenty-five percent (225%) of the sum of the net worth of the
companies, all as determined on a consolidated basis.
3B.03 WORKING CAPITAL -- Borrower will not suffer or permit the
companies' aggregate working capital at any time to fall below sixty
million dollars ($60,000,000).
3B.04 CURRENT RATIO -- Borrower will not suffer or permit the current
assets of the companies at any time to fall below an amount equal to one
and seven-tenths (1.7) times the amount of their current liabilities, all
as determined on a consolidated basis.
3B.05 FIXED CHARGE COVERAGE -- Borrower will not suffer or permit the
aggregate of
(a) the aggregate net income of the companies (EXCEPT
Borrower's equity in any income or loss of PTGI) plus
(b) the aggregate interest expense of the companies plus
(c) the aggregate federal, state and local income taxes of the
companies plus
(d) the aggregate operating lease expense of the companies
for any four-quarter period to be less than an amount equal to one
hundred eighty percent (180%) of the sum of
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(a) the aggregate interest expense of the companies plus
(b) the aggregate operating lease expense of the companies
for that four-quarter period, all as determined on a consolidated
basis.
4. Subsection 3D.01 of the Credit Agreement is hereby amended by replacing
the period at the end thereof with the word "or" and by adding to the end
thereof the following new clause (iii):
(iii) Borrower's investment in Pioneer-Standard Canada Inc. (exclusive
of retained earnings of Pioneer-Standard Canada Inc.) so long as the
aggregate amount of such investments does not exceed ten million eight
hundred thousand dollars ($10,800,000).
5. Subsection 3D.02 of the Credit Agreement is hereby amended by replacing
the period at the end thereof with the word "or" and by adding to the end
thereof the following new clause (v):
(v) any advance or loan to, or guaranty of the obligations of,
Pioneer-Standard Canada Inc., so long as the aggregate amount of all such
advances, loans and guaranties does not exceed eighteen million five
hundred thousand dollars ($18,500,000) at any one time.
6. The following new definition is hereby added to section 9 ofthe Credit
Agreement:
COMPANY refers to Borrower or to a subsidiary of Borrower, as the case
may be;
7. It is a condition of this Amendment that prior to or at the execution of
this Amendment Borrower shall have delivered, or caused to be delivered, to
NCB-Agent the following:
(a) a promissory note in favor of each bank, in the form of Exhibit B
to this Amendment, it being agreed that from and after the date of this
Amendment the form of promissory note attached hereto as Exhibit B shall be
deemed to be Exhibit B to the Credit Agreement; and
(b) a guaranty of Borrower's obligations under the Credit Agreement, in
form and substance satisfactory to banks, executed by Pioneer-Standard
Canada Inc.
8. Borrower hereby represents and warrants to cach of the other parties to this
Amendment that
(1) none of the representations and warranties made in subsections
4B.01 through 4B.08 of the Credit Agreement has ceased to be true and
complete in any material respect; and
(2) no "default under this Agreement" has occurred that is continuing.
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9. In all other respects the Credit Agreement and each of the related writings
shall remain in full effect and be unaffected hereby. Each reference to the
Credit Agreement (whether made in the Credit Agreement or any related writings
or elsewhere) shall hereafter be deemed to be a reference to the Credit
Agreement as amended hereby. This Amendment may be executed in counterparts,
each counterpart to be executed by one or more or all of the parties but
collectively to constitute but one agreement.
National City Bank, Agent Pioneer-Standard Electronics, Inc.
By: /s/ Phillip Marshall By: /s/ John V. Goodger
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Title: Asst. Vice President Title: Vice President, Treasurer
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National City Bank Star Bank, N.A.
By: /s/ Phillip Marshall By: John D. Barett
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Title: Asst. Vice President Title: Vice President
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Society National Bank
By: /s/
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Title: Vice President
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NOTE
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$ _________________ Cleveland, Ohio ______________ , 1994
FOR VALUE RECEIVED, the undersigned, Pioneer-Standard Electronics, Inc.
(BORROWER), an Ohio corporation, promises to pay to the order of
_______________________ , at the main office of National City Bank (NCB),
Cleveland, Ohio, the principal sum of
____________________________________ DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time
shown on the reverse side), together with interest computed in the manner
provided in the Credit Agreement referred to below, which principal and
interest is payable in accordance with provisions in the Credit Agreement.
This note is issued pursuant to an Agreement dated January 23, 1992, as amended
from time to time (as amended, the "Credit Agreement") by and among Borrower,
three banks and NCB (as agent of the banks for the purposes of the Credit
Agreement) which establishes "subject commitments" (one by each bank)
aggregating thirty-five million dollars ($35,000,000) pursuant to which
Borrower may obtain subject loans from the banks upon certain terms and
conditions.
Reference is made to the Credit Agreement for the definitions of certain terms,
for provisions governing the making of subject loans, the acceleration of the
maturity thereof, rights of prepayment, and for other provisions to which this
note is subject. Any endorsement by the payee on the reverse side of this note
(or any allonge thereto) shall be presumptive evidence of the data so endorsed.
Address: Pioneer-Standard Electronics, Inc.
4800 East 131st Street
Cleveland, Ohio 44105 By: _______________________________
EXHIBIT B