#30097112.5
CONFORMED COPY
SECOND AMENDMENT
TO
SENIOR NOTE PURCHASE AGREEMENT
Arrow Electronics, Inc.
$75,000,000 8.29% Senior Secured Notes Due 2000
THIS SECOND AMENDMENT (the "Amendment") to those
several Senior Note Purchase Agreements each dated as of
December 29, 1992, as amended by the First Amendment to
Senior Note Purchase Agreements dated as of December 22,
1993 (collectively referred to herein as the "Purchase
Agreements" and individually as a "Purchase Agreement"), is
made as of April 24, 1995, by and among ARROW ELECTRONICS,
INC., a New York corporation (the "Company"), and the
several Holders of the Senior Notes (hereinafter, together
with their respective successors and assigns, collectively
called the "Holders" and individually a "Holder").
Capitalized terms used herein without definition shall have
the respective meanings ascribed to such terms in the
Purchase Agreements, as hereby amended.
WHEREAS, the Holders and the Company are parties
to the Purchase Agreements, pursuant to which the Purchasers
were issued, in the respective amounts set forth opposite
their names on Schedule I thereto, $75,000,000 aggregate
principal amount of the Company's 8.29% Senior Secured
Notes Due 2000 (the "Senior Notes"); and
WHEREAS, the Company and the undersigned Holders,
constituting the Required Holders, desire to amend the
Purchase Agreements as provided herein, upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the terms and
conditions contained herein and of other good and valuable
consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Amendments to the Purchase Agreements.
Subject to the satisfaction of the conditions set forth in
Section 2 hereof, the Purchase Agreements are hereby amended
as follows:
(a) Section 2.02 of the Purchase Agreements
is hereby amended by (i) deleting the defined terms
"Permitted Investments" and "Restricted Payments" in
their entirety and by substituting therefor the
following definitions of "Permitted Investments" and
"Restricted Payments" and
(ii) adding thereto, in appropriate alphabetical order,
the following definitions of "Amendment No. 2",
"Amendment No. 2 Date", "Consolidated Cash Flow",
"Consolidated Cash Interest Expense", "Xxxxxxx
Electronic" and "Subordinated Guaranty":
"Amendment No. 2" means Amendment No. 2 to
this Agreement, dated as of April 24, 1995.
"Amendment No. 2 Date" means the date on
which Amendment No. 2 was executed and delivered by
each of the parties thereto.
"Consolidated Cash Flow" means, for any period
of four consecutive full fiscal quarters of the Company
and its Subsidiaries, Consolidated Net Income for such
period plus (a) all amounts deducted in determining such
Consolidated Net Income on account of income taxes,
interest expense, depreciation and amortization, minus
(b) all amounts included in determining such Consolidated
Net Income on account of non-cash equity earnings of
unconsolidated Affiliates, plus (c) all amounts excluded
in determining such Consolidated Net Income on account of
cash distributions received by the Company from
unconsolidated Affiliates, minus (d) an amount equal to
the excess of the net income of Xxxxxxx Electronic for
such period over any cash distributions received by the
Company from Xxxxxxx Electronic during such period, all
as determined with respect to such period for the Company
and its Subsidiaries.
"Consolidated Cash Interest Expense" means,
with respect to any period, for the Company and its
Subsidiaries on a consolidated basis in accordance with
GAAP, the aggregate amount of cash interest (including,
without limitation, that portion of rental payments
pursuant to Capitalization Lease Obligations which would,
in accordance with GAAP, be categorized as "interest
expense", but excluding non-cash finance charges).
"Permitted Investments" means: (i) extensions
of trade credit in the ordinary course of business; (ii)
Investments in Cash Equivalents; (iii) loans and advances
to employees of the Company or its Subsidiaries for (a)
travel, entertainment and relocation expenses in the
ordinary course of business and (b) other purposes in an
aggregate amount not exceeding $1,500,000 at any one
time; (iv) intercompany charges for corporate and other
services allocated to Subsidiaries of the Company in the
ordinary course of business; (v) extensions of credit by
the Company to Capstone evidenced by notes pledged, pari
passu, to the Banks and to the Holders; (vi) Investments
made to acquire a Person thereupon becoming a Subsidiary
and Investments in Subsidiaries to purchase additional
equity in such Subsidiary at fair market value
(determined in good faith by the Board of Directors of
the Company); (vii) other loans, Guarantees or advances
to Subsidiaries; (viii) Investments by the Company in the
Schuylkill facility located at Plant City, Florida,
provided that the proceeds of any such Investments are
used by Schuylkill solely to pay remediation or other
environmental costs; and (ix) Investments not otherwise
permitted by clauses (i)-(viii) above in an aggregate
amount not exceeding (as to the Company and all such
Subsidiaries) $1,000,000 at any one time.
"Restricted Payments" shall mean (i) the
declaration or payment of any dividends or distributions
on any shares of any class of capital stock of the
Company or a Subsidiary of the Company to Persons (other
than the Company or a wholly-owned Subsidiary of the
Company), except dividends payable solely by the issuance
of shares of any capital stock of the Company which is
not mandatorily redeemable or otherwise subject to
mandatory repurchase, retirement, call, put or other
reacquisition (or acceleration of any thereof) prior to
or on the maturity date of the Senior Notes, (ii) the
application of any property or assets of the Company or
its Subsidiaries to the purchase or acquisition,
redemption or other retirement of,
or setting apart of any sum for the payment of any
dividends or distributions on, or for the purchase,
redemption or other retirement of, or the making of any
other distribution by reduction of capital stock or
otherwise in respect of any class of capital stock of the
Company or any Subsidiary of the Company from any Person
other than the Company or a wholly-owned Subsidiary of
the Company and (iii) any Investment other than a
Permitted Investment.
"Xxxxxxx Electronic" means Xxxxxxx Electronic
Handelsgesellschaft mbH & Co., a German corporation.
"Suppliers Guaranty" means an unsecured
Guaranty by the Company of contractual obligations of a
Subsidiary for goods sold or services rendered to such
Subsidiary on payment terms requiring payment within 60
days.
(b) Subsection 7.01(g) of the Purchase
Agreements is hereby amended by deleting such Section in
its entirety and by substituting therefor the following:
"(g) [Intentionally Omitted]"
(c) Subsection 8.01(j) of the Purchase
Agreements is hereby amended by (i) by deleting the cross
reference to Section 8.08(iv) in Subclause (z) of such
Subsection and by substituting therefor a cross reference
to Section 8.08(v) and (ii) by deleting the language
following Subclause (z) of such Subsection in its
entirety and by substituting therefor the following:
"does not exceed (A) from the Amendment No. 2
Date through and including December 31, 1996, 15% of
Consolidated Net Worth and (B) on or after January 1,
1997, 20% of Consolidated Net Worth;"
(d) Section 8.04 of the Purchase Agreements is
hereby amended by deleting such Section in its entirety
and by substituting therefor the following:
"Section 8.04. Restricted Payments. The
Company will not, and will not permit any of its
Subsidiaries to, make any Restricted Payments, except
that the Company and its Subsidiaries may make Restricted
Payments in an aggregate amount not to exceed the sum of
(x) $20,000,000 plus (y) 30% of cumulative Consolidated
Net Income from Operations from October 1, 1993 to the
date of such Restricted Payment or, if such cumulative
Consolidated Net Income from Operations is a deficit
figure, then minus 100% of such deficit (provided that
Consolidated Finance Charges attributable to any
Subsidiary shall not be deducted in the determination of
Consolidated Net Income for purposes of calculating
Consolidated Net Income from Operations to the extent
that the net earnings of such Subsidiary have been
excluded from the calculation of Consolidated Net Income
from Operations pursuant to clause (e) of the definition
of such term), provided that the amount determined
pursuant to this clause (y), if a negative number, shall
not reduce the amount available pursuant to clause (x),
plus (z) 100% of the Net Proceeds from sales of capital
stock of the Company which is not mandatorily redeemable
or otherwise subject to mandatory repurchase, retirement,
call, put or other reacquisition (or acceleration of any
thereof) prior to or on the maturity date of the Senior
Notes."
(e) Section 8.08 of the Purchase Agreements is
hereby amended by deleting such Section in its entirety and
by substituting therefor the following:
"Section 8.08. Limitation on Guarantees. The
Company will not, and will not permit any of its
Subsidiaries to, assume, guarantee, endorse, contingently
agree to purchase or otherwise become liable upon the
obligation of any Person except: (i) the Subsidiary
Guarantees, (ii) Guarantees of purchase orders made in the
ordinary course of business, (iii) Guarantees by the Company
of contractual obligations of any Subsidiary, provided that
such Guarantees are unsecured and are expressly subordinated
(on terms substantially similar to those set forth in the
Subordination Agreement included in the Security Documents)
to the obligations of the Company under this Agreement, the
Other Agreements and the Senior Notes, (iv) Suppliers
Guarantees, (v) other Guarantees by the Company or any of
its Subsidiaries of contractual obligations of any
Subsidiary which would not be permitted pursuant to
subclauses (iii) or (iv) hereof, so long as, immediately
after giving effect to any such Guarantee, the Company
continues to be in compliance with Sections 8.01(j) and 8.04
and (vi) Guarantees by Subsidiaries of the Company not
otherwise prohibited under applicable provisions of this
Agreement."
(f) Section 8.09 of the Purchase Agreements is
hereby amended by deleting such Section in its entirety and
by substituting therefor the following:
"Section 8.09. Cash Flow Coverage. The Company
will not permit the ratio of Consolidated Cash Flow to
Consolidated Cash Interest Expense to be less than 3.00 :
1.00, measured on the last day of each fiscal quarter for
the period of four consecutive full fiscal quarters then
ended."
(g) Section 8.10 of the Purchase Agreements is
hereby amended by deleting such Section in its entirety and
by substituting therefor the following:
"Section 8.10. Fixed Charge Coverage Ratio. At
all times following the release of Collateral pursuant to
Section 8.15, the Company will not permit the ratio of EBIT
to Consolidated Finance Charges to be less than (i) from the
Amendment No. 2 Date through and including December 31,
1996, 2.00 : 1.00 and (ii) on and after January 1, 1997,
2.25 : 1.00."
(h) Section 8.11 of the Purchase Agreements is
hereby amended by deleting such Section in its entirety and
by substituting therefor the following:
"Section 8.11. [Intentionally Omitted]"
Conditions Precedent. As provided in Section 1
above, the amendments set forth in Section 1 shall become and be
effective upon the satisfaction of the following conditions:
(a) All corporate and other proceedings taken or
to be taken in connection with this Amendment and all
documents incident hereto shall be satisfactory in form and
substance to the Required Holders, and the Required Holders
shall have received all such counterpart originals or
certified or other copies of such documents as they may
reasonably request.
(b) The Company and the Required Holders shall
have duly executed counterparts of this Amendment and
delivered the same to the other parties hereto or their
representatives.
Effect of Amendment.
(a) It is hereby agreed that, except as
specifically provided herein, this Amendment does not in any
way affect or impair the terms, conditions and other
provisions of the Purchase Agreement or the obligations of
the Company thereunder, and all terms, conditions and other
provisions of the Purchase Agreements shall remain in full
force and effect except to the extent specifically amended
or modified pursuant to the provisions of this Amendment.
(b) Reference in the Purchase Agreements to "this
Agreement" (and indirect references such as "hereunder",
"hereby", "herein" and "hereof") shall be deemed to be
references to the Purchase Agreements as amended hereby.
Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall be deemed an
original, and all of which taken together shall be deemed to
constitute one and the same instrument.
Costs and Expenses. As provided in Section 10.02 of
the Purchase Agreements, the Company agrees to pay on demand all
fees, costs and expenses incurred by the Holders in connection
with the negotiation, preparation, execution and delivery of this
Amendment and all other documents executed pursuant to or in
connection herewith.
Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES
OF SUCH STATE).
Headings. Section headings are included herein for
convenience of reference only and shall not constitute a part of
this Amendment for any other purposes.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their respective duly
authorized officers on the date first above written.
ARROW ELECTRONICS, INC.
By /s/ XXXXXX X. XXXXXXX
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
and Chief Financial Officer
ZANDE & CO.
By /s/ XXXX X. XXXXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Partner
CIG & CO.
By /s/ XXXXXX XXXXX
-----------------------------
Name: Xxxxxx Xxxxx
Title: Partner
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By /s/ XXX X. XXXXX
-----------------------------
Name:Xxx X. Xxxxx
Title: Counsel
By /s/ XXXXXXXXXXX X. XXXXXXXXX
-----------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxxx
Title: Counsel
TEACHERS INSURANCE & ANNUITY
ASSOCIATION OF AMERICA
By /s/ WM. XXXXXX XXXXXXXX
-----------------------------
Name: Wm. Xxxxxx Xxxxxxxx
Title: Director-Private Placements
LIFE INSURANCE COMPANY OF GEORGIA By
Internationale Nederlanden
North America, Investment Centre, Inc.,
its Agent
By /s/ XXXX X. XXXXX
----------------------------
Name: Xxxx X. Xxxxx
Title: S.V.P. and Managing Director
SOUTHLAND LIFE INSURANCE COMPANY
By Internationale Nederlanden North
America, Investment Centre, Inc., its Agent
By /s/ XXXX X. XXXXX
----------------------------
Name: Xxxx X. Xxxxx
Title: S.V.P. and Managing Director
PEERLESS INSURANCE COMPANY
By Internationale Nederlanden North
America, Investment Centre, Inc., its Agent
By /s/ XXXX X. XXXXX
----------------------------
Name: Xxxx X. Xxxxx
Title: S.V.P. and Managing Director
CONSOLIDATED INSURANCE COMPANY
By Internationale Nederlanden North
America, Investment Centre, Inc., its Agent
By /s/ XXXX X. XXXXX
----------------------------
Name: Xxxx X. Xxxxx
Title: S.V.P. and Managing Director
