1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED OCTOBER 3, 1998
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ___________
COMMISSION FILE NUMBER: 1-12203
INGRAM MICRO INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 62-1644402
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1600 E. ST. ANDREW PLACE, SANTA ANA, CALIFORNIA 92799-5125
(Address, including zip code, of principal executive offices)
(714) 566-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
The Registrant had 41,668,652 shares of Class A Common Stock, par value $.01 per
share, and 98,854,714 shares of Class B Common Stock, par value $.01 per share,
outstanding at October 3, 1998.
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INGRAM MICRO INC.
INDEX
Pages
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet at October 3, 1998 and January 3, 1998 3
Consolidated Statement of Income for the thirteen weeks and thirty-nine
weeks ended October 3, 1998 and September 27, 1997 4
Consolidated Statement of Cash Flows for the thirty-nine weeks ended
October 3, 1998 and September 27, 1997 5
Notes to Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9-17
Item 3. Quantitative and Qualitative Disclosures About Market Risk 17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 2. Changes in Securities and Use of Proceeds 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 18
Signatures 18
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INGRAM MICRO INC.
CONSOLIDATED BALANCE SHEET
(DOLLARS IN 000s, EXCEPT PER SHARE DATA)
OCTOBER 3, JANUARY 3,
1998 1998
----------- -----------
(UNAUDITED)
ASSETS
Current assets:
Cash ................................................ $ 94,476 $ 92,212
Trade accounts receivable (less allowances of $50,751
and $48,541 at October 3, 1998 and January 3, 1998,
respectively) ..................................... 2,223,463 1,635,728
Inventories ......................................... 2,258,959 2,492,646
Other current assets ................................ 231,098 225,408
----------- -----------
Total current assets .............................. 4,807,996 4,445,994
Property and equipment, net .......................... 304,259 215,148
Goodwill, net ........................................ 231,309 142,478
Other ................................................ 144,762 128,531
----------- -----------
Total assets ...................................... $ 5,488,326 $ 4,932,151
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .................................... $ 2,690,653 $ 2,415,001
Accrued expenses .................................... 284,180 292,515
Current maturities of long-term debt ................ 15,325 21,869
----------- -----------
Total current liabilities ......................... 2,990,158 2,729,385
Convertible debentures .............................. 468,393 --
Other long-term debt ................................ 700,426 1,119,262
Other ............................................... 32,816 23,843
----------- -----------
Total liabilities ................................. 4,191,793 3,872,490
Minority interest .................................... 4,946 4,862
Commitments and contingencies
Redeemable Class B Common Stock ...................... 8,024 16,593
Stockholders' equity:
Preferred Stock, $0.01 par value, 1,000,000 shares
authorized; no shares issued and outstanding ..... -- --
Class A Common Stock, $0.01 par value, 265,000,000
shares authorized; 41,668,652 and 37,366,389
shares issued and outstanding at October 3,
1998 and January 3, 1998, respectively ........... 417 374
Class B Common Stock, $0.01 par value, 135,000,000
shares authorized; 98,854,714 and 99,714,672
shares issued and outstanding (including
1,146,250 and 2,370,400 redeemable shares) at
October 3, 1998 and January 3, 1998,
respectively ..................................... 977 973
Additional paid in capital .......................... 555,069 484,912
Retained earnings ................................... 738,394 566,441
Cumulative translation adjustment ................... (11,163) (14,236)
Unearned compensation ............................... (131) (258)
----------- -----------
Total stockholders' equity ........................ 1,283,563 1,038,206
----------- -----------
Total liabilities and stockholders' equity ........ $ 5,488,326 $ 4,932,151
=========== ===========
See accompanying notes to these consolidated financial statements
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INGRAM MICRO INC.
CONSOLIDATED STATEMENT OF INCOME
(DOLLARS IN 000s, EXCEPT PER SHARE DATA)
(UNAUDITED)
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
-------------------------------- --------------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,
1998 1997 1998 1997
------------ ------------ ------------ ------------
Net sales .................... $ 5,707,974 $ 4,087,334 $ 15,814,183 $ 11,454,139
Cost of sales ................ 5,350,176 3,823,338 14,810,993 10,713,183
------------ ------------ ------------ ------------
Gross profit ................. 357,798 263,996 1,003,190 740,956
Expenses:
Selling, general and
administrative .......... 238,224 176,585 654,368 491,951
Noncash compensation charge 1,146 1,825 3,440 5,372
------------ ------------ ------------ ------------
239,370 178,410 657,808 497,323
------------ ------------ ------------ ------------
Income from operations ....... 118,428 85,586 345,382 243,633
Other (income) expense:
Interest income ........... (2,339) (658) (5,145) (2,710)
Interest expense .......... 16,532 6,944 51,700 23,348
Net foreign currency
exchange loss ........... 2,975 571 6,001 852
Other ..................... 1,938 3,060 6,877 9,474
------------ ------------ ------------ ------------
19,106 9,917 59,433 30,964
------------ ------------ ------------ ------------
Income before income taxes and
minority interest .......... 99,322 75,669 285,949 212,669
Provision for income taxes ... 39,530 31,073 113,996 87,101
------------ ------------ ------------ ------------
Income before minority
interest ................... 59,792 44,596 171,953 125,568
Minority interest ............ -- 304 -- 931
------------ ------------ ------------ ------------
Net income ................... $ 59,792 $ 44,292 $ 171,953 $ 124,637
============ ============ ============ ============
Basic earnings per share ..... $ 0.43 $ 0.32 $ 1.24 $ 0.92
============ ============ ============ ============
Diluted earnings per share ... $ 0.40 $ 0.30 $ 1.15 $ 0.85
============ ============ ============ ============
See accompanying notes to these consolidated financial statements.
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INGRAM MICRO INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN 000s)
(UNAUDITED)
THIRTY-NINE WEEKS ENDED
---------------------------
OCTOBER 4, SEPTEMBER 27,
1998 1997
--------- ---------
CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Net income .......................................... $ 171,953 $ 124,637
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization ..................... 47,920 34,159
Deferred income taxes ............................. (3,429) (1,774)
Minority interest ................................. -- 931
Noncash compensation charge ....................... 3,440 5,372
Changes in operating assets and liabilities
net of effects of acquisitions:
Trade accounts receivable ......................... (412,652) (168,966)
Inventories ....................................... 404,300 (323,122)
Other current assets .............................. 20,875 (24,827)
Accounts payable .................................. 56,556 180,914
Accrued expenses .................................. (24,807) 63,495
--------- ---------
Cash provided (used) by operating activities 264,156 (109,181)
CASH PROVIDED (USED) BY INVESTING ACTIVITIES:
Purchase of property & equipment .................... (105,038) (61,774)
Proceeds from sale of property & equipment .......... -- 10,334
Acquisitions, net of cash acquired .................. (85,802) 15,125
Other ............................................... (722) 681
--------- ---------
Cash (used) by investing activities ............. (191,562) (35,634)
CASH PROVIDED (USED) BY FINANCING ACTIVITIES:
Redemption of Redeemable Class B Stock .............. (440) (525)
Exercise of stock options including tax benefits .... 58,763 24,729
Proceeds from issuance of convertible debentures .... 449,604 --
Net (repayments) borrowings of other debt ........... (123,260) 101,238
Net (repayments) borrowings under revolving credit
facilities ......................................... (456,789) 33,883
--------- ---------
Cash provided (used) by financing activities .... (72,122) 159,325
Effect of exchange rate changes on cash .............. 1,792 (2,578)
--------- ---------
Increase in cash ..................................... 2,264 11,932
Cash, beginning of period ............................ 92,212 48,279
--------- ---------
Cash, end of period .................................. $ 94,476 $ 60,211
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments during the period:
Interest ............................................ $ 50,106 $ 22,789
Income taxes ........................................ 78,362 81,844
See accompanying notes to these consolidated financial statements.
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INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(DOLLARS IN 000S, EXCEPT PER SHARE DATA)
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Ingram Micro Inc. (the "Company" or "Ingram Micro") is primarily engaged in
wholesale distribution of computer-based technology products and services
worldwide. The Company conducts the majority of its operations in North America,
Europe, and Latin America. In November 1996, the Company's former parent, Ingram
Industries Inc. ("Ingram Industries"), consummated a split-off of the Company in
a tax-free reorganization (the "Split-Off"). In connection with the Split-Off,
certain stockholders of Ingram Industries exchanged all or some of their shares
of Ingram Industries Common Stock for 107,251,362 shares of Class B Common Stock
of the Company in specified ratios.
The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, the
accompanying unaudited consolidated financial statements contain all material
adjustments, consisting of only normal recurring adjustments, necessary to
present fairly the financial position of the Company and its wholly-owned and
majority-owned subsidiaries as of October 3, 1998, their results of operations
for the thirteen and thirty-nine weeks ended October 3, 1998 and September 27,
1997 and their cash flows for the thirty-nine weeks ended October 3, 1998 and
September 27, 1997. All significant intercompany accounts and transactions have
been eliminated in consolidation. The results of operations for the thirty-nine
week period ended October 3, 1998 may not be indicative of the results of
operations that can be expected for the full year.
NOTE 2 - EARNINGS PER SHARE
Effective in the fourth quarter of fiscal year 1997, the Company adopted
Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("FAS
128") and related interpretations. FAS 128 requires dual presentation of Basic
Earnings per Share ("Basic EPS") and Diluted Earnings per Share ("Diluted EPS").
Basic EPS excludes dilution and is computed by dividing net income by the
weighted average number of common shares outstanding during the reported period.
Diluted EPS reflects the potential dilution that could occur if stock options
and other commitments to issue common stock were exercised using the treasury
stock method. Earnings per share for all prior periods have been restated to
reflect the adoption of FAS 128.
THE COMPOSITION OF BASIC EPS AND DILUTED EPS IS AS FOLLOWS:
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
-------------------------------- --------------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,
1998 1997 1998 1997
------------ ------------ ------------ ------------
Net income ........................... $ 59,792 $ 44,292 $ 171,953 $ 124,637
============ ============ ============ ============
Weighted average shares .............. 140,018,639 136,294,984 138,775,555 135,355,851
============ ============ ============ ============
Basic earnings per share ............. $ 0.43 $ 0.32 $ 1.24 $ 0.92
============ ============ ============ ============
Weighted average shares including
the dilutive effect of stock options
(10,641,441 and 10,532,696 for the 13
weeks ended October 3, 1998 and
September 27, 1997, respectively, and
10,815,716 and 10,591,176 for the 39
weeks ended October 3, 1998 and
September 27, 1997, respectively) ... 150,660,080 146,827,680 149,591,271 145,947,027
============ ============ ============ ============
Diluted earnings per share ........... $ 0.40 $ 0.30 $ 1.15 $ 0.85
============ ============ ============ ============
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INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(DOLLARS IN 000S, EXCEPT PER SHARE DATA)
NOTE 3 - COMMON STOCK
The Company has two classes of Common Stock, consisting of 265,000,000
authorized shares of $0.01 par value Class A Common Stock and 135,000,000
authorized shares of $0.01 par value Class B Common Stock, and 1,000,000
authorized shares of $0.01 par value Preferred Stock. Class A stockholders are
entitled to one vote on each matter to be voted on by the stockholders whereas
Class B stockholders are entitled to ten votes on each matter to be voted on by
the stockholders. The two classes of stock have the same rights in all other
respects. Each share of Class B Common Stock may at any time be converted to a
share of Class A Common Stock; however, conversion will occur automatically on
the earliest to occur of (i) November 6, 2001; (ii) the sale or transfer of such
share of Class B Common Stock to any person not specifically authorized to hold
such shares by the Company's Certificate of Incorporation; or (iii) the date on
which the number of shares of Class B Common Stock then outstanding represents
less than 25% of the aggregate number of shares of Class A Common Stock and
Class B Common Stock then outstanding.
NOTE 4 - COMPREHENSIVE INCOME
Effective in the first quarter of fiscal 1998, the Company adopted Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("FAS 130"). FAS 130 establishes standards for reporting and displaying
comprehensive income and its components in the Company's consolidated financial
statements. Comprehensive income is defined in FAS 130 as the change in equity
(net assets) of a business enterprise during a period from transactions and
other events and circumstances from nonowner sources. Total comprehensive income
was $63,018 and $43,264 for the thirteen weeks ended October 3, 1998 and
September 27, 1997, respectively, and $173,801 and $117,180 for the thirty-nine
weeks ended October 3, 1998 and September 27, 1997, respectively. The primary
difference from net income as reported is the tax effected change in the
cumulative translation adjustment.
NOTE 5 - LONG-TERM DEBT
On June 9, 1998, the Company sold $1.33 billion aggregate principal amount
at maturity of its Zero Coupon Convertible Senior Debentures due 2018 in a
private placement. Gross proceeds from the offering were $460.4 million. The
debentures were sold at an issue price of $346.18 per $1,000 principal amount at
maturity (representing a yield to maturity of 5.375% per annum), and are
convertible into shares of the Company's Class A Common Stock at a rate of 5.495
shares per $1,000 principal amount at maturity, subject to adjustment under
certain circumstances. The debentures are currently convertible into
approximately 7.3 million shares of the Company's Class A Common Stock. The
debentures are redeemable at the option of the Company on or after June 9, 2003
at the issue price plus accrued original issue discount to the date of
redemption. Each debenture is subject to repurchase at the option of the holder
as of June 9, 2001, June 9, 2003, June 9, 2008 and June 9, 2013, or if there is
a Fundamental Change (as defined), at the issue price plus accrued original
issue discount to the date of redemption. In the event of a repurchase at the
option of a holder (other than upon a Fundamental Change), the Company may, at
its option, pay in cash or Class A Common Stock, or any combination thereof. In
the case of any such repurchase as of June 9, 2001, the Company may elect, in
lieu of the payment of cash or Class A Common Stock, to satisfy the redemption
in new Zero Coupon Convertible Senior Debentures due 2018.
NOTE 6 - ACQUISITION
On July 28, 1998, the Company completed the acquisition of Tech Data
Corporation's 99% and 91% interest in the outstanding common and preferred
stock, respectively, of Munich, Germany-based Macrotron AG ("Macrotron") for
approximately $100 million in cash. The acquisition was accounted for using the
purchase method and the results of Macrotron's operations have been combined
with those of the Company since the effective date of acquisition of July 1,
1998. The purchase price was allocated to the assets acquired and liabilities
assumed based
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INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(DOLLARS IN 000S, EXCEPT PER SHARE DATA)
on their estimated fair values at the date of acquisition. The excess of the
purchase price over net assets acquired is being amortized on a straight-line
basis over 20 years. The final allocation of the purchase price may vary as
additional information is obtained, and accordingly, the ultimate allocation may
differ from those used in the unaudited consolidated financial statements
included herein.
NOTE 7 - NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosure about Segments of an
Enterprise and Related Information" ("FAS 131"), which will become effective for
the Company's full fiscal year 1998 reporting. FAS 131 establishes standards for
the way publicly-held companies report information about operating segments as
well as disclosures about products and services, geographic areas and major
customers. However, the Company does not expect the adoption of FAS 131 to have
a material impact on its reported consolidated financial condition or results of
operations.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("FAS 133"), which will become effective for the Company
in fiscal 2000. FAS 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. However, the Company does not expect the adoption of FAS 133 to have
a material impact on its reported consolidated financial condition or results of
operations.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth the Company's net sales by geographic region
(excluding intercompany sales), and the percentage of total net sales
represented thereby, for each of the periods indicated.
Thirteen Weeks Ended Thirty-nine Weeks Ended
--------------------------------------------- ---------------------------------------------
October 3, September 27, October 3, September 27,
1998 1997 1998 1997
-------------------- ------------------ ------------------- ------------------
(dollars in millions)
Net sales by geographic region:
United States ..... $ 3,764 65.9% $ 2,983 73.0% $10,699 67.7% $ 8,090 70.6%
Europe ............ 1,453 25.5% 716 17.5% 3,639 23.0% 2,185 19.1%
Other ............. 491 8.6% 388 9.5% 1,476 9.3% 1,179 10.3%
------- ----- ------- ----- ------- ----- ------- -----
Total ............. $ 5,708 100.0% $ 4,087 100.0% $15,814 100.0% $11,454 100.0%
======= ===== ======= ===== ======= ===== ======= =====
The following table sets forth certain items from the Company's Consolidated
Statement of Income as a percentage of net sales, for each of the periods
indicated.
PERCENTAGE OF NET SALES
-----------------------------------------------------
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
-------------------------- -------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,
1998 1997 1998 1997
----- ----- ----- -----
Net sales ............................. 100.0% 100.0% 100.0% 100.0%
Cost of sales ......................... 93.7% 93.5% 93.7% 93.5%
----- ----- ----- -----
Gross profit .......................... 6.3% 6.5% 6.3% 6.5%
Expenses:
SG&A expenses ..................... 4.2% 4.4% 4.1% 4.3%
Noncash compensation charge ....... 0.0% 0.0% 0.0% 0.1%
----- ----- ----- -----
Income from operations ................ 2.1% 2.1% 2.2% 2.1%
Other expense, net .................... 0.4% 0.2% 0.4% 0.2%
----- ----- ----- -----
Income before income taxes and minority
interest ............................ 1.7% 1.9% 1.8% 1.9%
Provision for income taxes ............ 0.7% 0.8% 0.7% 0.8%
Minority interest ..................... 0.0% 0.0% 0.0% 0.0%
----- ----- ----- -----
Net income ............................ 1.0% 1.1% 1.1% 1.1%
===== ===== ===== =====
THIRTEEN WEEKS ENDED OCTOBER 3, 1998 COMPARED TO THIRTEEN WEEKS ENDED SEPTEMBER
27, 1997
Consolidated net sales increased 39.7% to $5.71 billion in the third
quarter of 1998 from $4.09 billion in the third quarter of 1997. The increase in
worldwide net sales was primarily attributable to growth in the computer-based
technology industry in general, the addition of new customers, increased sales
to the existing customer base, expansion of the Company's product offerings and
the July 1998 acquisition of Tech Data Corporation's majority interest in
Munich, Germany-based Macrotron.
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MANAGEMENT'S DISCUSSION AND ANALYSIS CONTINUED
Net sales from U.S. operations increased 26.2% to $3.76 billion in the third
quarter of 1998 from $2.98 billion in the third quarter of 1997. Net sales from
European operations increased 102.8% to $1.45 billion in the third quarter of
1998 from $716.4 million in the third quarter of 1997 primarily due to the July
1998 acquisition of substantially all of Macrotron combined with the reasons
stated in the preceding paragraph. Other net sales increased 26.6% to $490.8
million in the third quarter of 1998 from $387.8 million in the third
quarter of 1997, due to growth in net sales of the Company's Latin American,
Canadian and Export Division operations, partially due to the acquisition of
Computacion Tecnica, S.A. ("Computek") in the fourth quarter of 1997.
Cost of sales as a percentage of net sales increased to 93.7% in the third
quarter of 1998 compared to 93.5% in the third quarter of 1997. The increase was
largely attributable to ongoing competitive pricing pressures experienced in all
regions, especially in the U.S. and certain countries within Europe, as well as
an overall weaker economy in Latin America.
Total SG&A expenses increased 34.9% to $238.2 million in the third quarter
of 1998 from $176.6 million in the third quarter of 1997, but decreased as a
percentage of net sales to 4.2% in the third quarter of 1998 from 4.4% in the
third quarter of 1997. The increased level of spending was attributable to
expenses required to support expansion of the Company's business, consisting
primarily of incremental personnel and support costs, lease payments relating to
new operating facilities, expenses associated with the maintenance of
information systems, and the acquisition of Macrotron.
Noncash compensation charges decreased 37.2% to $1.1 million in the third
quarter of 1998 from $1.8 million in the third quarter of 1997. The amount of
noncash compensation charges decreases from year to year due to the impact of
vesting and forfeitures related to the underlying stock options. The Company
expects to record additional noncash compensation charges of $1.1 million in the
fourth quarter of 1998.
Income from operations increased 38.4% to $118.4 million in the third
quarter of 1998 from $85.6 million in the third quarter of 1997, and, as a
percentage of net sales, remained constant at 2.1% in the third quarters of 1998
and 1997, respectively. Income from operations in the U.S. increased as a
percentage of net sales to 2.9% in the third quarter of 1998 from 2.6% in the
third quarter of 1997 primarily due to a reduction of operating costs as a
percentage of sales resulting from economies of scale partially offset by a
slight reduction in gross profit as a percentage of sales. Income from
operations in Europe decreased as a percentage of European net sales to 0.4% in
the third quarter of 1998 from 0.7% in the third quarter of 1997. Although
European operating costs as a percentage of European net sales have remained
relatively constant in the third quarter of 1998 compared to the third quarter
of 1997, ongoing competitive pricing pressures have negatively impacted gross
profits as a percentage of net sales, especially within certain countries in
Europe, causing a reduction in income from operations as a percentage of net
sales. Income from operations for other regions declined as a
percentage of net sales to 1.1% in the third quarter of 1998 from 1.6% in the
third quarter of 1997. Similar to Europe, other regions
experienced consistent operating costs as a percentage of net sales in the third
quarter of 1998 compared to the third quarter of 1997; however, competitive
pricing pressures along with weak currencies and weak overall market conditions
within Latin America negatively impacted gross profit as a percentage of net
sales, causing a reduction in income from operations as a percentage of net
sales.
Other expense, net, which consists primarily of interest expense, foreign
currency exchange losses, and miscellaneous non-operating expenses, increased
92.7% to $19.1 million in the third quarter of 1998 from $9.9 million in the
third quarter of 1997, and increased as a percentage of net sales to 0.3% in the
third quarter of 1998 from 0.2% in the third quarter of 1997. The increase in
other expense, net, is primarily attributable to increased interest expense in
the third quarter of 1998 as a result of increased borrowings to finance
acquisitions, ongoing sales growth, and the expansion of the Company's business.
The increase also reflected an increase in foreign currency exchange losses
primarily attributable to the ongoing international economic conditions which
have led to weaker currencies in Latin America as compared to the U.S. dollar.
The provision for income taxes increased 27.2% to $39.5 million in the third
quarter of 1998 from $31.1 million in the third quarter of 1997, reflecting the
31.3% increase in the Company's income before income taxes and minority
interest. The Company's effective tax rate was 39.8% in the third quarter of
1998 compared to 41.1%
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MANAGEMENT'S DISCUSSION AND ANALYSIS CONTINUED
in the third quarter of 1997. The decrease in the effective tax rate was
primarily due to the reduction in the noncash compensation charge, much of which
is not deductible for tax purposes, as well as certain international taxes in
1998.
Excluding noncash compensation charges, net of tax, net income increased
32.5% to $60.7 million in the third quarter of 1998 from $45.8 million in the
third quarter of 1997, and, as a percentage of net sales, remained constant at
1.1% for the third quarter of 1998 and the third quarter of 1997. Net income,
including noncash compensation charges, increased 35.0% to $59.8 million in the
third quarter of 1998 from $44.3 million in the third quarter of 1997. Diluted
earnings per share, including the noncash compensation charge, increased 33.3%
to $0.40 in the third quarter of 1998 from $0.30 in the third quarter of 1997.
THIRTY-NINE WEEKS ENDED OCTOBER 3, 1998 COMPARED TO THIRTY-NINE WEEKS ENDED
SEPTEMBER 27, 1997
Consolidated net sales for the first nine months of 1998 increased 38.1% to
$15.81 billion from $11.45 billion in the first nine months of 1997. The
increase in worldwide net sales is largely attributable to the same factors
summarized in the discussion of net sales for the thirteen weeks ended October
3, 1998 and September 27, 1997. In addition to these factors, U.S. net sales
were positively impacted by the acquisition of the Intellegent Electronics Inc.
("IE") indirect distribution business, its Reseller Network Division ("RND"),
which was completed on July 18, 1997.
Net sales from U.S. operations increased 32.3% to $10.70 billion in the
first nine months of 1998 from $8.09 billion in the first nine months of 1997
due primarily to the same factors summarized in the discussion of net sales for
the thirteen weeks ended October 3, 1998 and September 27, 1997, as well as the
acquisition of RND. Net sales from European operations increased 66.5% to $3.64
billion in the first nine months of 1998 from $2.19 billion in the first nine
months of 1997 due in part to the positive impact of the acquisition of
Macrotron in the third quarter of 1998 and the same factors summarized in the
discussion of European net sales for the thirteen weeks ended October 3, 1998
and September 27, 1997. Other net sales increased 25.2% to $1.48 billion in the
first nine months of 1998 from $1.18 billion in the first nine months of 1997,
due to growth in net sales of the Company's Latin American, Canadian and Export
Division operations partially due to the acquisition of Computek in the fourth
quarter of 1997.
Cost of sales as a percentage of net sales increased to 93.7% in the first
nine months of 1998 from 93.5% in the first nine months of 1997. The increase
was largely attributable to the same factors summarized in the discussion of
cost of sales for the thirteen weeks ended October 3, 1998 and September 27,
1997.
Total SG&A expenses increased 33.0% to $654.4 million in the first nine
months of 1998 from $492.0 million in the first nine months of 1997, but
decreased as a percentage of net sales to 4.1% in the first nine months of 1998
from 4.3% in the first nine months of 1997. The increased level of spending was
largely attributable to the same factors summarized in the discussion of SG&A
expenses for the thirteen weeks ended October 3, 1998 and September 27, 1997.
Noncash compensation charges decreased 36.0% to $3.4 million in the first
nine months of 1998 from $5.4 million in the first nine months of 1997. The
amount of noncash compensation charges decreases from year to year due to the
impact of vesting and forfeitures related to the underlying stock options.
Income from operations increased 41.8% to $345.4 million in the first nine
months of 1998 from $243.6 million in the first nine months of 1997, and, as a
percentage of net sales, increased to 2.2% in the first nine months of 1998 from
2.1% in the first nine months of 1997. Income from operations in the U.S.
increased as a percentage of net sales to 2.8% in the first nine months of 1998
from 2.6% in the first nine months of 1997 due largely to the same factors
summarized in the discussion of U.S. income from operations for the thirteen
weeks ended October 3, 1998 and September 27, 1997. Income from operations in
Europe improved as a percentage of European net sales to 1.0% in the first nine
months of 1998 from 0.7% in the first nine months of 1997 primarily due to the
reduction of operating costs as a percentage of European net sales, partially
offset by competitive pricing pressures in the third quarter of 1998 (as
discussed above). Income from operations for other regions decreased as a
percentage of net sales to 1.2% in the first nine months of 1998 from 1.8% in
the first nine months of 1997 due largely to the same factors summarized in the
discussion of income from operations for the thirteen weeks ended October 3,
1998 and September 27, 1997.
11
12
MANAGEMENT'S DISCUSSION AND ANALYSIS CONTINUED
Other expense, net, which consists primarily of interest expense, foreign
currency exchange losses, and miscellaneous non-operating expenses, increased
91.9% to $59.4 million in the first nine months of 1998 from $31.0 million in
the first nine months of 1997, and increased as a percentage of net sales to
0.4% in the first nine months of 1998 from 0.3% in the first nine months of
1997. The increase in other expense, net, is primarily attributable to the same
factors summarized in the discussion of other expense for the thirteen weeks
ended October 3, 1998 and September 27, 1997.
The provision for income taxes increased 30.9% to $114.0 million in the
first nine months of 1998 from $87.1 million in the first nine months of 1997,
reflecting the 34.5% increase in the Company's income before income taxes and
minority interest. The Company's effective tax rate was 39.9% in the first nine
months of 1998 compared to 41.0% in the first nine months of 1997. The decrease
in the effective tax rate was primarily due to the reduction in the noncash
compensation charge, much of which is not deductible for tax purposes, as well
as certain international taxes in 1998.
Excluding noncash compensation charges, net of tax, net income increased
35.4% to $174.7 million in the first nine months of 1998 from $129.1 million in
the first nine months of 1997, and, as a percentage of net sales, remained
constant at 1.1% for the first nine months of 1998 and the first nine months of
1997. Pro forma diluted earnings per share, excluding noncash compensation
charges, increased 33.0% to $1.17 in the first nine months of 1998 from $0.88 in
the first nine months of 1997. Net income, including noncash compensation
charges, increased 38.0% to $172.0 million in the first nine months of 1998 from
$124.6 million in the first nine months of 1997. Diluted earnings per share,
including the noncash compensation charge, increased 35.3% to $1.15 in the first
nine months of 1998 from $0.85 in the first nine months of 1997.
QUARTERLY DATA; SEASONALITY
The Company's quarterly sales and operating results have varied in the past
and will likely continue to do so in the future as a result of seasonal
variations in the demand for the products and services offered by the Company,
the introduction of new hardware and software technologies and products offering
improved features and functionality, the introduction of new products and
services by the Company and its competitors, the loss or consolidation of a
significant supplier or customer, changes in the level of operating expenses,
inventory adjustments, product supply constraints, competitive conditions
including pricing, interest rate fluctuations, the impact of acquisitions,
currency fluctuations, and general economic conditions. The Company's narrow
operating margins may magnify such fluctuations, particularly on a quarterly
basis.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its growth and cash needs largely through income
from operations, borrowings, trade and supplier credit, the public sale of
23,200,000 shares of its Class A Common Stock at $18.00 per share in the initial
public offering completed in November 1996, and the issuance of zero coupon
convertible senior debentures in June 1998, which yielded $449.6 million in net
proceeds.
Cash provided by operating activities, net of the effect of acquisitions,
was $264.2 million in the first nine months of 1998 as compared to cash used by
operating activities of $109.2 million in the first nine months of 1997. The
increase in cash provided by operating activities in the first nine months of
1998 compared to the first nine months of 1997 was largely attributable to an
increase in net income and accounts payable and a decrease in inventory levels
during the first nine months of 1998 compared to the first nine months of 1997,
partially offset by an increase in accounts receivable. These changes were
primarily due to the overall sales growth combined with the management of
inventory levels and accounts payable. Net cash used by investing activities was
$191.6 million in the first nine months of 1998 compared to $35.6 million in the
first nine months of 1997. The increase was primarily due to the Company's
expansion of warehouse and other facilities as well as the acquisition of
Macrotron.
12
13
MANAGEMENT'S DISCUSSION AND ANALYSIS CONTINUED
Net cash used by financing activities was $72.1 million in the first nine
months of 1998 compared to net cash provided of $159.3 million in the first nine
months of 1997. The change was primarily a result of net repayments of the
Company's long-term indebtedness in the first nine months of 1998. In each of
the first nine months of 1998 and the first nine months of 1997, the Company
borrowed to finance the expansion of its business; however, in the first nine
months of 1998, the cash provided by operating activities (as discussed above)
allowed the Company to repay borrowings under the Company's revolving credit
facilities. The issuance of the Zero Coupon Convertible debentures in June 1998
did not have a material impact on the cash provided (used) by financing
activities, as the proceeds from the sale of the debentures were used to repay
outstanding indebtedness under the Company's revolving credit facilities.
The Company has three credit facilities with bank syndicates providing an
aggregate availability of $1.65 billion. Under the credit facilities, the
Company is required to comply with certain financial covenants, including
minimum tangible net worth, restrictions on funded debt and interest coverage.
The credit facilities also restrict the Company's ability to pay dividends.
Borrowings are subject to the satisfaction of customary conditions, including
the absence of any material adverse change in the Company's business or
financial condition. At October 3, 1998, the Company had $521.6 million in
outstanding borrowings under the credit facilities.
The Company has an arrangement with a trust pursuant to which certain U.S.
trade accounts receivable of the Company are transferred to the trust, which in
turn has sold certificates representing undivided interests in the total pool of
trade receivables without recourse. The trust has issued fixed-rate medium-term
certificates and a variable rate certificate to support a commercial paper
program. At October 3, 1998, the amount of medium-term certificates outstanding
totaled $100 million and the amount of commercial paper outstanding totaled $150
million. The Company believes that there are sufficient trade accounts
receivables to support the outstanding medium-term certificates as well as the
commercial paper program.
On June 9, 1998, the Company sold $1.33 billion aggregate principal amount
at maturity of its Zero Coupon Convertible Senior Debentures due 2018 in a
private placement. Gross proceeds from the offering were $460.4 million. The
debentures were sold at an issue price of $346.18 per $1,000 principal amount at
maturity (representing a yield to maturity of 5.375% per annum), and are
convertible into shares of the Company's Class A Common Stock at a rate of 5.495
shares per $1,000 principal amount at maturity, subject to adjustment under
certain circumstances. The debentures are currently convertible into
approximately 7.3 million shares of the Company's Class A Common Stock. The
debentures are redeemable at the option of the Company on or after June 9, 2003
at the issue price plus accrued original issue discount to the date of
redemption. Each debenture is subject to repurchase at the option of the holder,
as of June 9, 2001, June 9, 2003, June 9, 2008, and June 9, 2013, or if there is
a Fundamental Change (as defined), at the issue price plus accrued original
issue discount to the date of the redemption. In the event of a repurchase at
the option of the holder (other than upon a Fundamental Change), the Company
may, at its option, satisfy the redemption in cash or Class A Common Stock, or
any combination thereof. In the case of any such repurchase as of June 9, 2001,
the Company may elect, in lieu of the payment of cash or Class A Common Stock,
to satisfy the redemption in new Zero Coupon Convertible Senior Debentures due
2018.
On July 28, 1998, the Company completed the acquisition of substantially all
of Macrotron for approximately $100 million in cash.
The Company announced on October 12, 1998 that it has entered into a
strategic alliance with SOFTBANK Corporation ("SOFTBANK"), Japan's largest
distributor of software and computer technology publications. In connection with
the alliance, the Company will make a $50 million investment in SOFTBANK common
stock, while SOFTBANK will take an equally valued position in Ingram Micro
common stock. The Company expects to finance the purchase of SOFTBANK common
stock using available working capital and borrowings under its existing credit
facilities. SOFTBANK will purchase the Company's common stock from existing
outstanding shares.
13
14
MANAGEMENT'S DISCUSSION AND ANALYSIS CONTINUED
NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosure about Segments of an
Enterprise and Related Information" ("FAS 131"), which will become effective for
the Company's full fiscal year 1998 reporting. FAS 131 establishes standards for
the way publicly-held companies report information about operating segments as
well as disclosures about products and services, geographic areas and major
customers. However, the Company does not expect the adoption of FAS 131 to have
a material impact on its reported consolidated financial condition or results of
operations.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("FAS 133"), which will become effective for the Company
in fiscal year 2000. FAS 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. However, the Company does not expect the adoption of FAS 133 to have
a material impact on its reported consolidated financial condition or results of
operations.
YEAR 2000 MATTERS
INTRODUCTION. The Company's Year 2000 ("Y2K") readiness issues are broad and
complex. As is the case with many computer software systems, some of the
Company's systems use two digit data fields which recognize dates using the
assumption that the first two digits are "19" (i.e., the number "98" is
recognized as the year "1998"). Therefore, the Company's date critical functions
relating to Y2K and beyond, such as sales, distribution, purchasing, inventory
control, facilities, and financial systems, may be severely affected unless
changes are made to these systems.
STATE OF READINESS. With the assistance of an outside consultant, the
Company commenced a review of the Company's internal information technology
("IT") systems to identify applications that are not Y2K ready and to assess the
impact of the Y2K problem. The Company developed an overall plan to modify its
internal systems to be Y2K ready. In addition, the Company formed a Y2K Global
Project Team to provide global oversight to the Company's Y2K readiness
activities in the IT and non-IT areas, the assessment of Y2K risks in connection
with third party relationships and the development of contingency plans.
The Company's Y2K plan is divided into three major sections: IT systems,
non-IT systems ("Non-IT Systems"), and Y2K interfaces with material third
parties. The broad phases of the plan are generally common to all three
sections. The phases consist of: (1) inventorying potential Y2K-sensitive items,
(2) assigning priorities to identified items, (3) assessing the Y2K readiness
of items determined to be material to the Company, (4) repairing or replacing
material items that are determined not to be Y2K ready ("remediation"), (5)
testing material items and/or certification of Y2K readiness, i.e., validation
and written confirmation that the process, activity or component can properly
process a date beyond December 31, 1999 as it does earlier dates and (6)
designing and implementing contingency and business continuation plans for the
Company.
INFORMATION TECHNOLOGY SYSTEMS. The Company has completed an inventory of
all of its global hardware, operating systems, software (including business
applications, but excluding desktop software such as office tools) and
electronic interfaces ("IT Systems") for Y2K remediation. The Company
anticipates that it will complete (1) technical assessment by the end of
December 1998, (2) remediation and unit testing or upgrading/replacement in the
second quarter of 1999, (3) system and century testing in the third quarter of
1999, and (4) certification of Y2K readiness of all of its IT Systems in the
third quarter of 1999. The Company uses different test methodologies for
different phases: (1) unit testing is used to verify
14
15
MANAGEMENT'S DISCUSSION AND ANALYSIS CONTINUED
that the individual changed components function properly at the unit level, (2)
system/integration testing is used to verify that all changed components
function as a complete system, (3) regression testing is used to verify that
changes made for Y2K readiness do not impact any other functions within the IT
system, and (4) century testing, i.e., simulating the transition to January 1,
2000, is used to validate that the entire IT system will function on or after
such date. With respect to desktop software on the Company's personal computers,
the Company plans to provide a list of Y2K ready versions of software to all
associates by the end of 1998. Associates will be advised that if they have
non-Y2K ready versions of software on their personal computers, they must
request upgrades to Y2K ready versions of software and make appropriate
adjustments to date-sensitive databases or programs. The Company will provide
the necessary IT support to upgrade associates' personal computers and will
periodically remind associates to assure that the necessary upgrades occur.
NON-INFORMATION TECHNOLOGY SYSTEMS. The Non-IT Systems consist of any
device which is able to store and report date-related information, such as
access control systems, elevators, escalators, conveyors and sensors; building
systems; and other items containing a microprocessor or an internal clock such
as hand-held computers used to assist with inventory control, electric power
distribution systems and vaults. The Company's plan provides that (1) by the end
of the first quarter of 1999, the global inventory and assessment of its Non-IT
Systems will be completed, (2) by the end of the second quarter of 1999, all
Non-IT Systems that are deemed business critical will either (a) have written
certifications that they are Y2K ready (e.g., confirmations from manufacturers
that the product is not impacted by the Y2K date transition or will continue to
operate on and after January 1, 2000, just as it did prior to such date) or (b)
have been replaced and/or modified to be Y2K ready, and (3) by the end of the
second quarter of 1999, all other Non-IT Systems that are deemed non-Y2K ready
will have been replaced and/or modified to be Y2K ready.
Y2K INTERFACES WITH MATERIAL THIRD PARTIES. The Company has commenced an
inventory of third parties (including, among other things, domestic and
international suppliers and vendors, financial service providers and
transportation and other logistics providers) whose failure to be Y2K ready
could have a material adverse effect on the Company's business, financial
condition or results of operations. The Company plans on sending questionnaires
to all such third parties in order to determine their current Y2K status,
tracking responses to these questionnaires and using such responses towards
contingency plan development. The Company anticipates that it will have
completed such assessment and inquiry by the end of the second quarter of 1999.
COSTS TO ADDRESS Y2K READINESS. The Company anticipates that its total
expenditures on Y2K readiness efforts (excluding compensation and benefit costs
for associates who do not spend full time on the Y2K project and costs of
systems upgrades that would normally have been made on a similar timetable) with
respect to IT Systems will not exceed $10 million. However, such amount does not
reflect costs for upgrades to servers, personal computers, communications
equipment and Non-IT Systems on a global basis as the scope of this cost will
not be known until the Company has completed technical assessment of all of
these areas. Although there are opportunity costs and some diversion of human
resources to the Company's Y2K readiness efforts, management believes that no
significant IT projects have been deferred or accelerated due to this effort.
CONTINGENCY PLANNING AND RISKS. The Y2K Global Project Team is responsible
for the development of a global contingency plan to address the Company's
at-risk business functions as a result of Y2K issues. The Company anticipates
that development of such a global contingency plan will be completed in the
second quarter of 1999. In the normal course of business, the Company maintains
and deploys contingency plans designed to address various other potential
business interruptions. For example, the Company has the capability to
automatically reroute incoming calls, such as from its Santa Ana (West Coast
sales) facility to its Buffalo (East Coast sales) facility, and the ability to
reroute warehouse shipping from one U.S. location to another location. Although
these plans are not Y2K specific, they
15
16
MANAGEMENT'S DISCUSSION AND ANALYSIS CONTINUED
may be applicable to address limited Y2K failures or interruption of support
provided by some third parties resulting from their failure to be Y2K ready.
The Company's global IT and Non-IT operations are highly centralized in the
United States. The Company's strategy with respect to Y2K readiness is to
resolve its Y2K issues from a global perspective first through its U.S.
operations. For example, the Company's core enterprise system, IMpulse, is based
in the U.S., but operates globally. Remediation of this system is effective
across the Company's entire operations. However, the Company may continue to
experience risks with respect to new acquisitions where new management may not
be as familiar with the computer systems (although the Company strives to
convert newly acquired operations to IMpulse as soon as possible), or the
existing associates may not be familiar with the Company's Y2K plan.
The failure to correct a material Y2K problem could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failure could materially and adversely affect the Company's
results of operations, liquidity and financial condition. In addition, the
Company's operating results could be materially adversely affected if it were to
be held responsible for the failure of any products sold by the Company to be
Y2K ready despite the Company's disclaimer of product warranties and the
limitation of liability contained in its sales terms and conditions.
EURO CONVERSION
On January 1, 1999, a single currency called the euro will be introduced in
Europe. Eleven of the fifteen member countries of the European Union have agreed
to adopt the euro as their common legal currency on that date. Fixed conversion
rates between these participating countries' existing currencies (the "legacy
currencies") and the euro will be established as of that date. The legacy
currencies are scheduled to remain legal tender as denominations of the euro
until at least January 1, 2002 (but not later than July 1, 2002). During this
transition period, parties may settle transactions using either the euro or a
participating country's legacy currency. Beginning in January 2002, new
euro-denominated bills and coins will be issued and legacy currencies will be
withdrawn from circulation. The Company has established plans to address the
issues raised by the euro currency conversion. These issues include, among
others, the need to adapt computer information systems and business processes
and equipment to accommodate euro-denominated transactions; the need to analyze
the legal and contractual implications on contracts; and the ability of the
Company's customers and vendors to accommodate euro-denominated transactions on
a timely basis. Since the Company's information systems and processes generally
accommodate multiple currencies, the Company anticipates that modifications to
its information systems, equipment and processes will be made on a timely basis
and does not expect that the costs of such modifications will have a material
effect on the Company's financial position or results of operations.
16
17
MANAGEMENT'S DISCUSSION AND ANALYSIS CONTINUED
CAUTIONARY STATEMENTS FOR THE PURPOSE OF THE SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
In connection with the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company, in its Annual Report on Form 10-K
for the year ended January 3, 1998, outlined cautionary statements identifying
important factors that could cause the Company's actual results to differ
materially from those projected in forward-looking statements made by, or on
behalf of, the Company. Such forward-looking statements, as made within this
Form 10-Q, should be considered in conjunction with the information included in
the Company's Annual Report on Form 10-K for the year ended January 3, 1998,
including Exhibit 99.01 attached thereto; other risks or uncertainties may be
detailed from time to time in the Company's future Securities and Exchange
Commission filings.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
17
18
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the Company's fiscal quarter ended July 4, 1998, the Company issued
certain shares of Class A Common Stock and Class B Common Stock. Of these
shares, 34,456 shares of Class A Common Stock issued in the quarter ended July
4, 1998 were issued upon exercise of Rollover Stock Options, at exercise prices
ranging from $0.66 to $2.85 per share, in transactions that were exempt from
registration pursuant to Rule 701 under the Securities Act of 1933, because
such Rollover Stock Options were originally granted by Ingram Industries prior
to the Split-Off. There were no such unregistered sales during the Company's
fiscal quarter ended October 3, 1998.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
No. Description
--- -----------
10.40 Second Amendment to Credit Agreement dated as of September 25, 1998,
among the Company, Ingram European Coordination Center N.V. ("IECC"),
and Ingram Micro Inc. (Canada), as Borrowers and Guarantors, and
certain financial institutions as the Relevant Required Lenders,
amending the US $1,000,000,000 Credit Agreement dated as of October
30, 1996, also among certain financial institutions, as the Lenders,
NationsBank, N.A. (successor in interest by merger with NationsBank
of Texas, N.A.), as Administrative Agent for the Lenders, and The
Bank of Nova Scotia, as Documentation Agent for the Lenders and
certain named Co-Agents.
10.41 First Amendment to European Credit Agreement dated as of September
25, 1998, among the Company and IECC as the Primary Borrowers and
Guarantors, and certain financial institutions as the Relevant
Required Lenders, amending the US $500,000,000 European Credit
Agreement dated as of October 28, 1997, also among the Company and
IECC, as the Primary Borrowers and Guarantors, certain financial
institutions as the Lenders, The Bank of Nova Scotia, as
Administrative Agent for the Lenders and NationsBank, N.A. (successor
in interest by merger to NationsBank of Texas, N.A.), as
Documentation Agent for the Lenders, as arranged by The Bank of Nova
Scotia and NationsBanc Capital Markets, Inc., as the Arrangers.
10.42 First Amendment to Canadian Credit Agreement dated as of September
25, 1998, among the Company and Ingram Micro Inc. (Canada) as the
Borrowers and Guarantors, and certain financial institutions as the
Relevant Required Lenders, amending the US $150,000,000 Canadian
Credit Agreement dated as of October 28, 1997, also among the
Company, Ingram Micro Inc. (Canada) as the Borrowers and Guarantors,
certain financial institutions as the Lenders, The Bank of Nova
Scotia, as Administrative Agent for the Lenders, Royal Bank of
Canada, as Syndication Agent for the Lenders, and Bank of
Tokyo-Mitsubishi (Canada) as the Co-Agent.
27 Financial Data Schedule
b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the thirteen weeks
ended October 3, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INGRAM MICRO INC.
By: /s/ Michael J. Grainger
----------------------------------------------
Name: Michael J. Grainger
Title: Executive Vice President and Worldwide Chief
Financial Officer (Principal Financial Officer
and Principal Accounting Officer)
November 17, 1998
18
19
EXHIBIT INDEX
Exhibit Number Description
- - -------------- -----------
10.40 Second Amendment to the Credit Agreement
10.41 First Amendment to the European Credit Agreement
10.42 First Amendment to the Canadian Credit Agreement
27 Financial Data Schedule
1
EXHIBIT 10.40
SECOND AMENDMENT TO CREDIT AGREEMENT
dated as of September 25, 1998,
among
INGRAM MICRO INC.,
INGRAM EUROPEAN COORDINATION CENTER N.V., and
INGRAM MICRO INC. (CANADA),
as Borrowers and Guarantors, and
CERTAIN FINANCIAL INSTITUTIONS,
as the Relevant Required Lenders
amending the US $1,000,000,000
CREDIT AGREEMENT
dated as of October 30, 1996,
also among
CERTAIN FINANCIAL INSTITUTIONS,
as the Lenders,
NATIONSBANK, N.A.
(successor in interest by merger with NationsBank of Texas, N.A.),
as Administrative Agent for the Lenders,
THE BANK OF NOVA SCOTIA,
as Documentation Agent for the Lenders,
and
THE CHASE MANHATTAN BANK,
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK, CAYMAN ISLANDS BRANCH,
THE FIRST NATIONAL BANK OF CHICAGO,
THE INDUSTRIAL BANK OF JAPAN, LIMITED, ATLANTA AGENCY, and
ROYAL BANK OF CANADA,
as the Co-Agents
PREPARED BY HAYNES AND BOONE, L.L.P.
2
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS DOCUMENT is entered into as of September 25, 1998, among:
INGRAM MICRO INC., a corporation organized and existing under the laws
of the State of Delaware, United States of America ("MICRO");
INGRAM EUROPEAN COORDINATION CENTER, N.V., a company organized and
existing under the laws of The Kingdom of Belgium ("COORDINATION
CENTER"), and INGRAM MICRO INC., a corporation organized and existing
under the laws of the Province of Ontario, Canada ("MICRO CANADA"),
both of which are collectively the "SUPPLEMENTAL BORROWERS"; and
The financial institutions executing this document as Lenders (the
"RELEVANT REQUIRED LENDERS").
(see PARAGRAPH 1 below regarding defined terms)
This document is being executed and delivered to amend certain
provisions of the Credit Agreement (as renewed, extended, amended, or
supplemented, the "CREDIT AGREEMENT") dated as of October 30, 1996, among (a)
Micro; (b) the Supplemental Borrowers; (c) Ingram Micro Singapore Pte Ltd., a
corporation organized and existing under the laws of Singapore ("MICRO
SINGAPORE"); (d) certain Lenders (which includes the Relevant Required Lenders);
(e) NationsBank, N.A. (successor in interest by merger with NationsBank of
Texas, N.A., "NATIONSBANK"), as administrative agent for the Lenders (in such
capacity, the "ADMINISTRATIVE AGENT"), and The Bank of Nova Scotia
("SCOTIABANK"), as documentation agent for the Lenders (in such capacity, the
"DOCUMENTATION AGENT"), both of which are collectively the "AGENTS"; and (f) The
Chase Manhattan Bank; DG Bank Deutsche Genossenschaftsbank, Cayman Island
Branch; The First National Bank of Chicago; The Industrial Bank of Japan,
Limited, Atlanta Agency; and Royal Bank of Canada, as co-agents (collectively in
such capacity, the "CO-AGENTS"). Effective December 22, 1997, Micro Singapore
ceased to be a Subsidiary of Micro, and effective January 15, 1998, in
accordance with SECTION 11.16 of the Credit Agreement, Micro Singapore ceased to
be a Supplemental Borrower and Guarantor under the Credit Agreement.
The Relevant Required Lenders have agreed, upon and subject to the
terms and conditions of this document, to amend the terms of the Credit
Agreement as provided below.
ACCORDINGLY, for adequate and sufficient consideration, the Borrowers
and the Relevant Required Lenders agree as follows:
I. TERMS AND REFERENCES. Unless otherwise stated in this document, terms defined
in the Credit Agreement have the same meanings when used in this document, and
references to "ARTICLES," "SECTIONS," "Schedules," and "EXHIBITS" are to the
Credit Agreement's articles, sections, schedules, and exhibits
I. AMENDMENTS. Subject to PARAGRAPH 3 below but otherwise effective as of the
date of this document, the Credit Agreement is amended as follows:
A. SECTION 1.1 is amended by adding or entirely amending, as the case
may be, the following defined terms in alphabetical order with all other defined
terms in that section:
"ACQUIRED EXISTING DEBT AND LIENS" means, for a
period of 90 days following the acquisition or merger of a
Person by or into Micro or any of its Subsidiaries or the
acquisition of a business unit of a Person or the assets of a
3
Person or business unit of a Person by Micro or any of its
Subsidiaries, the Indebtedness and Liens of that Person or
business unit that (a) were not incurred in connection with
that acquisition or merger and do not constitute any
refinancing of Indebtedness so incurred and (b) were in
existence at the time of that acquisition or merger.
"ADDITIONAL PERMITTED LIENS" means, as of any date
(a) Liens securing Indebtedness and not described in CLAUSES
(a) through (L) of SECTION 8.2.2, but only to the extent that
(i) the Amount of Additional Liens on that date does not
exceed twenty percent (20%) of Consolidated Tangible Net Worth
on that date and (ii) Borrowers are otherwise in compliance
with SECTION 8.2.1(b), and (b) Liens constituting Acquired
Existing Debt and Liens on that date.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not
domiciled in the United States.
"MICRO SINGAPORE" is defined in the preamble but is
no longer party to any Loan Document.
"SENIOR CONSOLIDATED FUNDED DEBT" means, as of any
date of determination, the total of all Consolidated Funded
Debt of Micro and its Consolidated Subsidiaries outstanding on
such date that ranks PARI PASSU with the Obligations.
B. The definition of "Material Asset Acquisition" in SECTION 1.1 is
amended to add the words "or 8.2.9(d)" at the end of it.
C. In the definition of "Total Indebtedness of Subsidiaries" in SECTION
1.1 (i) the word "and" before CLAUSE (b) is replaced with a comma and (ii) a new
CLAUSE (c) is added as follows:
, and (c) any Indebtedness under any Loan Document (as defined
in this Agreement, the Canadian Credit Agreement, and the
European Credit Agreement).
D. SECTION 1.1 is amended by entirely deleting the definitions of the
terms "Consolidated Current Assets," "Consolidated Current Liabilities," and
"Consolidated Current Ratio".
E. SECTION 6.3.3 is amended by adding the parenthetical "(OTHER THAN a
Foreign Subsidiary)" after the 18th and 19th words "Material Subsidiary" in that
section.
F. A new SECTION 7.18 is added as follows:
SECTION 7.18 YEAR 2000. Micro believes that its
computer applications that are material to its business and
operations will be able to perform properly date-sensitive
functions for all dates on and after January 1, 2000, EXCEPT
to the extent that a failure to do so would not reasonably be
expected to have a Material Adverse Effect.
G. SECTION 8.1.10 is amended by (i) adding the parenthetical "(OTHER
THAN Foreign Subsidiaries)" after the 9th word "Subsidiaries" in CLAUSE (b) of
that section, and (ii) entirely amending the third parenthetical in the second
sentence of that section as follows:
(at least to the extent of the form of Additional Guaranty
attached as EXHIBIT J)
H. SECTION 8.2.1(b) is entirely amended as follows:
SECOND AMENDMENT
4
(b) Micro will not at the end of any Fiscal Period
permit (i) Total Indebtedness of Subsidiaries (OTHER THAN
Indebtedness of any Guarantor and Indebtedness constituting
Acquired Existing Debt and Liens) to exceed twenty percent
(20%) of Consolidated Tangible Net Worth, or (ii) SECTION
8.2.2(m) to be violated.
I. SECTIONS 8.2.2(k) and (l) are entirely amended as follows:
(k) Liens of the nature referred to in CLAUSE (b) of
the definition of the term "LIEN" and granted to a purchaser
or any assignee of such purchaser which has financed the
relevant purchase of Trade Accounts Receivable of any Borrower
or any of their respective subsidiaries and Liens on any
related property that would ordinarily be subject to a Lien in
connection therewith such as proceeds and records;
(l) Liens on accounts receivable of Micro Canada with
respect to any accounts receivable securitization program and
on any related property that would ordinarily be subject to a
Lien in connection therewith such as proceeds and records; and
J. SECTION 8.2.3(a) is entirely amended as follows:
(a) [INTENTIONALLY BLANK]
K. SECTION 8.2.3(c) is entirely amended as follows:
(c) (i) the ratio of (A) the average daily balances
of Senior Consolidated Funded Debt during any Fiscal Period to
(B) Consolidated EBITDA for the period of four Fiscal Periods
ending on the last day of such Fiscal Period to exceed 3.5 to
1.0; and (ii) the ratio of (A) the average daily balances of
Consolidated Funded Debt during any Fiscal Period (B) to
Consolidated EBITDA for the period of four Fiscal Periods
ending on the last day of such Fiscal Period to exceed 4.0 to
1.0;
PROVIDED THAT, for purposes of calculating the preceding
ratios (A) Consolidated Funded Debt on any day shall be the
amount otherwise determined pursuant to the definition thereof
plus the amount of Consolidated Transferred Receivables on
such day, and (B) the contribution of any Subsidiary of Micro
acquired (to the extent the acquisition is treated for
accounting purposes as a purchase) during those four Fiscal
Periods to Consolidated EBITDA shall be calculated on a PRO
FORMA basis as if it had been a Subsidiary of Micro during all
of those four Fiscal Periods.
L. SECTION 8.2.3(d) is entirely amended as follows:
(d) the Consolidated Tangible Net Worth at the end of
any Fiscal Period to be less than the SUM of (i) 90% of
Consolidated Tangible Net Worth at the end of the Fiscal Year
ending nearest to December 31, 1997, PLUS (ii) 50% of
Consolidated Net Income (without taking into account any
losses incurred in any Fiscal Year) for each Fiscal Year ended
thereafter that ends on or before the last day of that Fiscal
Period.
M. The proviso in SECTION 8.2.4 is entirely amended as follows:
SECOND AMENDMENT
5
; PROVIDED, HOWEVER, THAT, Micro may redeem, purchase
or acquire (a) any of its capital stock (i) issued to
employees pursuant to any Plan or other contract or
arrangement relating to employment upon the termination of
employment or other events or (ii) in a transaction
contemplated by the Transition Agreements and (b) any of its
Indebtedness that is convertible into its securities.
N. The words "such or" are deleted as the 27th and 28th words of
the last sentence of Section 8.2.6.
O. SECTION 8.2.7(a) is entirely amended as follows:
(a) No Borrower may make any Material Asset
Acquisition UNLESS no Event of Default exists or would exist
after giving effect to the proposed Material Asset
Acquisition.
P. SECTION 8.2.9 is amended as follows:
(1) The word "and" is deleted at the end of SECTION
8.2.9(b).
(2) SECTION 8.2.9(c) is entirely amended as follows:
(c) so long as no Event of Default has occurred and
is continuing or would occur after giving effect thereto,
Micro and any Subsidiary of Micro may Dispose of assets in
transactions exclusively among Micro and any of its
Subsidiaries or among Subsidiaries of Micro that satisfy the
requirements of SECTION 8.2.6; PROVIDED THAT, notwithstanding
any provision hereof to the contrary, in the event that,
immediately after giving effect to any Disposition described
in this CLAUSE (c) to a Subsidiary of Micro, such Subsidiary
shall own assets constituting at least ten percent (10%) of
Consolidated Assets determined as of the last day of the most
recently completed Fiscal Period, such Subsidiary of Micro
shall be deemed a Material Subsidiary for all purposes
hereunder as of the date of such Disposition and Micro shall
cause any such Material Subsidiary (UNLESS a Foreign
Subsidiary) promptly to execute and deliver an Additional
Guaranty in favor of the Lender Parties in accordance with
SECTION 8.1.10; and
(3) A new SECTION 8.2.9(d) is added as follows:
(d) subject to SECTION 8.2.8, any Borrower may (and
may permit any of its Subsidiaries to) sell, assign, grant a
Lien in, or otherwise transfer any interest in its Trade
Accounts Receivable and related property such as proceeds and
records.
Q. The last parenthetical phrase in SECTION 9.1.3 that begins with the
word "excluding" is entirely deleted.
R. The last parenthetical in SECTION 9.1.5 is entirely amended as
follows:
(without the giving of further notice or lapse of additional
time)
S. SECTION 11.16(a) is amended by adding the phrase "and the other Loan
Documents" at the end thereof.
SECOND AMENDMENT
6
3. CONDITIONS PRECEDENT. Notwithstanding any contrary provision, PARAGRAPH 2
above is not effective unless and until (A) all principal, interest, fees,
costs, and expenses due under the Credit Agreement (as amended by this
document), all fees payable to either Agent in connection with this document as
agreed to between such Agent and Micro, and all outstanding fees and expenses of
counsel to the Agents are, in each case, paid in full to the extent due and
payable (and, unless an amount is otherwise provided by the Loan Documents and
without waiving the right for subsequent reimbursement in accordance with the
Loan Documents, to the extent that a reasonably detailed invoice is presented to
Micro by September 21, 1998) after giving effect to this document and (B) the
Administrative Agent receives either (i) counterparts of this document duly
executed and delivered by an Authorized Person of each Obligor and by the
Required Lenders or (ii) facsimile, telegraphic, or other written confirmation
of the execution of counterparts of this document.
4. REPRESENTATIONS. To induce the Relevant Required Lenders to enter into this
document, the Borrowers (for themselves and each other Obligor) jointly and
severally represent and warrant to the Agents, the Co-Agents, and the Lenders as
follows:
A. CREDIT AGREEMENT. Each of the representations and warranties of each
Obligor set forth in ARTICLE VII of the Credit Agreement (excluding those
contained in SECTION 7.8) is true and correct as though made on and as of the
date of this document (unless stated to relate solely to an earlier date, in
which case, such representations and warranties were true and correct as of such
earlier date) with each reference in those representations to "this Agreement,"
the "Loan Documents," "hereof," "hereunder," "thereof," "thereunder," and words
of like import being, for purposes of this clause, references to the Credit
Agreement and the Loan Documents, in each case as amended or waived by this
document.
B. ENFORCEABILITY. Upon execution and delivery by the Obligors and the
Required Lenders, this document will constitute a valid and binding agreement of
each Obligor, enforceable against it in accordance with this document's terms
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, or other similar laws relating to or limiting creditors' rights
generally or by general principles of equity.
C. OBLIGORS. As of the date of, and after giving effect to, this
document, the only Obligors under the Credit Agreement and Loan Documents are
Micro; Coordination Center; Micro Canada; Ingram Micro Holdings Limited, a
corporation organized and existing under the laws of the United Kingdom; and
Ingram Micro (UK) Limited, a corporation organized and existing under the laws
of the United Kingdom.
5. RATIFICATIONS. To induce the Relevant Required Lenders to enter into this
document each Borrower (and, by its execution below, each other Obligor) (A)
ratifies and confirms all provisions of the Credit Agreement and other Loan
Documents to which it is a party, as amended or waived by this document, and (B)
ratifies and confirms that all guaranties granted in favor of any of the Agents
or the Lenders under the Loan Documents (as they may have been renewed,
extended, amended, or supplemented) are not released, reduced, or otherwise
adversely affected by this document, or any other Loan Document, and continue to
guarantee full payment and performance of the present and future Obligations.
SECOND AMENDMENT
7
6. MISCELLANEOUS.
A. CREDIT AGREEMENT AND LOAN DOCUMENTS. Upon the effectiveness of
PARAGRAPH 2 above as provided in PARAGRAPH 3 above, all references in the Loan
Documents to the "Credit Agreement" refer to the Credit Agreement as amended and
waived by this document. This document is a "Loan Document" referred to in the
Credit Agreement, and the provisions relating to Loan Documents in ARTICLES I
and XI are incorporated in this document by reference. Except as specifically
amended, modified, and waived in this document, the Credit Agreement is
unchanged and continues in full force and effect, and this document is not
otherwise a waiver of any right, power, or remedy of any Agent, Co-Agent, or
Lender under, or waiver of any provision of, any Loan Document. No change or
waiver of any provision of this document is valid unless in a writing that is
signed by the party against whom it is sought to be enforced.
B. GOVERNING LAW. This document shall be deemed to be a contract made
under and governed by the laws of the State of New York, United States of
America.
C. COUNTERPARTS. This document may be executed in any number of
counterparts with the same effect as if all signatories had signed the same
document. All counterparts shall be construed together to constitute one and the
same document.
[REMAINDER OF PAGE INTENTIONALLY BLANK. THIS PAGE IS FOLLOWED BY A
SIGNATURE PAGE FOR THE OBLIGORS FOLLOWED BY SEPARATE SIGNATURE
PAGES FOR THE RELEVANT REQUIRED LENDERS.]
SECOND AMENDMENT
8
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
INGRAM MICRO INC., as a Borrower INGRAM EUROPEAN COORDINATION CENTER N.V.,
as a Supplemental Borrower
By /s/ James F. Ricketts By /s/ Michael J. Grainger
--------------------------------- -----------------------------------
James F. Ricketts, Vice President Michael J. Grainger, Authorized
and Worldwide Treasurer Representative
INGRAM MICRO INC., as a Supplemental Borrower
By /s/ Michael J. Grainger
--------------------------------
Michael J. Grainger,
Authorized Representative
The undersigned Obligors consent and agree in all respects to PARAGRAPH
6 and all other provisions of the foregoing Second Amendment to Credit Agreement
as Obligors under the Credit Agreement and all related Loan Documents.
INGRAM MICRO HOLDINGS LTD., INGRAM MICRO (UK) LTD.,
as an Obligor as an Obligor
By /s/ Stephen Gill By /s/ Stephen Gill
--------------------------------- -----------------------------------
Name: Stephen Gill Name: Stephen Gill
Title: VP, Finance & CFO Europe Title: VP, Finance & CFO Europe
9
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
NATIONSBANK, N.A. (successor in interest
by merger with NationsBank of Texas,
N.A.), as the Administrative Agent and as
a Lender
By /s/ Yousuf Omar
---------------------------------------
Yousuf Omar, Senior Vice President
10
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
THE BANK OF NOVA SCOTIA, as the
Documentation Agent and as a Lender
By /s/ Edward J. Kofman
---------------------------------------
Name: Edward J. Kofman
Title: Relationship Manager
11
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
THE CHASE MANHATTAN BANK, as a Co-Agent
and as a Lender
By /s/ Karen M. Sharf
---------------------------------------
Name: Karen M. Sharf
Title: Vice President
12
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLANDS BRANCH, as a Co-Agent and
as a Lender
By /s/ J. W. Somers
--------------------------------------
Name: J. W. Somers
Title: S.V.P. and Manager
By /s/ Bobby Ryan Oliver, Jr.
--------------------------------------
Name: Bobby Ryan Oliver, Jr.
Title: Vice President
13
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
ATLANTA AGENCY, as a Co-Agent and as a
Lender
By /s/ Koichi Hasegawa
--------------------------------------
Name: Koichi Hasegawa
Title: Senior Vice President and
Deputy General Manager
14
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
ROYAL BANK OF CANADA, as Co-Agent and as
a Lender
By /s/ Robert K. Mimaki
--------------------------------------
Name: Robert K. Mimaki
Title: Manager
15
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
THE FUJI BANK, LIMITED, LOS ANGELES
AGENCY, as a Lender
By /s/ Masahito Fukuda
--------------------------------------
Name: Masahito Fukuda
Title: Joint General Manager
16
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION, as a Lender
By /s/ Brian K. Chin
--------------------------------------
Name: Brian K. Chin
Title: Vice President
17
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
BANKERS TRUST COMPANY, as a Lender
By /s/ Robert R. Telesca
--------------------------------------
Name: Robert R. Telesca
Title: Assistant Vice President
18
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
THE DAI-ICHI KANGYO BANK, LTD., LOS
ANGELES AGENCY, as a Lender
By /s/ Masatsugu Morishita
--------------------------------------
Name: Masatsugu Morishita
Title: Sr. Vice President and
Joint General Manager
19
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
THE SAKURA BANK, LIMITED, as a Lender
By /s/ Yasumasa Kikuchi
--------------------------------------
Name: Yasumasa Kikuchi
Title: Senior Vice President
20
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
THE FIRST NATIONAL BANK OF CHICAGO, as a
Co-Agent and as a Lender
By /s/ Mark A. Isley
--------------------------------------
Name: Mark A. Isley
Title: First Vice President
21
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
COMMERZBANK AKTIENGESELLSCHAFT LOS
ANGELES BRANCH, as a Lender
By /s/ Christian Jagenberg
--------------------------------------
Name: Christian Jagenberg
Title: SVP and Manager
By /s/ John Korthuis
--------------------------------------
Name: John Korthuis
Title: Vice President
22
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
THE MITSUBISHI TRUST AND BANKING
CORPORATION, LOS ANGELES AGENCY, as a
Lender
By /s/ Yasushi Satomi
--------------------------------------
Name: Yasushi Satomi
Title: Senior Vice President
23
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
ABN-AMRO BANK N.V., as a Lender
By /s/ Paul K. Stimpel
--------------------------------------
Name: Paul K. Stimpel
Title: Group Vice President
By /s/ Shikha Rehman
--------------------------------------
Name: Shikha Rehman
Title: Vice President
24
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
BANCA COMMERCIALE ITALIANA, LOS ANGELES
FOREIGN BRANCH, as a Lender
By /s/ Richard E. Iwanicki
--------------------------------------
Name: Richard E. Iwanicki
Title: Vice President
By /s/ E. Bombieri
--------------------------------------
Name: E. Bombieri
Title: Vice President & Manager
25
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
BANQUE NATIONALE DE PARIS, as a Lender
By /s/ Tjalling Terpstra
--------------------------------------
Name: Tjalling Terpstra
Title: Vice President
By /s/ Debbie Gohh
--------------------------------------
Name: Debbie Gohh
Title: Vice President
26
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
COMERICA BANK, as a Lender
By /s/ Emmanuel M. Skevofilax
--------------------------------------
Name: Emmanuel M. Skevofilax
Title: Assistant Vice President
27
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
DEN DANSKE BANK AKTIESELSKAB CAYMAN
ISLANDS BRANCH, as a Lender
By /s/ Daniel F. Lenzo
--------------------------------------
Name: Daniel F. Lenzo
Title: Vice President
By /s/ Henrik Ibsen
--------------------------------------
Name: Henrik Ibsen
Title: Vice President
28
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES, as a Lender
By /s/ Stephan A. Wiedemann
--------------------------------------
Name: Stephan A. Wiedemann
Title: Director
By /s/ Hans-Josef Thiele
--------------------------------------
Name: Hans-Josef Thiele
Title: Director
29
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
FIRST AMERICAN NATIONAL BANK, as a Lender
By /s/ Stephan Arnold
--------------------------------------
Name: Stephan Arnold
Title: V.P.
30
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
GENERALE BANK, S.A./N.V., as a Lender
By /s/ Hans Neukomm
--------------------------------------
Name: Hans Neukomm
Title: General Manager
By /s/ Simon Del Rosario
--------------------------------------
Name: Simon Del Rosario
Title: Senior Vice President
31
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
KBC BANK N.V., as a Lender
By /s/ Raymond F. Murray
--------------------------------------
Name: Raymond F. Murray
Title: Vice President
By /s/ Marcel Claes
--------------------------------------
Name: Marcel Claes
Title: Deputy General Manager
32
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
THE SANWA BANK, LIMITED LOS ANGELES
BRANCH, as a Lender
By_______________________________________
Name:__________________________________
Title:_________________________________
33
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
SUNTRUST BANK, ATLANTA, as a Lender
By /s/ Richard A. Anderson, Jr.
--------------------------------------
Name: Richard A. Anderson, Jr.
Title: Vice President
34
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
US BANK NATIONAL ASSOCIATION, as a Lender
By /s/ Aaron J. Gordon
--------------------------------------
Name: Aaron J. Gordon
Title: Vice President
35
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
BANCA DI ROMA, SAN FRANCISCO FOREIGN
BRANCH, as a Lender
By /s/ Richard G. Dietz
--------------------------------------
Name: Richard G. Dietz
Title: Vice President
By /s/ Thomas C. Woodruff
--------------------------------------
Name: Thomas C. Woodruff
Title: Vice President
36
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
BANCO CENTRAL HISPANOAMERICANO, S.A., as
a Lender
By /s/ Louis Ferreira
--------------------------------------
Name: Louis Ferreira
Title: Vice President
37
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
ISTITUTO BANCARIO SAN PAOLO DI TORINO
S.P.A., as a Lender
By /s/ Robert Wurster
--------------------------------------
Name: Robert Wurster
Title: 1st V.P.
By /s/ Gerard McKenna
--------------------------------------
Name: Gerard McKenna
Title: V.P.
38
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as a Lender
By /s/ John M. Mikolay
--------------------------------------
Name: John M. Mikolay
Title: Vice President
39
EXECUTED as of the date first stated in this Second Amendment to Credit
Agreement.
THE YASUDA TRUST AND BANKING CO. LTD., as
a Lender
By /s/ Junichiro Kawamura
--------------------------------------
Name: Junichiro Kawamura
Title: Vice President
1
EXHIBIT 10.41
FIRST AMENDMENT TO EUROPEAN CREDIT AGREEMENT
dated as of September 25, 1998,
among
INGRAM MICRO INC., and
INGRAM EUROPEAN COORDINATION CENTER N.V.,
as the Primary Borrowers and Guarantors, and
CERTAIN FINANCIAL INSTITUTIONS,
as the Relevant Required Lenders
amending the US $500,000,000
EUROPEAN CREDIT AGREEMENT
dated as of October 28, 1997,
also among
INGRAM MICRO INC., and
INGRAM EUROPEAN COORDINATION CENTER N.V.,
as the Primary Borrowers and Guarantors,
CERTAIN FINANCIAL INSTITUTIONS,
as the Lenders,
THE BANK OF NOVA SCOTIA,
as Administrative Agent for the Lenders,
and
NATIONSBANK, N.A.
(successor in interest by merger to NationsBank of Texas, N.A.),
as Documentation Agent for the Lenders,
as arranged by
THE BANK OF NOVA SCOTIA and
NATIONSBANC CAPITAL MARKETS, INC.,
as the Arrangers
PREPARED BY HAYNES AND BOONE, L.L.P.
2
FIRST AMENDMENT TO EUROPEAN CREDIT AGREEMENT
THIS DOCUMENT is entered into as of September 25, 1998, among:
INGRAM MICRO INC., a corporation organized and existing under the laws
of the State of Delaware, United States of America ("MICRO");
INGRAM EUROPEAN COORDINATION CENTER N.V., a company organized and
existing under the laws of The Kingdom of Belgium ("COORDINATION
CENTER," and collectively with Micro, the "PRIMARY BORROWERS"); and
The financial institutions executing this document as Lenders (the
"RELEVANT REQUIRED LENDERS").
(see PARAGRAPH 1 below regarding defined terms)
This document is being executed and delivered to amend certain
provisions of the European Credit Agreement (as renewed, extended, amended, or
supplemented, the "CREDIT AGREEMENT") dated as of October 28, 1997, among (a)
the Primary Borrowers; (b) certain Lenders (which includes the Relevant Required
Lenders); and (c) The Bank of Nova Scotia ("SCOTIABANK"), as administrative
agent for the Lenders (in such capacity, the "ADMINISTRATIVE AGENT"), and
NationsBank, N.A. (successor in interest by merger to NationsBank of Texas,
N.A.) ("NATIONSBANK"), as documentation agent for the Lenders (in such capacity,
the "DOCUMENTATION AGENT"), both of which are collectively the "AGENTS".
Effective December 22, 1997, Micro Singapore ceased to be a Subsidiary of Micro,
and effective January 15, 1998, in accordance with SECTION 11.16 of the Credit
Agreement, Micro Singapore ceased to be a Supplemental Borrower and a Guarantor
under the Credit Agreement.
The Relevant Required Lenders have agreed, upon and subject to the
terms and conditions of this document, to alter the terms of the Credit
Agreement as provided below.
ACCORDINGLY, for adequate and sufficient consideration, the Borrowers
and the Relevant Required Lenders agree as follows:
1. TERMS AND REFERENCES. Unless otherwise stated in this document, terms defined
in the Credit Agreement have the same meanings when used in this document and
references to "ARTICLES," "SECTIONS," "SCHEDULES," and "EXHIBITS" are to the
Credit Agreement's articles, sections, schedules, and exhibits.
2. AMENDMENTS. Subject to PARAGRAPH 3 but otherwise effective as of the date of
this document, the Credit Agreement is amended as follows:
A. SECTION 1.1 is amended by adding or entirely amending, as the case
may be, the following defined terms in alphabetical order with all other defined
terms in that section:
"ACQUIRED EXISTING DEBT AND LIENS" means, for a
period of 90 days following the acquisition or merger of a
Person by or into Micro or any of its Subsidiaries or the
acquisition of a business unit of a Person or the assets of a
Person or business unit of a Person by Micro or any of its
Subsidiaries, the Indebtedness and Liens of that Person or
business unit that (a) were not incurred in connection with
that acquisition or merger and do not constitute any
refinancing of Indebtedness so incurred and (b) were in
existence at the time of that acquisition or merger.
3
"ADDITIONAL PERMITTED LIENS" means, as of any date
(a) Liens securing Indebtedness and not described in CLAUSES
(a) through (l) of SECTION 8.2.2, but only to the extent that
(i) the Amount of Additional Liens on that date does not
exceed twenty percent (20%) of Consolidated Tangible Net Worth
on that date and (ii) Borrowers are otherwise in compliance
with SECTION 8.2.1(b), and (b) Liens constituting Acquired
Existing Debt and Liens on that date.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not
domiciled in the United States.
"MICRO SINGAPORE" is defined in the preamble but is
no longer party to any Loan Document.
"SENIOR CONSOLIDATED FUNDED DEBT" means, as of any
date of determination, the total of all Consolidated Funded
Debt of Micro and its Consolidated Subsidiaries outstanding on
such date that ranks PARI PASSU with the Obligations.
B. The definition of "Material Asset Acquisition" in SECTION 1.1 is
amended to add the words "or 8.2.9(d)" at the end of it.
C. In the definition of "Total Indebtedness of Subsidiaries" in SECTION
1.1 (i) the word "and" before CLAUSE (b) is replaced with a comma and (ii) a new
CLAUSE (c) is added as follows:
, and (c) any Indebtedness under any Loan Document (as defined
in this Agreement, the Canadian Credit Agreement, and the U.S.
Credit Agreement).
D. SECTION 1.1 is amended by entirely deleting the definitions of the
terms "Consolidated Current Assets," "Consolidated Current Liabilities," and
"Consolidated Current Ratio".
E. SECTION 6.3.3 is amended by adding the parenthetical "(OTHER THAN a
Foreign Subsidiary)" after the 18th and 19th words "Material Subsidiary" in that
section.
F. A new SECTION 7.18 is added as follows:
SECTION 7.18 YEAR 2000. Micro believes that its
computer applications that are material to its business and
operations will be able to perform properly date-sensitive
functions for all dates on and after January 1, 2000, EXCEPT
to the extent that a failure to do so would not reasonably be
expected to have a Material Adverse Effect.
G. SECTION 8.1.10 is amended by adding the parenthetical "(OTHER THAN
Foreign Subsidiaries)" after the 9th word "Subsidiaries" in CLAUSE (c) of that
section.
H. SECTION 8.2.1(b) is entirely amended as follows:
(b) Micro will not at the end of any Fiscal Period
permit (i) Total Indebtedness of Subsidiaries (OTHER THAN
Indebtedness of any Guarantor and Indebtedness constituting
Acquired Existing Debt and Liens) to exceed twenty percent
(20%) of Consolidated Tangible Net Worth, or (ii) SECTION
8.2.2(m) to be violated.
FIRST AMENDMENT
4
I. SECTIONS 8.2.2(k) and (l) are entirely amended as follows:
(k) Liens of the nature referred to in CLAUSE (b) of
the definition of the term "LIEN" and granted to a purchaser
or any assignee of such purchaser which has financed the
relevant purchase of Trade Accounts Receivable of any Borrower
or any of their respective subsidiaries and Liens on any
related property that would ordinarily be subject to a Lien in
connection therewith such as proceeds and records;
(l) Liens on accounts receivable of Micro Canada with
respect to any accounts receivable securitization program and
on any related property that would ordinarily be subject to a
Lien in connection therewith such as proceeds and records; and
J. SECTION 8.2.3(a) is entirely amended as follows:
(a) [INTENTIONALLY BLANK]
K. SECTION 8.2.3(c) is entirely amended as follows:
(c) (i) the ratio of (A) the average daily balances
of Senior Consolidated Funded Debt during any Fiscal Period to
(B) Consolidated EBITDA for the period of four Fiscal Periods
ending on the last day of such Fiscal Period to exceed 3.5 to
1.0; and (ii) the ratio of (A) the average daily balances of
Consolidated Funded Debt during any Fiscal Period (B) to
Consolidated EBITDA for the period of four Fiscal Periods
ending on the last day of such Fiscal Period to exceed 4.0 to
1.0;
PROVIDED THAT, for purposes of calculating the preceding
ratios (A) Consolidated Funded Debt on any day shall be the
amount otherwise determined pursuant to the definition thereof
plus the amount of Consolidated Transferred Receivables on
such day, and (B) the contribution of any Subsidiary of Micro
acquired (to the extent the acquisition is treated for
accounting purposes as a purchase) during those four Fiscal
Periods to Consolidated EBITDA shall be calculated on a PRO
FORMA basis as if it had been a Subsidiary of Micro during all
of those four Fiscal Periods.
L. SECTION 8.2.3(d) is entirely amended as follows:
(d) the Consolidated Tangible Net Worth at the end of
any Fiscal Period to be less than the SUM of (i) 90% of
Consolidated Tangible Net Worth at the end of the Fiscal Year
ending nearest to December 31, 1997, PLUS (ii) 50% of
Consolidated Net Income (without taking into account any
losses incurred in any Fiscal Year) for each Fiscal Year ended
thereafter that ends on or before the last day of that Fiscal
Period.
M. The proviso in SECTION 8.2.4 is entirely amended as follows:
; PROVIDED, HOWEVER, THAT, Micro may redeem, purchase
or acquire (a) any of its capital stock (i) issued to
employees pursuant to any Plan or other contract or
arrangement relating to employment upon the termination of
employment or other events or (ii) in a transaction
contemplated by the Transition Agreements and (b) any of its
Indebtedness that is convertible into its securities.
FIRST AMENDMENT
5
N. The words "such or" are deleted as the 27th and 28th words of
the last sentence of Section 8.2.6.
O. SECTION 8.2.7(a) is entirely amended as follows:
(a) No Borrower may make any Material Asset
Acquisition UNLESS no Event of Default exists or would exist
after giving effect to the proposed Material Asset
Acquisition.
P. SECTION 8.2.9 is amended as follows:
(1) The word "and" is deleted at the end of SECTION 8.2.9(b).
(2) SECTION 8.2.9(c) is entirely amended as follows:
(c) so long as no Event of Default has occurred and
is continuing or would occur after giving effect thereto,
Micro and any Subsidiary of Micro may Dispose of assets in
transactions exclusively among Micro and any of its
Subsidiaries or among Subsidiaries of Micro that satisfy the
requirements of SECTION 8.2.6; PROVIDED THAT, notwithstanding
any provision hereof to the contrary, in the event that,
immediately after giving effect to any Disposition described
in this CLAUSE (c) to a Subsidiary of Micro, such Subsidiary
shall own assets constituting at least ten percent (10%) of
Consolidated Assets determined as of the last day of the most
recently completed Fiscal Period, such Subsidiary of Micro
shall be deemed a Material Subsidiary for all purposes
hereunder as of the date of such Disposition and Micro shall
cause any such Material Subsidiary (UNLESS a Foreign
Subsidiary) promptly to execute and deliver an Additional
Guaranty in favor of the Lender Parties in accordance with
SECTION 8.1.10; and
(3) A new SECTION 8.2.9(d) is added as follows:
(d) subject to SECTION 8.2.8, any Borrower may (and
may permit any of its Subsidiaries to) sell, assign, grant a
Lien in, or otherwise transfer any interest in its Trade
Accounts Receivable and related property such as proceeds and
records.
Q. The last parenthetical phrase in SECTION 9.1.3 that begins with the
word "excluding" is entirely deleted.
R. The last parenthetical in SECTION 9.1.5 is entirely amended as
follows:
(without the giving of further notice or lapse of additional
time)
S. SECTION 11.16(a) is amended by adding the phrase "and the other Loan
Documents" at the end thereof.
FIRST AMENDMENT
6
I. CONDITIONS PRECEDENT. Notwithstanding any contrary provision, PARAGRAPH 2
above is not effective unless and until (A) all principal, interest, fees,
costs, and expenses due under the Credit Agreement (as amended by this
document), all fees payable to either Agent in connection with this document as
agreed to between such Agent and Micro, and all outstanding fees and expenses of
counsel to the Agents are, in each case, paid in full to the extent due and
payable (and, unless an amount is otherwise provided by the Loan Documents and
without waiving the right for subsequent reimbursement in accordance with the
Loan Documents, to the extent that a reasonably detailed invoice is presented to
Micro by September 21, 1998) after giving effect to this document and (B) the
Administrative Agent receives either (i) counterparts of this document duly
executed and delivered by an Authorized Person of each Obligor and by the
Required Lenders or (ii) facsimile, telegraphic, or other written confirmation
of the execution of counterparts of this document.
I. REPRESENTATIONS. To induce the Relevant Required Lenders to enter into this
document, the Borrowers (for themselves and each other Obligor) jointly and
severally represent and warrant to the Agents and the Lenders as follows:
A. CREDIT AGREEMENT. Each of the representations and warranties of each
Obligor set forth in ARTICLE VII of the Credit Agreement (excluding those
contained in SECTION 7.8) is true and correct as though made on and as of the
date of this document (unless stated to relate solely to an earlier date, in
which case, such representations and warranties were true and correct as of such
earlier date) with each reference in those representations to "this Agreement,"
the "Loan Documents," "hereof," "hereunder," "thereof," "thereunder," and words
of like import being, for purposes of this clause, references to the Credit
Agreement and the Loan Documents, in each case as amended or waived by this
document.
B. ENFORCEABILITY. Upon execution and delivery by the Obligors and the
Required Lenders, this document will constitute a valid and binding agreement of
each Obligor, enforceable against it in accordance with this document's terms
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, or other similar laws relating to or limiting creditors' rights
generally or by general principles of equity.
C. OBLIGORS. As of the date of, and after giving effect to, this
document, the only Obligors under the Credit Agreement and Loan Documents are
Micro; Coordination Center; Ingram Micro, Inc., a corporation organized and
existing under the laws of the Province of Ontario, Canada; Ingram Micro
Holdings Limited, a corporation organized and existing under the laws of the
United Kingdom; and Ingram Micro (UK) Limited, a corporation organized and
existing under the laws of the United Kingdom.
I. RATIFICATIONS. To induce the Relevant Required Lenders to enter into this
document each Borrower (and, by its execution below, each other Obligor) (A)
ratifies and confirms all provisions of the Credit Agreement and other Loan
Documents to which it is a party, as amended or waived by this document, and (B)
ratifies and confirms that all guaranties granted in favor of any of the Agents
or the Lenders under the Loan Documents (as they may have been renewed,
extended, amended, or supplemented) are not released, reduced, or otherwise
adversely affected by this document, or any other Loan Document, and continue to
guarantee full payment and performance of the present and future Obligations.
FIRST AMENDMENT
7
I. MISCELLANEOUS.
A. CREDIT AGREEMENT AND LOAN DOCUMENTS. Upon the effectiveness of
PARAGRAPH 2 above as provided in PARAGRAPH 3 above, all references in the Loan
Documents to the "Credit Agreement" refer to the Credit Agreement as amended by
this document. This document is a "Loan Document" referred to in the Credit
Agreement, and the provisions relating to Loan Documents in ARTICLES I and IX
are incorporated in this document by reference. Except as specifically amended
and modified in this document, the Credit Agreement is unchanged and continues
in full force and effect. No change or waiver of any provision of this document
is valid unless in a writing that is signed by the party against whom it is
sought to be enforced.
B. GOVERNING LAW. This document shall be deemed to be a contract made
under and governed by English laws.
C. COUNTERPARTS. This document may be executed in any number of
counterparts with the same effect as if all signatories had signed the same
document. All counterparts shall be construed together to constitute one and the
same document.
REMAINDER OF PAGE INTENTIONALLY BLANK. THIS PAGE IS
FOLLOWED BY A SIGNATURE PAGE FOR THE OBLIGORS, FOLLOWED BY SEPARATE
SIGNATURE PAGES FOR THE RELEVANT REQUIRED LENDERS.
FIRST AMENDMENT
8
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INGRAM MICRO INC., as a Primary INGRAM EUROPEAN COORDINATION
Borrower and a Guarantor CENTER N.V., as a Primary Borrower
and a Guarantor
By /s/ James F. Ricketts By /s/ Michael J. Grainger
------------------------------- -------------------------------
James F. Ricketts, Vice Michael J. Grainger, Authorized
President & Worldwide Treasurer Representative
ADDRESS: 1600 E. St. Andrew Place ADDRESS: Luchthavenlaan 25A
Santa Ana, CA 92705 B-1800 Vilvoorde
Belgium
FACSIMILE NO.: 714-566-7873 FACSIMILE NO.: 011-32-2-254-9290
ATTENTION: James F. Ricketts ATTENTION: Stephen Gill
The undersigned Obligors consent and agree in all respects to PARAGRAPH
5 and all other provisions of the foregoing First Amendment to European Credit
Agreement as Obligors under the European Credit Agreement and all related Loan
Documents.
INGRAM MICRO HOLDINGS LTD., INGRAM MICRO INC.,
as an Obligor an Ontario, Canada corporation, as an
Obligor
By /s/ Stephen Gill By /s/ Michael J. Grainer
------------------------------- -------------------------------
Name: Stephen Gill Michael J. Grainger, Attorney
Title: VP, Finance & CFO Europe
ADDRESS: Ingram House ADDRESS: 230 Barmac Drive
Garamonde Drive Weston, Ontario
Wymbush Canada, M9L 2Z3
Milton Keynes
Bucks MK8 8DF
FACSIMILE NO.: 011-32-2-254-9290 FACSIMILE NO.: 416-740-8623
ATTENTION: Stephen Gill ATTENTION: Robert E. Carbrey
9
INGRAM MICRO (UK) LTD.,
as an Obligor
By /s/ Stephen Gill
-------------------------------
Name: Stephen Gill
Title: VP, Finance & CFO Europe
ADDRESS: Ingram House
Garamonde Drive
Wymbush
Milton Keynes
Bucks MK8 8DF
FACSIMILE NO.: 011-32-2-254-9290
ATTENTION: Stephen Gill
10
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
THE BANK OF NOVA SCOTIA, as the
Administrative Agent
By /s/ O.M. McMahon
--------------------------------------
O.M. McMahon, Manager
ADDRESS FOR NOTICES:
Scotia House
33 Finsbury Square
London, England EC2A 1BB
FACSIMILE NO.: 011-44-171-826-5857
ATTENTION: Marian Staples
ADDRESS FOR PAYMENT OF FEES:
Scotia House
33 Finsbury Square
London, England EC2A 1BB
FACSIMILE NO.: 011-44-171-826-5857
ATTENTION: Marian Staples
11
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
8.5% $42,500,000 SCOTIABANK EUROPE PLC, (formerly named
in the Credit Agreement as The Bank of
Nova Scotia) as a Lender
By /s/ Yousuf Omar
Name: Yousuf Omar
Title: Senior Vice President
LENDING OFFICE FOR OTHER ADDRESS FOR NOTICES:
LOANS:
Scotia House Scotia House
33 Finsbury Square 33 Finsbury Square
London, England EC2A 1BB London, England EC2A 1BB
FACSIMILE NO.: 011-44-171-826-5617 FACSIMILE NO.: 011-44-171-826-5617
ATTENTION: David Sparks ATTENTION: Managing Director
LENDING OFFICE FOR LOANS ADDRESS FOR PAYMENT OF FEES:
TO MICRO:
Scotia House
Scotia House 33 Finsbury Square
33 Finsbury Square London, England EC2A 1BB
London, England EC2A 1BB
FACSIMILE NO.: 011-44-171-826-5617
FACSIMILE NO.: 011-44-171-826-5617
ATTENTION: David Sparks
ATTENTION: David Sparks
FIRST AMENDMENT
12
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
8.5% $42,500,000
NATIONSBANK OF TEXAS, N.A., as the
Documentation Agent and as a Lender
By_______________________________________
Name:__________________________________
Title:_________________________________
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
901 Main Street New Broad Street House
13th Floor 35 New Broad Street
Dallas, TX 75202 London, England EC2M 1NH
FACSIMILE NO.: 214-508-2515 FACSIMILE NO.: 011-44-171-282-6831
ATTENTION: Agency Services ATTENTION: 011-44-171-282-6831
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
New Broad Street House New Broad Street House
35 New Broad Street 35 New Broad Street
London, England EC2M 1NH London, England EC2M 1NH
FACSIMILE NO.: 011-44-171-282-6831 FACSIMILE NO.: 011-44-171-282-6831
ATTENTION: Melanie Harries ATTENTION: Melanie Harries
FIRST AMENDMENT
13
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
5.0% $25,000,000 BANCO SANTANDER, as a Lender
By_______________________________________
Name:__________________________________
Title:_________________________________
By_______________________________________
Name:__________________________________
Title:_________________________________
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Banco Santander, New York Branch Banco Santander, New York Branch
45 East 53rd Street 45 East 53rd Street
New York, NY 10022 New York, NY 10022
FACSIMILE NO.: 212-350-3690 FACSIMILE NO.: 212-350-3647 212-350-3690
ATTENTION: Ligia Castro ATTENTION: Ligia Castro/Dom Rodriguez
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Banco Santander, New York Branch Banco Santander, New York Branch
45 East 53rd Street 45 East 53rd Street
New York, NY 10022 New York, NY 10022
FACSIMILE NO.: 212-350-3690 FACSIMILE NO.: 212-350-3690
ATTENTION: Ligia Castro ATTENTION: Ligia Castro
FIRST AMENDMENT
14
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
5.0% $25,000,000 BANK OF AMERICA NT & SA, as a Lender
By /s/ Brian K. Chin
--------------------------------------
Name: Brian K. Chin
Title: Vice President
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
1850 Gateway Blvd. Henrijean House
Concord, CA 94520 Uitbreidingstraat 180, B-6
2600 Antwerp
FACSIMILE NO.: 510-675-7531 Belgium
ATTENTION: Ms. Shareen Watson FACSIMILE NO.: 011-323-280-4296
ATTENTION: Jos Sprenghers
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Henrijean House Henrijean House
Uitbreidingstraat 180, B-6 Uitbreidingstraat 180, B-6
2600 Antwerp 2600 Antwerp
Belgium Belgium
FACSIMILE NO.: 011-323-280-4296 FACSIMILE NO.: 011-323-280-4296
ATTENTION: Jos Sprenghers ATTENTION: Jos Sprenghers
FIRST AMENDMENT
15
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
5.0% $25,000,000
COMMERZBANK AKTIENGESELLSCHAFT,
BRUSSELS BRANCH, as a Lender
By_______________________________________
Name:__________________________________
Title:_________________________________
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Commerzbank Aktiengesellschaft, Commerzbank Aktiengesellschaft,
Brussels Branch Brussels Branch
Boulevard Louis Schmidt 87 Boulevard Louis Schmidt 87
B-1040, Brussels B-1040, Brussels
FACSIMILE NO.: 32-0-27-43-1911 FACSIMILE NO.: 32-0-27-43-1911
ATTENTION: Erik Kennis ATTENTION: Erik Kennis
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Commerzbank Aktiengesellschaft, Commerzbank Aktiengesellschaft,
Brussels Branch Brussels Branch
Boulevard Louis Schmidt 87 Boulevard Louis Schmidt 87
B-1040, Brussels B-1040, Brussels
FACSIMILE NO.: 32-0-27-43-1911 FACSIMILE NO.: 32-0-27-43-1911
ATTENTION: Erik Kennis ATTENTION: Erik Kennis
FIRST AMENDMENT
16
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
5% $25,000,000
DEUTSCHE BANK AG, MUNICH BRANCH, as a
Lender
By /s/ Thomas H. Hierholzer
--------------------------------------
Name: Thomas H. Hierholzer
Title: Vice President
By /s/ Joachim Mehlert
--------------------------------------
Name: Joachim Mehlert
Title: Assistant Vice President
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Foreign Department Corporations and Institutions
Riesstr. 25 Riesstr. 25
80992 Munich 80992 Munich
Germany Germany
FACSIMILE NO.: 0049-89-2390-2039 FACSIMILE NO.: 0049-89-2390-1383
ATTENTION: Mr. Bernhard Kieninger ATTENTION: Mr. Kieninger
Ms. Schaubeck
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Corporations and Institutions Deutsche Bank AG, Munich Branch
Riesstr. 25 Account-No.: 0052902
80992 Munich Bank-Code: 70070010
Germany Swift: DEUT DE MM
Purpose: Kostenstelle 22 484 000,
FACSIMILE NO.: 0049-89-2390-1383 Ingram Micro Inc.
ATTENTION: Mr. Keininger FACSIMILE NO.: 0049-89-2390-1383
Ms. Schaubeck
ATTENTION: Mr. Kieninger
Ms. Schaubeck
FIRST AMENDMENT
17
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
5.0% $25,000,000 THE INDUSTRIAL BANK OF JAPAN, LIMITED,
ATLANTA AGENCY, as a Lender
By /s/ Koichi Hasegawa
--------------------------------------
Name: Koichi Hasegawa
Title: Deputy General Manager
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
The Industrial Bank of Japan, Limited The Industrial Bank of Japan, Limited
Atlanta Agency Atlanta Agency
One Ninety One Peachtree Tower One Ninety One Peachtree Tower
Suite 3600 Suite 3600
191 Peachtree Street N.E. 191 Peachtree Street N.E.
Atlanta, GA 30303-1757 Atlanta, GA 30303-1757
FACSIMILE NO.: 404-577-6818/
404-524-8509
FACSIMILE NO.: 404-577-6818/
404-524-8509 ATTENTION: Minami Miura/
James Masters
ATTENTION: Minami Miura/
James Masters The Industrial Bank of Japan, Limited
London Branch
Bracken House
One Friday Street
London EC4M 9JA
FACSIMILE NO.: 0171-248-1114
ATTENTION: Ms. Mary Roe/Maurice
Fitzgerald
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
The Industrial Bank of Japan, Limited The Industrial Bank of Japan, Limited
London Branch Atlanta Agency
Bracken House One Ninety One Peachtree Tower
One Friday Street Suite 3600
London EC4M 9JA 191 Peachtree Street N.E.
Atlanta, GA 30303-1757
FACSIMILE NO.: 0171-248-1114
FACSIMILE NO.: 404-577-6818
ATTENTION: Ms. Mary Roe
ATTENTION: Minami Miura
FIRST AMENDMENT
18
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
5.0% $25,000,000 KBC BANK N.V. (formerly Kredietbank
N.V.), as a Lender
By /s/ Guido Segers
--------------------------------------
Name: Guido Segers
Title: Deputy Regional Manager
By /s/ Hilde Tahon
--------------------------------------
Name: Hilde Tahon
Title: Deputy Credit Manager
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
KBC Bank N.V. KBC Bank N.V.
with principal office: Diegem Corporate Branch
Arenbergstraat 7 Oude Haachtsesteenweg 105
B-1000 Brussel B-1831 Diegem
FACSIMILE NO.: 32-2-546-4920 FACSIMILE NO.: 32-2-725-72-02
TELEPHONE NO.: 32-2-546-4186 TELEPHONE NO.: 32-2-716-51-76
ATTENTION: 8244 Accounting and ATTENTION: Mr. P. Van den Poel
Reporting
Carine Wuestenberg,
Rita Wolfs
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
KBC Bank N.V. KBC Bank N.V.
with principal office: with principal office:
Arenbergstraat 7 Arenbergstraat 7
B-1000 Brussel B-1000 Brussel
FACSIMILE NO.: 32-2-546-4920 FACSIMILE NO.: 32-2-546-4920
TELEPHONE NO.: 32-2-546-4186 TELEPHONE NO.: 32-2-546-4186
ATTENTION: 8244 Accounting and ATTENTION: 8244 Accounting and Reporting
Reporting Carine Wuestenberg, Rita Wolfs
Carine Wuestenberg,
Rita Wolfs
FIRST AMENDMENT
19
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
5.0% $25,000,000
LANDESBANK RHEINLAND-PFALZ -
GIORZENTRALE, as a Lender
By /s/ Ulrich Voepel
--------------------------------------
Name: Ulrich Voepel
Title: Vice President
By /s/ Robert Wagner
--------------------------------------
Name: Robert Wagner
Title: Manager
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Landesbank Rheinland Pfalz - Landesbank Rheinland Pfalz - Girozentrale
Girozentrale Grobe Bleiche 54-56
Grobe Bleiche 54-56 D 55098 Mainz
D 55098 Mainz Germany
Germany
FACSIMILE NO.: 0049-6131-13-2684 FACSIMILE NO.: 0049-6131-13-2684 (Voepel)
(Voepel) 0049-6131-13-2599 (Wagner)
0049-6131-13-2599
(Wagner)
ATTENTION: Mr. Voepel or Mr. Wagner ATTENTION: Mr. Voepel or Mr. Wagner
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Landesbank Rheinland Pfalz - Bankers Trust, New York
Girozentrale N.Y. 1006
Grobe Bleiche 54-56 Account-Number: 24-101-861
D 55098 Mainz Swift code: BKTR US 33
Germany
FACSIMILE NO.: 0049-6131-13-2684
(Voepel)
0049-6131-13-2599
(Wagner)
ATTENTION: Mr. Voepel or Mr. Wagner
FIRST AMENDMENT
20
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
3.0% $15,000,000 BANCA MONTE DEI PASCHI DE SIENA, SPA,
LONDON BRANCH, as a Lender
By /s/ Duncan Fouse
--------------------------------------
Name: Duncan Fouse
Title: Deputy General Manager
By /s/ Colin Harbour
--------------------------------------
Name: Colin Harbour
Title: Senior Manager
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
9th Floor 122 Leadenhall Street
55 East 59th Street London EC3V 4RH
New York, NY
10022-1112
FACSIMILE NO.: 0171-621-9407
FACSIMILE NO.: 212-891-3661
ATTENTION: Howard Kemp
ATTENTION: Daniele Bastianelli
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
122 Leadenhall Street 122 Leadenhall Street
London EC3V 4RH London EC3V 4RH
FACSIMILE NO.: 0171-621-9407 FACSIMILE NO.: 0171-621-9407
ATTENTION: Howard Kemp ATTENTION: Howard Kemp
FIRST AMENDMENT
21
EXECUTED as of the date first stated in this First Amendment to European Credit
Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
3.0% $15,000,000 BANK AUSTRIA AKTIENGESELLSCHAFT, as a
Lender
By /s/ Robert TenHave
--------------------------------------
Name: Robert TenHave
Title: S.V.P.
By /s/ Christopher Miller
--------------------------------------
Name: Christopher Miller
Title: A.V.P.
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
565 Fifth Avenue 565 Fifth Avenue
New York, New York 10017 New York, New York 10017
FACSIMILE NO.: 212-880-1080 FACSIMILE NO.: 212-880-1180
ATTENTION: Mark Nolan ATTENTION: Lynn Perri
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
565 Fifth Avenue 565 Fifth Avenue
New York, New York 10017 New York, New York 10017
FACSIMILE NO.: 212-880-1080 FACSIMILE NO.: 212-880-1180
ATTENTION: Mark Nolan ATTENTION: Lynn Perri
FIRST AMENDMENT
22
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
3.0% $15,000,000 CREDIT COMMUNAL DE BELQIQUE, as a Lender
By_______________________________________
Name:__________________________________
Title:_________________________________
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
__________________________________ _________________________________________
__________________________________ _________________________________________
__________________________________ _________________________________________
FACSIMILE NO.:____________________ FACSIMILE NO.:___________________________
ATTENTION:________________________ ATTENTION:_______________________________
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
__________________________________ _________________________________________
__________________________________ _________________________________________
__________________________________ _________________________________________
FACSIMILE NO.:____________________ FACSIMILE NO.:___________________________
ATTENTION:________________________ ATTENTION:_______________________________
FIRST AMENDMENT
23
EXECUTED as of the date first stated in this First Amendment to European Credit
Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
5.0% $25,000,000 DEN DANSKE BANK, as a Lender
By /S/ Roger Lippold
--------------------------------------
Name: Roger Lippold
Title: Mnaager Legal Department
By /s/ Kieran P. Reyan
--------------------------------------
Name: Kieran P. Reyan
Title: Manager, Syndications
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Den Danske Bank, London Branch Den Danske Bank, London Branch
75 King William Street 75 King William Street
London EC4N 7DT London EC4N 7DT
ENGLAND ENGLAND
FACSIMILE NO.: 44-171-410-8001 FACSIMILE NO.: 44-171-410-8001
ATTENTION: Loan Administration ATTENTION: Loan Administration
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Den Danske Bank, London Branch Den Danske Bank, London Branch
75 King William Street 75 King William Street
London EC4N 7DT London EC4N 7DT
ENGLAND ENGLAND
FACSIMILE NO.: 44-171-410-8001 FACSIMILE NO.: 44-171-410-8001
ATTENTION: Loan Administration
FIRST AMENDMENT
24
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
3.0% $15,000,000 THE NIKKO BANK (UK) PLC, as a Lender
By_______________________________________
Name:__________________________________
Title:_________________________________
By_______________________________________
Name:__________________________________
Title:_________________________________
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Nikko Bank (U.K.) plc Nikko Bank (U.K.) plc
17-21 Godliman Street 17-21 Godliman Street
EC4V 5NB EC4V 5NB
FACSIMILE NO.: 0171-815-0058 FACSIMILE NO.: 0171-815-0058
ATTENTION: Mayumi Bhalla ATTENTION: Mayumi Bhalla
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Nikko Bank (U.K.) plc Nikko Bank (U.K.) plc
17-21 Godliman Street 17-21 Godliman Street
EC4V 5NB EC4V 5NB
FACSIMILE NO.: 0171-815-0058 FACSIMILE NO.: 0171-815-0058
ATTENTION: Mayumi Bhalla ATTENTION: Mayumi Bhalla
FIRST AMENDMENT
25
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
3.0% $15,000,000
STANDARD CHARTERED BANK, as a Lender
By_______________________________________
Name:__________________________________
Title:_________________________________
By_______________________________________
Name:__________________________________
Title:_________________________________
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
707 Wilshire Blvd. 707 Wilshire Blvd.
Los Angeles, CA Los Angeles, CA
FACSIMILE NO.: 213-614-4270 FACSIMILE NO.: 213-614-4270
ATTENTION: Qustandi Shiber ATTENTION: Qustandi Shiber
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
7 World Trade Center, 26th Floor 7 World Trade Center, 26th Floor
New York, NY 10048 New York, NY 10048
FACSIMILE NO.: 212-667-0568 FACSIMILE NO.: 212-667-0568
ATTENTION: Yolanda Rodriguez ATTENTION: Yolanda Rodriguez
FIRST AMENDMENT
26
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000 ABN AMRO BANK N.V., BELGIAN BRANCH, as
a Lender
By /s/ Joen Provoost
--------------------------------------
Name: Joen Provoost
Title: Accounts Manager
By /s/ Jacques Straetmans
--------------------------------------
Name: Jacques Straetmans
Title: Manager Securitization
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
ABN AMRO Bank N.V., Belgian Branch ABN AMRO Bank N.V., Belgian Branch
Regentlaan 53 Regentlaan 53
B-1000 Brussels B-1000 Brussels
FACSIMILE NO.: 32-2-546-0400 FACSIMILE NO.: 32-2-546-0400
ATTENTION: AGI-J. Van Den Eynde ATTENTION: AGI-M. Hoomans
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
ABN AMRO Bank N.V., Belgian Branch ABN AMRO Bank N.V., Belgian Branch
Regentlaan 53 Regentlaan 53
B-1000 Brussels B-1000 Brussels
FACSIMILE NO.: 32-2-546-0400 FACSIMILE NO.: 32-2-546-0400
ATTENTION: AGI-J. Van Den Eynde ATTENTION: AGI-J. Van Den Eynde
FIRST AMENDMENT
27
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000 BANCI DI ROMA, LONDON BRANCH, as a Lender
By /s/ Peter Scharf
--------------------------------------
Name: Peter Scharf
Title: Deputy Chief Manager Business
By /s/ Vincent Wright
--------------------------------------
Name: Vincent Wright
Title: Business Development Officer
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
81/87 Gresham Street
81/87 Gresham Street London EC2V 7NQ
London EC2V 7NQ
FACSIMILE NO.: 0171-454-7292
FACSIMILE NO.: 0171-454-7292
ATTENTION: S. Siracusa
ATTENTION: S. Siracusa
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
81/87 Gresham Street 81/87 Gresham Street
London EC2V 7NQ London EC2V 7NQ
FACSIMILE NO.: 0171-454-7292 FACSIMILE NO.: 0171-454-7292
ATTENTION: S. Siracusa ATTENTION: S. Siracusa
FIRST AMENDMENT
28
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000 BANCO BILBAO VIZCAYA, S.A., as a Lender
By /s/ Tereja Tejedor
--------------------------------------
Name: Tereja Tejedor
Title: Capital Market
By /s/ Alfonso Vallejo
--------------------------------------
Name: Alfonso Vallejo
Title: Capital Market
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Banco Bilbao Vizcaya, S.A. Banco Bilbao Vizcaya, S.A.
Clara del Rey 26, 3 th. floor Clara del Rey 26, 3 th. floor
28.002 Madrid 28.002 Madrid
FACSIMILE: 34-1-374-41-40 FACSIMILE: 34-1-374-41-40
TELEPHONE: 34-1-374-41-74 TELEPHONE: 34-1-374-41-74
ATTENTION: Juan Ramon Arcos ATTENTION: Juan Ramon Arcos
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Banco Bilbao Vizcaya, S.A. Banco Bilbao Vizcaya, S.A.
Clara del Rey 26, 3 th. floor Clara del Rey 26, 3 th. floor
28.002 Madrid 28.002 Madrid
FACSIMILE: 34-1-374-41-40 FACSIMILE: 34-1-374-41-40
TELEPHONE: 34-1-374-41-74 TELEPHONE: 34-1-374-41-74
ATTENTION: Juan Ramon Arcos ATTENTION: Juan Ramon Arcos
FIRST AMENDMENT
29
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000 BANQUE PARIBAS BELGIQUE S.A., as a Lender
By_______________________________________
Name:__________________________________
Title:_________________________________
By_______________________________________
Name:__________________________________
Title:_________________________________
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Banque Paribas Belgique S.A. Banque Paribas Belgique S.A.
Em. Jacqmainlaan 162 Em. Jacqmainlaan 162
1000 Brussels, BELGIUM 1000 Brussels, BELGIUM
FACSIMILE NO.: 00-32-2-204-41-16 FACSIMILE NO.: 00-32-2-204-41-16
ATTENTION: P. Vermeiren ATTENTION: P. Vermeiren
J. Van Helleputte J. Van Helleputte
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Banque Paribas Belgique S.A. Banque Paribas Belgique S.A.
Em. Jacqmainlaan 162 Em. Jacqmainlaan 162
1000 Brussels, BELGIUM 1000 Brussels, BELGIUM
FACSIMILE NO.: 00-32-2-204-40-92 FACSIMILE NO.: 00-32-2-204-40-92
ATTENTION: Peter Rabaey ATTENTION: Peter Rabaey
FIRST AMENDMENT
30
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000
CARIPLO, CASSA DI RISPARMIO DELLE
PROVINCIE LOMBARDE S.P.A., as a Lender
By /s/ Renato Bassi
--------------------------------------
Name: Renato Bassi
Title: Dir. Gen.
By /s/ J. Ignacio de la Vega
--------------------------------------
Name: J. Ignacio de la Vega
Title: Jefe Creditos
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
10 East 53rd Street Succusal de Madrid
New York, NY 10022 Calle Alcala 44
28014 Madrid
FACSIMILE NO.: 212-527-8277
FACSIMILE NO.: 00-34-1523-39-81
ATTENTION: Anthony Giobbi
ATTENTION: Mr. R. Bassi/
Mr. J. Ignacio de la Vega
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Filiale de Madrid Succusal de Madrid
Calle Alcala 44 Calle Alcala 44
28014 Madrid 28014 Madrid
FACSIMILE NO.: 00-34-1523-39-81 FACSIMILE NO.: 00-34-1523-39-81
ATTENTION: Mr. R. Bassi/ ATTENTION: Mr. R. Bassi/
Mr. J. Ignacio de la Vega Mr. J. Ignacio de la Vega
FIRST AMENDMENT
31
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000 CREDIT LYONNAIS BELGIUM S.A., as a Lender
By_______________________________________
Name:__________________________________
Title:_________________________________
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Credit Lyonnais Los Angeles Branch Mamix Avenue, 17
515 South Flower Street, Suite 2000 1000 Brussels
Los Angeles, CA 90071 BELGIUM
FACSIMILE NO.: 213-623-3437 FACSIMILE NO.: 00-32-2-516-09-40
ATTENTION: Mrs. Penny Chu ATTENTION: Mrs. Valerie Solinhac
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Mamix Avenue, 17 Mamix Avenue, 17
1000 Brussels 1000 Brussels
BELGIUM BELGIUM
FACSIMILE NO.: 00-32-2-516-09-40 FACSIMILE NO.: 00-32-2-516-09-40
ATTENTION: Mrs. Valerie Solinhac ATTENTION: Mrs. Valerie Solinhac
FIRST AMENDMENT
32
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000
DAI-ICHI KANGYO BANK NEDERLAND N.V.,
as a Lender
By /s/ K. Fukuda
--------------------------------------
Name: K. Fukuda
Title: Managing Director &
Deputy General Manager
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Dai-Ichi Kangyo Bank Nederland N.V. Dai-Ichi Kangyo Bank Nederland N.V.
Apollolaan 171 Apollolaan 171
1077 A5 Amsterdam 1077 A5 Amsterdam
The Netherlands The Netherlands
FACSIMILE NO.: 00-31-20-676-0301 FACSIMILE NO.: 00-31-20-676-0301
ATTENTION: Marilyn L. Blancaflor ATTENTION: Marilyn L. Blancaflor
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Dai-Ichi Kangyo Bank Nederland N.V. Dai-Ichi Kangyo Bank Nederland N.V.
Apollolaan 171 Apollolaan 171
1077 A5 Amsterdam 1077 A5 Amsterdam
The Netherlands The Netherlands
FACSIMILE NO.: 00-31-20-676-0301 FACSIMILE NO.: 00-31-20-676-0301
ATTENTION: Marilyn L. Blancaflor ATTENTION: Marilyn L. Blancaflor
FIRST AMENDMENT
33
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000 DG BANK, as a Lender
By /s/ K.-P. Brauer
--------------------------------------
Name: K.-P. Brauer
Title: Associate Director
By /s/ Marc Roemke
--------------------------------------
Name: Marc Roemke
Title: Manager
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
DG Bank Luxembourg S.A. DG Bank Luxembourg S.A.
4, rue Thomas Edison 4, rue Thomas Edison
L 1445 Luxembourg-Strassen L 1445 Luxembourg-Strassen
Luxembourg Luxembourg
FACSIMILE NO.: 00352-457393 FACSIMILE NO.: 00352-457393
ATTENTION: Marc Roemke, Manager ATTENTION: Marc Roemke, Manager
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
DG Bank Luxembourg S.A. DG Bank Luxembourg S.A.
4, rue Thomas Edison 4, rue Thomas Edison
L 1445 Luxembourg-Strassen L 1445 Luxembourg-Strassen
Luxembourg Luxembourg
FACSIMILE NO.: 00352-457393 FACSIMILE NO.: 00352-457393
ATTENTION: Marc Roemke, Manager ATTENTION: Marc Roemke, Manager
FIRST AMENDMENT
34
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
4.0% $20,000,000
FRANKFURTER SPARKASSE, as a Lender
By /s/ Kittscher
--------------------------------------
Name: Kittscher
Title: Deputy Chairman of the
Board Management
By /s/ Kuhn
--------------------------------------
Name: Kuhn
Title: Head of the Loan Department
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Frankfurter Sparkasse Frankfurter Sparkasse
Neue Mainzer Str. 47-53 Neue Mainzer Str. 47-53
60255 Frankfurt 60255 Frankfurt
FACSIMILE NO.: 0049-69-2641-3225 FACSIMILE NO.: 0049-69-2641-3225
ATTENTION: Mr. Gattano ATTENTION: Mr. Gattano
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Frankfurter Sparkasse Frankfurter Sparkasse
Neue Mainzer Str. 47-53 Neue Mainzer Str. 47-53
60255 Frankfurt 60255 Frankfurt
FACSIMILE NO.: 0049-69-2641-3225 FACSIMILE NO.: 0049-69-2641-3225
ATTENTION: Mr. Gattano ATTENTION: Mr. Gattano
FIRST AMENDMENT
35
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000
GENERALE BANK, as a Lender
By /s/ Hans Neukomm
--------------------------------------
Name: Hans Neukomm
Title: General Manager
By /s/ Simon Del Rosario
--------------------------------------
Name: Simon Del Rosario
Title: Senior Vice President
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
520 Madison Avenue, 41st Floor 520 Madison Avenue, 41st Floor
New York, NY 10022 New York, NY 10022
FACSIMILE NO.: 212-838-7492 FACSIMILE NO.: 212-838-7492
ATTENTION: E. Matthews ATTENTION: E. Matthews
Corporate Credit Department
3, Montagne du Parc
1000 Brussels
FACSIMILE NO.: 32-2-565-6344
ATTENTION: Chantal De Mol
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Corporate Credit Department 520 Madison Avenue, 41st Floor
3, Montagne du Parc New York, NY 10022
1000 Brussels FACSIMILE NO.: 32-2-565-6344
FACSIMILE NO.: 32-2-565-6344 ATTENTION: Chantal De Mol
ATTENTION: Chantal De Mol
520 Madison Avenue, 41st Floor
New York, NY 10022
FACSIMILE NO.: 212-838-7492
ATTENTION: E. Matthews
FIRST AMENDMENT
36
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000 MORGAN GUARANTY TRUST CO. OF NEW YORK,
as a Lender
By /s/ John M. Mikolay
--------------------------------------
Name: John M. Mikolay
Title: Vice President
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Morgan Guranty Trust Company of
New York 500 Stanton Christiana Road
60 Wall Street Newark, DE 19713
New York, NY 10260
FACSIMILE NO.: 302/634-1094
FACSIMILE NO.: 212-648-5918
ATTENTION: Allison Hollis
ATTENTION: Kathryn Sayko-Yanes
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
500 Stanton Christiana Road 500 Stanton Christiana Road
Newark, DE 19713 Newark, DE 19713
FACSIMILE NO.: 302/634-1094 FACSIMILE NO.: 302/634-1094
ATTENTION: Cindy Bedford ATTENTION: Cindy Bedford
FIRST AMENDMENT
37
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000 THE SANWA BANK LTD. BRUSSELS, as a Lender
By /s/ Masahiko Wakahara
--------------------------------------
Name: Masahiko Wakahara
Title: Deputy General Manager
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
Sanwa Bank Ltd Sanwa Bank Ltd
Los Angeles Branch Los Angeles Branch
601 South Figueroa Street 601 South Figueroa Street
Los Angeles, CA 90017 Los Angeles, CA 90017
FACSIMILE NO.: 213-623-4912 FACSIMILE NO.: 213-623-4912
ATTENTION: Loan Administration Dept. ATTENTION: Loan Administration Dept.
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
Sanwa Bank Brussels Branch Sanwa Bank Brussels Branch
Kunstlaan 53/54 Kunstlaan 53/54
1000 Brussels 1000 Brussels
Belgium Belgium
FACSIMILE NO.: 32-2-514-43-81 Sanwa New York
Account Number: ABA 982 UID 144780
ATTENTION: Lilliane Smets-Van Brabant Swift Code: SANW US33
Facsimile No.: 32-2-513-43-81
ATTENTION: Mrs. Lilian Smets-Van Brabant
FIRST AMENDMENT
38
EXECUTED as of the date first stated in this First Amendment to
European Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
2.0% $10,000,000
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL).,
as a Lender
By /s/ Michael Dioks
--------------------------------------
Name: Michael Dioks
Title: Head Debt Capital Markets
LENDING OFFICE FOR LOANS TO MICRO: ADDRESS FOR NOTICES:
2 Cannon Street 2 Cannon Street
London EC4M 6XX London EC4M 6XX
FACSIMILE NO.: 0171-236-4178 FACSIMILE NO.: 0171-236-4178
ATTENTION: Lesley Makins ATTENTION: Lesley Makins
LENDING OFFICE FOR OTHER LOANS: ADDRESS FOR PAYMENT OF FEES:
2 Cannon Street 2 Cannon Street
London EC4M 6XX London EC4M 6XX
FACSIMILE NO.: 0171-236-4178 FACSIMILE NO.: 0171-236-4178
ATTENTION: Lesley Makins ATTENTION: Lesley Makins
FIRST AMENDMENT
1
EXHIBIT 10.42
FIRST AMENDMENT TO CANADIAN CREDIT AGREEMENT
dated as of September 25, 1998,
among
INGRAM MICRO INC., and
INGRAM MICRO INC. (CANADA),as the Borrowers and Guarantors, and
CERTAIN FINANCIAL INSTITUTIONS,
as the Relevant Required Lenders
amending the US $150,000,000
CANADIAN CREDIT AGREEMENT
dated as of October 28, 1997,
also among
INGRAM MICRO INC. and
INGRAM MICRO INC. (CANADA),
as the Borrowers and Guarantors,
CERTAIN FINANCIAL INSTITUTIONS,
as the Lenders,
THE BANK OF NOVA SCOTIA,
as Administrative Agent for the Lenders,
ROYAL BANK OF CANADA,
as Syndication Agent for the Lenders,
and
BANK OF TOKYO-MITSUBISHI (CANADA),
as the Co-Agent
PREPARED BY HAYNES AND BOONE, L.L.P.
2
FIRST AMENDMENT TO CANADIAN CREDIT AGREEMENT
THIS DOCUMENT is entered into as of September 25, 1998, among:
INGRAM MICRO INC., a corporation organized and existing under the laws
of the State of Delaware, United States of America ("MICRO");
INGRAM MICRO INC., a corporation organized and existing under the laws
of the Province of Ontario, Canada ("MICRO CANADA," and collectively
with Micro, the "BORROWERS"); and
The financial institutions executing this document as Lenders (the
"RELEVANT REQUIRED LENDERS").
(see PARAGRAPH 1 below regarding defined terms)
This document is being executed and delivered to amend certain
provisions of the Canadian Credit Agreement (as renewed, extended, amended, or
supplemented, the "CREDIT AGREEMENT") dated as of October 28, 1997, among (a)
the Borrowers; (b) certain Lenders (which includes the Relevant Required
Lenders); and (c) The Bank of Nova Scotia ("SCOTIABANK"), as administrative
agent for the Lenders (in such capacity, the "ADMINISTRATIVE AGENT"), Royal Bank
of Canada ("ROYAL BANK"), as syndication agent for the Lenders (in such
capacity, the "SYNDICATION AGENT"), and Bank of Tokyo-Mitsubishi (Canada), as
the co-agent (in such capacity, the "CO-AGENT"), all of which are collectively
the "AGENTS". Effective December 22, 1997, Micro Singapore ceased to be a
Subsidiary of Micro, and effective January 15, 1998, in accordance with SECTION
11.15 of the Credit Agreement, Micro Singapore ceased to be a Guarantor under
the Credit Agreement.
The Relevant Required Lenders have agreed, upon and subject to the
terms and conditions of this document, to alter the terms of the Credit
Agreement as provided below.
ACCORDINGLY, for adequate and sufficient consideration, the Borrowers
and the Relevant Required Lenders agree as follows:
1. TERMS AND REFERENCES. Unless otherwise stated in this document, terms defined
in the Credit Agreement have the same meanings when used in this document and
references to "ARTICLES," "SECTIONS," "SCHEDULES," and "EXHIBITS" are to the
Credit Agreement's articles, sections, schedules, and exhibits.
2. AMENDMENTS. Subject to PARAGRAPH 3 below but otherwise effective as of the
date of this document, the Credit Agreement is amended as follows:
A. SECTION 1.1 is amended by adding or entirely amending, as the case
may be, the following defined terms in alphabetical order with all other defined
terms in that section:
"ACQUIRED EXISTING DEBT AND LIENS" means, for a
period of 90 days following the acquisition or merger of a
Person by or into Micro or any of its Subsidiaries or the
acquisition of a business unit of a Person or the assets of a
Person or business unit of a Person by Micro or any of its
Subsidiaries, the Indebtedness and Liens of that Person or
business unit that (a) were not incurred in connection with
that acquisition or merger and do not constitute any
refinancing of Indebtedness so incurred and (b) were in
existence at the time of that acquisition or merger.
3
"ADDITIONAL PERMITTED LIENS" means, as of any date
(a) Liens securing Indebtedness and not described in CLAUSES
(A) through (L) of SECTION 8.2.2, but only to the extent that
(i) the Amount of Additional Liens on that date does not
exceed twenty percent (20%) of Consolidated Tangible Net Worth
on that date and (ii) Borrowers are otherwise in compliance
with SECTION 8.2.1(b), and (b) Liens constituting Acquired
Existing Debt and Liens on that date.
"BANKERS' ACCEPTANCE" means (a) a non-interest
bearing bill of exchange in Canadian Dollars having a term of
not less than 30 nor more than 180 days and maturing on a
Business Day, drawn by a Borrower, and accepted by a Lender,
as evidenced by such Lender's endorsement thereon at the
direction of such Borrower, or (b) a depository bill, within
the meaning of the Depository Bills and Notes Act (Canada).
"FOREIGN SUBSIDIARY" means any Subsidiary that is not
domiciled in the United States.
"MICRO SINGAPORE" means Ingram Micro Singapore Pte
Ltd., a corporation organized and existing under the laws of
Singapore, but it is no longer party to any Loan Document.
"SENIOR CONSOLIDATED FUNDED DEBT" means, as of any
date of determination, the total of all Consolidated Funded
Debt of Micro and its Consolidated Subsidiaries outstanding on
such date that ranks PARI PASSU with the Obligations.
B. The definition of "Material Asset Acquisition" in SECTION 1.1 is
amended to add the words "or 8.2.9(d)" at the end of it.
C. In the definition of "Total Indebtedness of Subsidiaries" in SECTION
1.1 (i) the word "and" before CLAUSE (b) is replaced with a comma and (ii) a new
CLAUSE (c) is added as follows:
, and (c) any Indebtedness under any Loan Document (as defined
in this Agreement, the U.S. Credit Agreement, and the European
Credit Agreement).
D. SECTION 1.1 is amended by entirely deleting the definitions of the
terms "Consolidated Current Assets," "Consolidated Current Liabilities," and
"Consolidated Current Ratio".
E. A new SECTION 7.18 is added as follows:
SECTION 7.18 YEAR 2000. Micro believes that its
computer applications that are material to its business and
operations will be able to perform properly date-sensitive
functions for all dates on and after January 1, 2000, EXCEPT
to the extent that a failure to do so would not reasonably be
expected to have a Material Adverse Effect.
F. SECTION 8.1.10 is amended by adding the parenthetical "(OTHER THAN
Foreign Subsidiaries)" after the 9th word "Subsidiaries" in CLAUSE (c) of that
section.
G. SECTION 8.2.1(b) is entirely amended as follows:
FIRST AMENDMENT
4
(b) Micro will not at the end of any Fiscal Period
permit (i) Total Indebtedness of Subsidiaries (OTHER THAN
Indebtedness of any Guarantor and Indebtedness constituting
Acquired Existing Debt and Liens) to exceed twenty percent
(20%) of Consolidated Tangible Net Worth, or (ii) SECTION
8.2.2(m) to be violated.
H. SECTIONS 8.2.2(k) and (l) are entirely amended as follows:
(k) Liens of the nature referred to in CLAUSE (b) of
the definition of the term "LIEN" and granted to a purchaser
or any assignee of such purchaser which has financed the
relevant purchase of Trade Accounts Receivable of any Borrower
or any of their respective subsidiaries and Liens on any
related property that would ordinarily be subject to a Lien in
connection therewith such as proceeds and records;
(l) Liens on accounts receivable of Micro Canada with
respect to any accounts receivable securitization program and
on any related property that would ordinarily be subject to a
Lien in connection therewith such as proceeds and records; and
I. SECTION 8.2.3(a) is entirely amended as follows:
(a) [INTENTIONALLY BLANK]
J. SECTION 8.2.3(c) is entirely amended as follows:
(c) (i) the ratio of (A) the average daily balances
of Senior Consolidated Funded Debt during any Fiscal Period to
(B) Consolidated EBITDA for the period of four Fiscal Periods
ending on the last day of such Fiscal Period to exceed 3.5 to
1.0; and (ii) the ratio of (A) the average daily balances of
Consolidated Funded Debt during any Fiscal Period (B) to
Consolidated EBITDA for the period of four Fiscal Periods
ending on the last day of such Fiscal Period to exceed 4.0 to
1.0;
PROVIDED THAT, for purposes of calculating the preceding
ratios (A) Consolidated Funded Debt on any day shall be the
amount otherwise determined pursuant to the definition thereof
plus the amount of Consolidated Transferred Receivables on
such day, and (B) the contribution of any Subsidiary of Micro
acquired (to the extent the acquisition is treated for
accounting purposes as a purchase) during those four Fiscal
Periods to Consolidated EBITDA shall be calculated on a PRO
FORMA basis as if it had been a Subsidiary of Micro during all
of those four Fiscal Periods.
K. SECTION 8.2.3(d) is entirely amended as follows:
(d) the Consolidated Tangible Net Worth at the end of
any Fiscal Period to be less than the SUM of (i) 90% of
Consolidated Tangible Net Worth at the end of the Fiscal Year
ending nearest to December 31, 1997, PLUS (ii) 50% of
Consolidated Net Income (without taking into account any
losses incurred in any Fiscal Year) for each Fiscal Year ended
thereafter that ends on or before the last day of that Fiscal
Period.
L. The proviso in SECTION 8.2.4 is entirely amended as follows:
FIRST AMENDMENT
5
; PROVIDED, HOWEVER, THAT, Micro may redeem, purchase
or acquire (a) any of its capital stock (i) issued to
employees pursuant to any Plan or other contract or
arrangement relating to employment upon the termination of
employment or other events or (ii) in a transaction
contemplated by the Transition Agreements and (b) any of its
Indebtedness that is convertible into its securities.
M. The words "such or" are deleted as the 27th and 28th words of
the last sentence of SECTION 8.2.6.
N. SECTION 8.2.7(a) is entirely amended as follows:
(a) No Borrower may make any Material Asset
Acquisition UNLESS no Event of Default exists or would exist
after giving effect to the proposed Material Asset
Acquisition.
O. SECTION 8.2.9 is amended as follows:
(1) The word "and" is deleted at the end of SECTION 8.2.9(b).
(2) SECTION 8.2.9(c) is entirely amended as follows:
(c) so long as no Event of Default has occurred and
is continuing or would occur after giving effect thereto,
Micro and any Subsidiary of Micro may Dispose of assets in
transactions exclusively among Micro and any of its
Subsidiaries or among Subsidiaries of Micro that satisfy the
requirements of SECTION 8.2.6; PROVIDED THAT, notwithstanding
any provision hereof to the contrary, in the event that,
immediately after giving effect to any Disposition described
in this CLAUSE (c) to a Subsidiary of Micro, such Subsidiary
shall own assets constituting at least ten percent (10%) of
Consolidated Assets determined as of the last day of the most
recently completed Fiscal Period, such Subsidiary of Micro
shall be deemed a Material Subsidiary for all purposes
hereunder as of the date of such Disposition and Micro shall
cause any such Material Subsidiary (UNLESS a Foreign
Subsidiary) promptly to execute and deliver an Additional
Guaranty in favor of the Lender Parties in accordance with
SECTION 8.1.10.
(3) A new SECTION 8.2.9(d) is added as follows:
(d) subject to SECTION 8.2.8, any Borrower may (and
may permit any of its Subsidiaries to) sell, assign, grant a
Lien in, or otherwise transfer any interest in its Trade
Accounts Receivable and related property such as proceeds and
records.
P. The last parenthetical phrase in SECTION 9.1.3 that begins with the
word "excluding" is entirely deleted.
Q. The last parenthetical in SECTION 9.1.5 is entirely amended as
follows:
(without the giving of further notice or lapse of additional
time)
FIRST AMENDMENT
6
3. CONDITIONS PRECEDENT. Notwithstanding any contrary provision, PARAGRAPH 2
above is not effective unless and until (A) all principal, interest, fees,
costs, and expenses due under the Credit Agreement (as amended by this
document), all fees payable to either Agent in connection with this document as
agreed to between such Agent and Micro, and all outstanding fees and expenses of
counsel to the Agents are, in each case, paid in full to the extent due and
payable (and, unless an amount is otherwise provided by the Loan Documents and
without waiving the right for subsequent reimbursement in accordance with the
Loan Documents, to the extent that a reasonably detailed invoice is presented to
Micro by September 21, 1998) after giving effect to this document and (B) the
Administrative Agent receives either (i) counterparts of this document duly
executed and delivered by an Authorized Person of each Obligor and by the
Required Lenders or (ii) facsimile, telegraphic, or other written confirmation
of the execution of counterparts of this document.
4. REPRESENTATIONS. To induce the Relevant Required Lenders to enter into this
document, the Borrowers (for themselves and each other Obligor) jointly and
severally represent and warrant to the Agents, Co-Agent, and the Lenders as
follows:
A. CREDIT AGREEMENT. Each of the representations and warranties of each
Obligor set forth in ARTICLE VII of the Credit Agreement (excluding those
contained in SECTION 7.8) is true and correct as though made on and as of the
date of this document (unless stated to relate solely to an earlier date, in
which case, such representations and warranties were true and correct as of such
earlier date) with each reference in those representations to "this Agreement,"
the "Loan Documents," "hereof," "hereunder," "thereof," "thereunder," and words
of like import being, for purposes of this clause, references to the Credit
Agreement and the Loan Documents, in each case as amended or waived by this
document.
B. ENFORCEABILITY. Upon execution and delivery by the Obligors and the
Required Lenders, this document will constitute a valid and binding agreement of
each Obligor, enforceable against it in accordance with this document's terms
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, or other similar laws relating to or limiting creditors' rights
generally or by general principles of equity.
C. OBLIGORS. As of the date of, and after giving effect to, this
document, the only Obligors under the Credit Agreement and Loan Documents are
Micro; Micro Canada; Ingram European Coordination Center N.V., a company
organized and existing under the laws of The Kingdom of Belgium; Ingram Micro
Holdings Limited, a corporation organized and existing under the laws of the
United Kingdom; and Ingram Micro (UK) Limited, a corporation organized and
existing under the laws of the United Kingdom.
5. RATIFICATIONS. To induce the Relevant Required Lenders to enter into this
document each Borrower (and, by its execution below, each other Obligor) (A)
ratifies and confirms all provisions of the Credit Agreement and other Loan
Documents to which it is a party, as amended or waived by this document, and (B)
ratifies and confirms that all guaranties granted in favor of any of the Agents
or the Lenders under the Loan Documents (as they may have been renewed,
extended, amended, or supplemented) are not released, reduced, or otherwise
adversely affected by this document, or any other Loan Document, and continue to
guarantee full payment and performance of the present and future Obligations.
FIRST AMENDMENT
7
6. MISCELLANEOUS.
A. CREDIT AGREEMENT AND LOAN DOCUMENTS. Upon the effectiveness of
PARAGRAPH 2 above as provided in PARAGRAPH 3 above, all references in the Loan
Documents to the "Credit Agreement" refer to the Credit Agreement as amended by
this document. This document is a "Loan Document" referred to in the Credit
Agreement, and the provisions relating to Loan Documents in ARTICLES I and XI
are incorporated in this document by reference. Except as specifically amended
and modified in this document, the Credit Agreement is unchanged and continues
in full force and effect. No change or waiver of any provision of this document
is valid unless in a writing that is signed by the party against whom it is
sought to be enforced.
B. GOVERNING LAW. This document shall be deemed to be a contract made
under and governed by the laws of the Province of Ontario, Canada.
C. COUNTERPARTS. This document may be executed in any number of
counterparts with the same effect as if all signatories had signed the same
document. All counterparts shall be construed together to constitute one and the
same document.
REMAINDER OF PAGE INTENTIONALLY BLANK. THIS PAGE IS
FOLLOWED BY A SIGNATURE PAGE FOR THE OBLIGORS, FOLLOWED BY SEPARATE
SIGNATURE PAGES FOR THE RELEVANT REQUIRED LENDERS.
FIRST AMENDMENT
8
EXECUTED as of the date first stated in this First Amendment to
Canadian Credit Agreement.
INGRAM MICRO INC., a corporation INGRAM MICRO INC., a corporation
organized and existing under organized and existing under
the laws of the State of Delaware, the laws of the Province of
United States, as a Borrower and Ontario, Canada, as a Borrower
a Guarantor and a Guarantor
By /s/ James F. Ricketts By /s/ Michael J. Grainger
-------------------------------- --------------------------------
Name: James F. Ricketts Name: Michael J. Grainger
Title: Vice President & Title: Authorized Representative
Worldwide Treasurer
ADDRESS: 1600 E. St. Andrew Place ADDRESS: 230 Barmac Drive
Santa Ana, CA 92705 Weston, Ontario
Canada M9L 2Z3
FACSIMILE NO.: 714-566-9447 FACSIMILE NO.: 4161-740-8623
ATTENTION: James F. Ricketts ATTENTION: Robert E. Carbrey
The undersigned Obligors consent and agree in all respects to PARAGRAPH
5 and all other provisions of the foregoing First Amendment to Credit Agreement
as Obligors under the Credit Agreement and all related Loan Documents as those
terms are defined in the Credit Agreement.
INGRAM MICRO HOLDINGS LTD., INGRAM MICRO (UK) LTD.,
as an Obligor as an Obligor
By /s/ Stephen Gill By /s/ Stephen Gill
-------------------------------- --------------------------------
Name: Stephen Gill Name: Stephen Gill
Title: Vice President Finance and Title: VP, Finance and CFO Europe
CFO Europe
ADDRESS: Ingram House ADDRESS: Ingram House
Garamonde Drive Garamonde Drive
Wymbush Wymbush
Milton Keynes Milton Keynes
Bucks MK8 8DF Bucks MK8 8DF
FACSIMILE NO.: 011-32-2-254-9290 FACSIMILE NO.: 011-32-2-254-9290
ATTENTION: Stephen Gill ATTENTION: Stephen Gill
9
EXECUTED as of the date first stated in this First Amendment to
Canadian Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
30% $45,000,000 THE BANK OF NOVA SCOTIA, as the
Administrative Agent
By /s/ R. J. Boomhour
--------------------------------------
Name: R. J. Boomhour
Title: Senior Product Manager
THE BANK OF NOVA SCOTIA
By /s/ Jean Hopkins
--------------------------------------
Name: Jean Hopkins
Title: Relationship Manager
THE BANK OF NOVA SCOTIA
By /s/ Michael House
Name: Michael House
Title: Account Officer
LENDING OFFICE FOR CREDIT LENDING OFFICE FOR CREDIT EXTENSIONS
EXTENSIONS TO MICRO CANADA: TO MICRO:
The Bank of Nova Scotia The Bank of Nova Scotia
44 King Street West 580 California Street
16th Floor Suite 2100
TORONTO, ON M5H 1H1 San Francisco, CA 94104
Facsimile No.: 416-866-2009 Facsimile No.: 415-397-0791
Attention: Jean Hopkins Attention: Ed Kofman
Relationship Manager Relationship Manager
FEE PAYMENT LOCATION FOR CREDIT FEE PAYMENT LOCATION FOR CREDIT
EXTENSIONS TO MICRO CANADA: EXTENSIONS TO MICRO:
The Bank of Nova Scotia The Bank of Nova Scotia
44 King Street West Suite 2700
16th Floor 600 Peachtree Street N.E.
Toronto, ON M5H 1H1 Atlanta, GA 30308
Facsimile No.: 416-866-2009 Facsimile No.: 404-888-8998
Attention: Jean Hopkins Attention: George Wong
Relationship Manager Manager
10
EXECUTED as of the date first stated in this First Amendment to
Canadian Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
30% $45,000,000 ROYAL BANK OF CANADA
By /s/ Karen L. Condon
--------------------------------------
Name: Karen L. Condon
Title: Senior Account Manager
ROYAL BANK OF CANADA
By /s/ Brian J. Smith
--------------------------------------
Name: Brian J. Smith
Title: Senior Manager
LENDING OFFICE FOR CREDIT EXTENSIONS LENDING OFFICE FOR CREDIT EXTENSIONS
TO MICRO CANADA: TO MICRO:
Royal Bank of Canada Royal Bank of Canada
13th Floor, South Tower 600 Wilshire Boulevard
200 Bay Street Suite 800
Toronto, ON M5J 2J5 Los Angeles, CA 90017
Facsimile No.: 416-974-2249 Facsimile No.: 213-955-5350
Attention: Karen Condon Attention: Michael A. Cole
Senior Account Manager Manager
Corporate Banking
FEE PAYMENT LOCATION FOR CREDIT FEE PAYMENT LOCATION FOR CREDIT
EXTENSIONS TO MICRO CANADA: EXTENSIONS TO MICRO:
Royal Bank of Canada Royal Bank of Canada
13th Floor, South Tower 600 Wilshire Boulevard
200 Bay Street Suite 800
Toronto, ON M5J 2J5 Los Angeles, CA 90017
Facsimile No.: 416-974-2249 Facsimile No.: 213-955-5350
Attention: Karen Condon Attention: Michael A. Cole
Senior Account Manager Manager
Corporate Banking
11
EXECUTED as of the date first stated in this First Amendment to
Canadian Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
10% $15,000,000
BANK OF TOKYO-MITSUBISHI (CANADA)
By /s/ T. Vanderlaan
--------------------------------------
Name: T. Vanderlaan
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI LTD.
By /s/ Richard L. Van de Berghe, Jr.
--------------------------------------
Name: Richard L. Van de Berghe, Jr.
Title: Attorney-in-Fact
LENDING OFFICE FOR CREDIT EXTENSIONS LENDING OFFICE FOR CREDIT EXTENSIONS
TO MICRO CANADA: TO MICRO:
Bank of Tokyo-Mitsubishi (Canada) The Bank of Tokyo-Mitsubishi Ltd.
Royal Bank Plaza 1251 Avenue of the Americas
South Tower, Suite 2100 New York, NY 10020-1104
Toronto, ON M5J 2J1
Facsimile No.: 212-782-6445
Facsimile No.: 416-865-9511
Attention: Richard Van de Berghe
Attention: Ted Vanderlaan Attorney-in-Fact
Vice President
Corporate Banking Group
FEE PAYMENT LOCATION FOR CREDIT FEE PAYMENT LOCATION FOR CREDIT
EXTENSIONS TO MICRO CANADA: EXTENSIONS TO MICRO:
Bank of Tokyo-Mitsubishi (Canada) The Bank of Tokyo-Mitsubishi Ltd.
Royal Bank Plaza 1251 Avenue of the Americas
South Tower, Suite 2100 New York, NY 10020-1104
Toronto, ON M5J 2J1
Facsimile No.: 212-782-6445
Facsimile No.: 416-865-9511
Attention: Richard Van de Berghe
Attention: Ted Vanderlaan Attorney-in-Fact
Vice President
Corporate Banking Group
12
EXECUTED as of the date first stated in this First Amendment to
Canadian Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
10% $15,000,000
CANADIAN IMPERIAL BANK OF COMMERCE
By /s/ Howard Palmer
--------------------------------------
Name: Howard Palmer
Title: Executive Director
CIBC INC.
By /s/ Eric Burton
--------------------------------------
Name: Eric Burton
Title: Commercial Specialist Banking
LENDING OFFICE FOR CREDIT EXTENSIONS LENDING OFFICE FOR CREDIT EXTENSIONS
TO MICRO CANADA: TO MICRO:
Canadian Imperial Bank of Commerce Canadian Imperial Bank of Commerce
Commercial Sales & Service Centre Two Paces West, 2727 Paces Ferry Road
595 Bay Street, 5th Floor Suite 1200
Toronto, Ontario M5G 2C2 Atlanta, GA 30339
Facsimile No.: 416-980-8582 Facsimile No.: 770-319-4827
Attention: Joan Lasley Attention: Kim Perrone
FEE PAYMENT LOCATION FOR CREDIT FEE PAYMENT LOCATION FOR CREDIT
EXTENSIONS TO MICRO CANADA: EXTENSIONS TO MICRO:
Canadian Imperial Bank of Commerce Canadian Imperial Bank of Commerce
Commercial Sales & Service Centre Two Paces West, 2727 Paces Ferry Road
595 Bay Street, 5th Floor Suite 1200
Toronto, Ontario M5G 2C2 Atlanta, GA 30339
Facsimile No.: 416-980-8582 Facsimile No.: 770-319-4827
Attention: Joan Lasley Attention: Kim Perrone
13
EXECUTED as of the date first stated in this First Amendment to
Canadian Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
6.7% $10,000,000 BANK OF MONTREAL
By /s/ Kanu Modi
--------------------------------------
Name: Kanu Modi
Title: Director
LENDING OFFICE FOR CREDIT EXTENSIONS LENDING OFFICE FOR CREDIT EXTENSIONS
TO MICRO CANADA: TO MICRO:
Bank of Montreal Bank of Montreal
First Canadian Place Suite 4900
24th Floor 601 South Figureroa Street
Toronto, ON M5X 1A1 Los Angeles, CA 90017
Facsimile No.: 416-867-5818 Facsimile No.: 213-239-0680
Attention: Stuart Brannan Attention: Craig Ingram
Director
FEE PAYMENT LOCATION FOR CREDIT FEE PAYMENT LOCATION FOR CREDIT
EXTENSIONS TO MICRO CANADA: EXTENSIONS TO MICRO:
Bank of Montreal Bank of Montreal
First Canadian Place Suite 4900
24th Floor 601 South Figureroa Street
Toronto, ON M5X 1A1 Los Angeles, CA 90017
Facsimile No.: 416-867-5818 Facsimile No.: 213-239-0680
Attention: Stuart Brannan Attention: Craig Ingram
Director
14
EXECUTED as of the date first stated in this First Amendment to
Canadian Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
6.7% $10,000,000 CREDIT LYONNAIS CANADA
By_______________________________________
Name:__________________________________
Title:_________________________________
By_______________________________________
Name:__________________________________
Title:_________________________________
CREDIT LYONNAIS LOS ANGELES BRANCH
By_______________________________________
Name:__________________________________
Title:_________________________________
LENDING OFFICE FOR CREDIT EXTENSIONS LENDING OFFICE FOR CREDIT EXTENSIONS
TO MICRO CANADA: TO MICRO:
Credit Lyonnais Canada Credit Lyonnais Los Angeles Branch
One Financial Place, Suite 2505 515 South Flower Street
One Adelaide Street East Suite 2200
Toronto, ON M5C 2V9 Los Angeles, CA 90071-2201
Facsimile No.: 416-202-6525 Facsimile No.: 213-623-3437
Attention: Helen Thomas Attention: Diane Scott
Vice President
Corporate Banking
FEE PAYMENT LOCATION FOR CREDIT FEE PAYMENT LOCATION FOR CREDIT
EXTENSIONS TO MICRO CANADA: EXTENSIONS TO MICRO:
Credit Lyonnais Canada Credit Lyonnais Los Angeles Branch
One Financial Place, Suite 2505 515 South Flower Street
One Adelaide Street East Suite 2200
Toronto, ON M5C 2V9 Los Angeles, CA 90071-2201
Facsimile No.: 416-202-6525 Facsimile No.: 213-623-3437
Attention: Helen Thomas Attention: Diane Scott
Vice President
Corporate Banking
15
EXECUTED as of the date first stated in this First Amendment to
Canadian Credit Agreement.
INITIAL
COMMITMENT
PERCENTAGE AMOUNT
6.7% $10,000,000 THE INDUSTRIAL BANK OF JAPAN (CANADA)
By /s/ Campbell McLeigh
--------------------------------------
Name: Campbell McLeigh
Title: Senior Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
ATLANTA AGENCY
By /s/ Koichi Hasegawa
--------------------------------------
Name: Koichi Hasegawa
Title: Senior Vice President and
Deputy General Manager
LENDING OFFICE FOR CREDIT EXTENSIONS LENDING OFFICE FOR CREDIT EXTENSIONS
TO MICRO CANADA: TO MICRO:
The Industrial Bank of Japan (Canada) The Industrial Bank of Japan, Limited
Box 29, Suite 1102 Atlanta Agency
100 Yonge Street One Ninety One Peachtree Tower
Toronto, ON M5C 2W1 Suite 3600
191 Peachtree Street, N.E.
Facsimile No.: 416-367-3452 Atlanta, GA 30303-1757
Attention: Campbell McLeish Facsimile No.: 404-524-8509
Vice President
Attention: James Masters
Vice President
FEE PAYMENT LOCATION FOR CREDIT FEE PAYMENT LOCATION FOR CREDIT
EXTENSIONS TO MICRO CANADA: EXTENSIONS TO MICRO:
The Industrial Bank of Japan (Canada) The Industrial Bank of Japan, Limited
Box 29, Suite 1102 Atlanta Agency
100 Yonge Street One Ninety One Peachtree Tower
Toronto, ON M5C 2W1 Suite 3600
191 Peachtree Street, N.E.
Facsimile No.: 416-367-3452 Atlanta, GA 30303-1757
Attention: Campbell McLeish Facsimile No.: 404-524-8509
Vice President
Attention: James Masters
Vice President
5
1,000
9-MOS
JAN-02-1999
JAN-04-1998
OCT-03-1998
94,476
0
2,274,214
50,751
2,258,959
4,807,996
469,359
165,100
5,488,326
2,990,158
0
0
0
1,394
1,282,169
5,488,326
15,814,183
15,814,183
14,810,993
15,468,801
12,878
0
51,700
285,949
113,996
171,953
0
0
0
171,953
1.24
1.15
