EXHIBIT 10.15

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of the
15th day of June, 2002, by and among SCANSOURCE, INC., a South Carolina
corporation (the “Borrower”), 4100 QUEST, LLC and CHANNELMAX, INC. (collectively
referred to herein as the “Guarantors”), BRANCH BANKING AND TRUST COMPANY OF
SOUTH CAROLINA, as Agent and a Bank, and FIFTH THIRD BANK, FIRST TENNESSEE BANK
NATIONAL ASSOCIATION and HIBERNIA NATIONAL BANK (collectively referred to herein
as the “Banks”).

 

R E C I T A L S:

 

The Borrower, the Guarantors, the Agent and the Banks have entered into a
certain Credit Agreement dated as of July 26, 2001 (referred to herein as the
“Credit Agreement”). Capitalized terms used in this Amendment which are not
otherwise defined in this Amendment shall have the respective meanings assigned
to them in the Credit Agreement.

 

The Borrower and the Guarantors have agreed: (A) to pledge to the Agent and
Banks: (1) 65% of the stock and other equity interests owned by the Borrower in
ScanSource Europe, S.A. and ScanSource Europe, Limited (collectively referred to
herein as the “European Subsidiaries”); and (2) all of their rights to loans,
advances or other claims owed to them by either or both of the European
Subsidiaries; (B) that any and all loans and advances made by the Borrower to
either or both of the European Subsidiaries shall be evidenced by written
promissory notes in form and content reasonably satisfactory to the Required
Banks (the “European Promissory Notes”); and (C) to deliver to the Agent the
original of such promissory notes, stock certificates and other evidence of
ownership of the Investments owned by the Borrower in the European Subsidiaries,
together with duly executed, undated endorsements in blank and such other
documentation and information as may be necessary to enable the Agent to realize
upon such collateral in accordance with applicable law, all as more fully set
forth herein.

 

The Borrower and Guarantors have requested the Agent and the Banks to amend the
Credit Agreement to modify certain provisions of the Credit Agreement as more
fully set forth herein. The Banks, the Agent, the Guarantors and the Borrower
desire to amend the Credit Agreement upon the terms and conditions hereinafter
set forth.

 

NOW, THEREFORE, in consideration of the Recitals and the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Guarantors, the
Agent and the Banks, intending to be legally bound hereby, agree as follows:

 

SECTION 1. Recitals. The Recitals are incorporated herein by reference and shall
be deemed to be a part of this Amendment.

--------------------------------------------------------------------------------

SECTION 2. Amendments. The Credit Agreement is hereby amended as set forth in
this Section 2.

 

SECTION 2.01. Amendment to Section 1.01. Section 1.01 of the Credit Agreement is
amended to add the following new definitions:

 

“Net Point Guaranty” means the guaranty by the Borrower of the indebtedness of
Netpoint International, Inc. under: (i) Netpoint International, Inc.’s line of
credit in a maximum outstanding principal amount of $600,000; and (ii) accounts
payable owing to vendors of Netpoint International, Inc. which shall at no time
exceed $1,400,000; provided that in no event shall the maximum aggregate: (A)
obligations of Netpoint International, Inc. under the line of credit and
accounts payable described in (i) and (ii) above exceed $2,000,000 in the
aggregate; and (B) obligations of the Borrower under the Net Point Guaranty
exceed an amount equal to: (1) the aggregate principal obligations of Netpoint
International, Inc. under the line of credit and accounts payable described in
(i) and (ii) above, multiplied by (2) a percentage equal to the percentage of
stock and other equity interests of Net Point International, Inc. owned by the
Borrower.

 

“European Investment” means the Investment by Borrower in ScanSource Europe,
S.A. and ScanSource Europe, Limited (collectively the “European Subsidiaries”)
which Investment (including, without limitation, any and all: (i) equity
investments by the Borrower in the European Subsidiaries; (ii) loans and
advances made by the Borrower to either or both of the European Subsidiaries;
and (iii) obligations of either or both of the European Subsidiaries under
accounts payable owing to inventory suppliers Guaranteed by the Borrower) shall
not exceed $15,000,000 in the aggregate.

 

SECTION 2.02. Amendment to Section 5.02. Section 5.02 of the Credit Agreement is
amended and restated to read, in its entirety, as follows:

 

SECTION 5.02. Inspection of Property, Books and Records. The Borrower will (i)
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries in conformity with GAAP shall be made of
all dealings and transactions in relation to its business and activities; (ii)
permit, and will cause each Subsidiary of the Borrower and Guarantors to permit,
with reasonable prior notice which notice shall not be required in the case of
an emergency, the Agent or its designee, at the expense of the Borrower and
Guarantors, to perform periodic field audits and investigations of the Borrower,
the Guarantors and the Collateral, from time to time, provided that the field
examinations at the Borrower’s headquarters in Greenville, South Carolina shall
be no less frequent than once each fiscal year and the field examinations at the
Borrower’s distribution and warehouse facility in Memphis, Tennessee shall be no
less frequent than once each fiscal year; and (iii) permit, and will cause each
Subsidiary to permit, representatives of any Bank at such Bank’s expense prior
to the occurrence of an Event of Default and at the Borrower’s expense after the
occurrence of an Event of Default to visit and inspect any of their respective

 

2

--------------------------------------------------------------------------------

properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants. The
Borrower agrees to cooperate and assist in such visits and inspections, in each
case at such reasonable times and as often as may reasonably be desired.

 

SECTION 2.03. Amendment to Section 5.09. (a) Section 5.09 of the Credit
Agreement is amended and restated to read, in its entirety, as follows:

 

SECTION 5.09. Loans or Advances. No Loan Party nor any Subsidiary of a Loan
Party shall make loans or advances to any Person except: (i) loans or advances
to employees of a Loan Party or an Affiliate of a Loan Party that do not exceed
Five Hundred Thousand and No/100 Dollars ($500,000) in the aggregate outstanding
made in the ordinary course of business and consistently with practices existing
on December 31, 2000; (ii) deposits required by government agencies or public
utilities; (iii) loans or advances to the Borrower or any Guarantor that is a
Consolidated Subsidiary; (iv) Loans and Advances outstanding on the Closing Date
and set forth on Schedule 4-22; (v) loans or advances made as part of the
European Investment; and (vi) loans or advances not otherwise permitted under
this Section 5.09, which when aggregated with the total Investments made under
Section 5.10(ix) do not exceed Two Million Five Hundred Thousand Dollars
($2,500,000) in the aggregate outstanding; provided that after giving effect to
the making of any loans, advances or deposits permitted by clause (i), (ii),
(iii), (iv), (v) or (vi) of this Section, no Default shall have occurred and be
continuing.

 

SECTION 2.04. Amendment to Section 5.10. Section 5.10 of the Credit Agreement is
amended and restated to read, in its entirety, as follows:

 

SECTION 5.10. Investments. No Loan Party nor any Subsidiary of a Loan Party
shall make Investments in any Person except as permitted by Section 5.09 and
except Investments in (i) direct obligations of the United States Government
maturing within one year, (ii) certificates of deposit issued by a commercial
bank whose credit is satisfactory to the Agent, (iii) commercial paper rated A-1
or the equivalent thereof by Standard & Poor’s Corporation or P-1 or the
equivalent thereof by Moody’s Investors Service, Inc. and in either case
maturing within 6 months after the date of acquisition, (iv) tender bonds the
payment of the principal of and interest on which is fully supported by a letter
of credit issued by a United States bank whose long-term certificates of deposit
are rated at least AA or the equivalent thereof by Standard & Poor’s Corporation
and Aa or the equivalent thereof by Moody’s Investors Service, Inc., (v)
Investments by the Borrower in a Guarantor that is a Consolidated Subsidiary
made in the ordinary course of business and consistently with practices existing
on December 31, 2000, (vi) Investments existing on the Closing Date and set
forth on Schedule 4.22; (vii) Investments consisting of the Netpoint Guaranty,
subject to

 

3

--------------------------------------------------------------------------------

compliance with the conditions set forth in the definition of “Netpoint
Guaranty”; (viii) Investments consisting of the European Investment, subject to
compliance with the conditions set forth in the definition of “European
Investment”; and (ix) Investments not otherwise permitted under this Section
5.10, made in the ordinary course of business and consistently with practices
existing on December 31, 2000, which when aggregated with the aggregate
outstanding loans and advances made under Section 5.09(v) do not exceed
$2,500,000.

 

SECTION 2.05. Amendment to Section 5.11. Section 5.11 of the Credit Agreement is
amended and restated to read, in its entirety, as follows:

 

SECTION 5.11. Negative Pledge. No Loan Party nor any Subsidiary of a Loan Party
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:

 

(a) Liens existing on the date of this Agreement encumbering assets other than
Collateral securing Debt outstanding on the date of this Agreement in an
aggregate principal amount not exceeding $135,000,000, all of which are set
forth on Schedule 5.11;

 

(b) Liens for taxes, assessments or similar charges, incurred in the ordinary
course of business that are not yet due and payable or that are being contested
in good faith and with due diligence by appropriate proceedings;

 

(c) any Lien on any asset (other than Collateral) securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of acquiring
such asset and permitted under Section 5.29(c), provided that such Lien attaches
to such asset concurrently with the acquisition thereof;

 

(d) pledges or deposits made in the ordinary course of business to secure
payment of workers’ compensation, or to participate in any fund in connection
with workers’ compensation, unemployment insurance, old-age pensions or other
social security programs;

 

(e) Liens of mechanics, materialmen, warehousemen, carriers or other like liens,
securing obligations incurred in the ordinary course of business that are not
yet due and payable;

 

(f) good faith pledges or deposits made in the ordinary course of business to
secure performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, not in excess of twenty percent (20%) of the
aggregate amount due thereunder, or to secure statutory obligations, or surety,
appeal, indemnity, performance or other similar bonds required in the ordinary
course of business;

 

4

--------------------------------------------------------------------------------

(g) any Lien arising out of the refinancing, extension, renewal or refunding of
any Debt secured by any Lien permitted by any of the foregoing clauses of this
Section, provided that (i) such Debt is not secured by any additional assets,
and (ii) the amount of such Debt secured by any such Lien is not increased;

 

(h) encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially impairs the
use of such property by Borrower in the operation of its business, and none of
which is violated in any material respect by existing or proposed restrictions
on land use;

 

(i) any Lien on Margin Stock; and

 

(j) a Lien encumbering the inventory and accounts receivable of Netpoint
International, Inc. securing the indebtedness of Netpoint International, Inc.
under a line of credit to be used for working capital purposes by Netpoint
International, Inc. in a maximum principal amount not exceeding $600,000 at any
time.

 

(k) a Lien on an account receivable that arises by operation of law and secures
a performance bond obtained in the ordinary course of business relating to the
services performed or goods supplied that gave rise to such account receivable
provided that: (1) such Lien is limited to the account receivable arising from
the services performed or goods supplied that are the subject of such
performance bond; (2) the account receivable arising from the services performed
or goods supplied that are the subject of such performance bond is not included
within “Eligible Accounts”; and (3) the Agent is provided written notice of such
performance bond and corresponding account receivable.

 

(l) Liens securing the IR Bank and BB&T that are subject to the Intercreditor
Agreement;

 

(m) Liens securing the Agent and the Banks created or arising under the Loan
Documents. Notwithstanding anything contained in this Section 5.11 to the
contrary, no Loan Party or any Subsidiary of a Loan Party will create, assume or
suffer to exist any Lien on the Collateral except pursuant to Section 5.11(k)
and (l).

 

SECTION 2.06 Amendment to Section 5.29. Section 5.29 of the Credit Agreement is
amended and restated to read, in its entirety, as follows:

 

SECTION 5.29. Additional Debt. No Loan Party or Subsidiary of a Loan Party shall
directly or indirectly issue, assume, create, incur or suffer to exist any Debt
or the equivalent (including obligations under Capital Leases), except for: (a)
the Debt owed to the Banks, Swing Line Lender and Issuing

 

5

--------------------------------------------------------------------------------

Bank; (b) the Debt existing and outstanding on the Closing Date described on
Schedule 5.29; (c) Debt incurred and owing to Textron Financial Corporation and
IBM Credit Corporation for the purpose of financing all or any part of the cost
of acquiring inventory from such Person; (d) Guarantees included within the
Netpoint Guaranty, subject to compliance with the conditions set forth in the
definition of “Netpoint Guaranty”; (e) Guarantees of the European Subsidiaries’
accounts payable owing to inventory suppliers, subject to compliance with the
conditions set forth in the definition of “European Investment”; (f) Debt under
the IR Agreement; and (g) Debt not otherwise permitted under this Section 5.29,
the aggregate outstanding principal amount of which shall not, at any time,
exceed $5,000,000.00.

 

SECTION 3. Conditions to Effectiveness. The effectiveness of this Amendment and
the obligations of the Banks hereunder are subject to the following conditions,
unless the Required Banks waive such conditions:

 

(a) receipt by the Agent from each of the parties hereto of a duly executed
counterpart of this Amendment signed by such party;

 

(b) receipt by the Agent of the pledge agreements, stock certificates,
promissory notes, legal opinions and other matters set forth in Section 10;

 

(c) the fact that the representations and warranties of the Borrower and
Guarantor contained in Section 5 of this Amendment shall be true on and as of
the date hereof.

 

SECTION 4. No Other Amendment. Except for the amendments set forth above, the
text of the Credit Agreement shall remain unchanged and in full force and
effect. This Amendment is not intended to effect, nor shall it be construed as,
a novation. The Credit Agreement and this Amendment shall be construed together
as a single agreement. Nothing herein contained shall waive, annul, vary or
affect any provision, condition, covenant or agreement contained in the Credit
Agreement, except as herein amended, nor affect nor impair any rights, powers or
remedies under the Credit Agreement as hereby amended. The Banks and the Agent
do hereby reserve all of their rights and remedies against all parties who may
be or may hereafter become secondarily liable for the repayment of the Notes.
The Borrower and Guarantors promise and agree to perform all of the
requirements, conditions, agreements and obligations under the terms of the
Credit Agreement, as heretofore and hereby amended, the Credit Agreement, as
amended, and the other Loan Documents being hereby ratified and affirmed. The
Borrower and Guarantors hereby expressly agree that the Credit Agreement, as
amended, and the other Loan Documents are in full force and effect.

 

SECTION 5. Representations and Warranties. The Borrower and Guarantors hereby
represent and warrant to each of the Banks as follows:

 

(a) No Default or Event of Default, nor any act, event, condition or
circumstance which with the passage of time or the giving of notice, or both,
would constitute an

 

6

--------------------------------------------------------------------------------

Event of Default, under the Credit Agreement or any other Loan Document has
occurred and is continuing unwaived by the Banks on the date hereof.

 

(b) The Borrower and Guarantors have the power and authority to enter into this
Amendment and to do all acts and things as are required or contemplated
hereunder to be done, observed and performed by them.

 

(c) This Amendment has been duly authorized, validly executed and delivered by
one or more authorized officers of the Borrower and Guarantors and constitutes
the legal, valid and binding obligations of the Borrower and Guarantors
enforceable against them in accordance with its terms, provided that such
enforceability is subject to general principles of equity.

 

(d) The execution and delivery of this Amendment and the performance by the
Borrower and Guarantors hereunder do not and will not require the consent or
approval of any regulatory authority or governmental authority or agency having
jurisdiction over the Borrower, either European Subsidiary or either Guarantor,
nor be in contravention of or in conflict with the articles of incorporation,
bylaws or other organizational documents of the Borrower, either European
Subsidiary or Channelmax, Inc., the articles of organization or operating
agreement of 4100 Quest, LLC or the provision of any statute, or any judgment,
order or indenture, instrument, agreement or undertaking, to which the Borrower,
either European Subsidiary or any Guarantor is party or by which the assets or
properties of the Borrower, either European Subsidiary and Guarantors are or may
become bound.

 

SECTION 6. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement.

 

SECTION 7. Governing Law. This Amendment shall be construed in accordance with
and governed by the laws of the State of South Carolina.

 

SECTION 8. Effective Date. This Amendment shall be effective as of December 20,
2001.

 

SECTION 9. Amendment Fee. On the date of this Amendment, the Borrower hereby
agrees to pay to the Agent for the ratable account of each Bank (based upon its
Commitment on the date of this Amendment), an Amendment Fee equal to $25,000.

 

SECTION 10. Pledge Documentation. On or before June 30, 2002, the Borrower shall
grant to the Agent for the benefit of the Banks a first priority security
interest in 65% of the Capital Stock (or equivalent equity interests) owned by
the Borrower in the European Subsidiaries and 100% of all loans, advances and
other claims owed to the Borrower by either or both of the European Subsidiaries
pursuant to a pledge agreement in the form attached to this First Amendment as
Exhibit A. Any and all loans and advances made by the Borrower to either or both
of the European Subsidiaries shall be evidenced by a written promissory note in
form and

 

7

--------------------------------------------------------------------------------

content reasonably satisfactory to the Required Banks (the “European Promissory
Note”). The Borrower shall deliver to the Agent: (A) on or before June 30, 2002:
(1) the foregoing shares of Capital Stock together with stock powers undated and
executed in blank; (2) the original European Promissory Notes, together with a
duly undated endorsement in blank affixed thereto; and (3) the items specified
in Sections 3.01(c), (f) and (n) of the Credit Agreement modified appropriately
to refer to the pledge agreement; and (B) on or before July 15, 2002: (1) a
legal opinion in form and content reasonably satisfactory to the Agent from
legal counsel licensed in the United Kingdom and Belgium confirming that the
pledge agreement constitutes a valid, enforceable and perfected first priority
security interest in and lien upon the Collateral (as defined in the Pledge
Agreement) under the applicable laws of the United Kingdom and Belgium; and (2)
such other documentation and information as the Agent may reasonably request to
evidence the first priority lien and security interest in the Collateral (as
defined in the pledge agreement) and to enable the Agent to realize upon such
Collateral in accordance with the terms of the pledge agreement and applicable
law.

 

[The remainder of this page intentionally left blank.]

 

8

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed and delivered, or have
caused their respective duly authorized officers or representatives to execute
and deliver, this Amendment as of the day and year first above written.

 

SCANSOURCE, INC.    

By:

 

/s/    ILLEGIBLE

--------------------------------------------------------------------------------

  (SEAL)

Title:

 

CFO

--------------------------------------------------------------------------------

    4100 QUEST, LLC        

By:

  ScanSource, Inc., its sole member            

By:

 

/s/    ILLEGIBLE

--------------------------------------------------------------------------------

  (SEAL)        

Title:

 

CFO

--------------------------------------------------------------------------------

    CHANNELMAX, INC.    

By:

 

/s/    ILLEGIBLE

--------------------------------------------------------------------------------

  (SEAL)

Title:

 

VP

--------------------------------------------------------------------------------

   

 

[Remainder of this page intentionally left blank]

 

9

--------------------------------------------------------------------------------

BRANCH BANKING AND TRUST COMPANY OF SOUTH CAROLINA, as Agent, Issuing Bank and
as a Bank          

By:

 

/s/    ILLEGIBLE

--------------------------------------------------------------------------------

  (SEAL)

Title:

 

SVP

--------------------------------------------------------------------------------

   

 

[Remainder of this page intentionally left blank]

 

10

--------------------------------------------------------------------------------

FIFTH THIRD BANK

             

By:

 

/s/    ILLEGIBLE

--------------------------------------------------------------------------------

 

(SEAL)

Title:

 

Financial Services Officer

--------------------------------------------------------------------------------

   

 

[Remainder of this page intentionally left blank]

 

11

--------------------------------------------------------------------------------

FIRST TENNESSEE BANK NATIONAL ASSOCIATION          

By:

 

/s/    ILLEGIBLE

--------------------------------------------------------------------------------

 

(SEAL)

Title:

 

Snr Vice President

--------------------------------------------------------------------------------

   

 

[Remainder of this page intentionally left blank]

 

12

--------------------------------------------------------------------------------

HIBERNIA NATIONAL BANK          

By:

 

/s/    ILLEGIBLE

--------------------------------------------------------------------------------

 

(SEAL)

Title:

 

Portfolio Mgr.

--------------------------------------------------------------------------------

   

 

13