Item 1.01 Entry into a Material
Definitive Agreement.
On October 19, 2016 and October 21,
2016, Ingram Micro Inc. (“
Ingram Micro
”) entered into amendments to its revolving senior unsecured credit facility,
trade accounts receivable backed financing program and senior unsecured notes indentures in preparation of the consummation of
the transactions (the “
Merger
”) contemplated by the Agreement and Plan of Merger, dated February 17, 2016 (the
“
Merger Agreement
”), between Ingram Micro, Tianjin Tianhai Investment Company, Ltd. and GCL Acquisition, Inc.
The effectiveness of the amendments
summarized in this Current Report on Form 8-K is subject to the consummation of the Merger, in addition to other customary closing
conditions.
Revolving Senior Unsecured Credit
Facility
On October 19, 2016, Ingram Micro and
its subsidiary, Ingram Micro Luxembourg S.à r.l (together with Ingram Micro, “
Borrowers
”), entered into
Amendment No. 3 and Waiver (“
Amendment No. 3
”) to the Credit Agreement, dated as of September 28, 2011 (as amended,
supplemented or otherwise modified, the “
Credit Agreement
”), among Borrowers, the Lenders thereto, The Bank
of Nova Scotia, as the Administrative Agent, and certain other financial institutions party thereto.
Pursuant to Amendment No. 3, the Lenders
party to Amendment No. 3 waive prepayment of their loans as a result of the consummation of the Merger and agree to continue as
Lenders under Ingram Micro’s revolving senior unsecured credit facility, with their aggregate commitments reduced from $1.5
billion to $1.05 billion.
Amendment No. 3 also adds additional
restrictions to further limit Ingram Micro’s ability to make payments to its direct or indirect shareholders following consummation
of the Merger, including as Restricted Payments. Restricted Payments will generally be limited, in any given four quarter period,
to the lesser of $150.0 million and 50% of Ingram Micro’s Consolidated Adjusted Net Income if Ingram Micro’s Leverage
Ratio exceeds 2.00 to 1.00 for specified periods and 50% of Ingram Micro’s Consolidated Adjusted Net Income if Ingram Micro’s
Leverage Ratio is less than or equal to 2.00 to 1.00 for specified periods.
Amendment No. 3 also makes certain
amendments to the Credit Agreement’s financial covenants, including: (a) increasing the required Consolidated EBITDA to Consolidated
Interest Charges ratio from 2.75 to 1.00 to 4.00 to 1.0; (b) reducing the required Leverage Ratio from 4.00 to 1.0 to 3.80 to 1.0;
and (c) adding covenants related to maintaining (i) a specified ratio of Consolidated Liabilities to Consolidated Assets, (ii)
a specified amount of Consolidated Stockholders’ Equity and (iii) certain levels of Liquidity during the period over which
Ingram Micro may be required to make an offer to purchase its senior unsecured notes following consummation of the Merger.
Amendment No. 3 also limits the amount
of financing available to Ingram Micro under its trade accounts receivable financing programs to 35% of the aggregate trade accounts
receivable if Ingram Micro’s credit rating falls below certain levels.
Trade Accounts Receivable Backed
Financing Program
On October 21, 2016, Ingram Funding
Inc., Ingram Micro, The Bank of Nova Scotia, and the other purchasers and purchaser agents party thereto, entered into Omnibus
Amendment No. 4 (“
Omnibus Amendment No. 4
”) to the Receivables Purchase Agreement, dated as of April 26, 2010
(as amended, supplemented or otherwise modified, the “
Receivables Purchase Agreement
”) and the Receivables Sale
Agreement, dated as of April 26, 2010 (as amended, supplemented or otherwise modified, the “
Receivables Sale Agreement
”).
Pursuant to Omnibus Amendment No. 4,
the purchasers under the Receivables Purchase Agreement waive any Termination Event existing as a result of the consummation of
the Merger. In addition, Omnibus Amendment No. 4 amends the financial covenants in the Receivables Purchase Agreement to have substantially
the same terms as the financial covenants in the Credit Agreement, excluding the Liquidity covenant.
Senior Unsecured Notes Indentures
On October 21, 2016, Ingram Micro entered
into a First Supplemental Indenture (the “
2010 Supplemental Indenture
”) to the Indenture, dated as of August
19, 2010 (the “
2010 Indenture
”), and a First Supplemental Indenture (together with the 2010 Supplemental Indenture,
the “
Supplemental Indentures
”) to the Indenture, dated as of August 10, 2012 (together with the 2010 Indenture,
the “
Original Indentures
”), each between the Ingram Micro and Deutsche Bank Trust Company Americas, as trustee.
The Supplemental Indentures amend the
Original Indentures to include a restriction on Ingram Micro’s ability to make certain payments that is substantially consistent
with the restriction on Restricted Payments set forth in Amendment No. 3 to the Credit Agreement described above.
The foregoing description of Amendment
No. 3, Omnibus Amendment No. 4 and the Supplemental Indentures does not purport to be complete and is qualified in its entirety
by reference to the text of Amendment No. 3, Omnibus Amendment No. 4 and the Supplemental Indentures, copies of which are filed
as Exhibits 4.1, 4.2, 10.1 and 10.2, respectively, and incorporated by reference herein.
