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EXHIBIT 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated
as of November 14, 1996, and effective as of November 18, 1996, is among
DAISYTEK, INCORPORATED, a Delaware corporation (hereinafter referred to as
"Borrower"), DAISYTEK INTERNATIONAL INCORPORATED, a Delaware corporation
("Guarantor"), each of Borrower's Subsidiaries identified under the caption
"SUBSIDIARY GUARANTORS" on the signature pages of this Amendment or that,
pursuant to Section 8.1(n) of the Credit Agreement (as hereinafter defined),
become a "Subsidiary Guarantor" (individually, a "Subsidiary Guarantor," and,
collectively, the "Subsidiary Guarantors"), STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust ("State Street"), NBD BANK, a Michigan banking
corporation ("NBD"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national
banking association ("TCB"), as a lender and as administrative agent for
itself, Xxxxx Xxxxxx xxx XXX (Xxxxx Xxxxxx, XXX, TCB and any assignee lender
pursuant to Section 11.4A of the Credit Agreement being referred to,
collectively, as "Lenders"). All capitalized terms used herein and not
otherwise defined shall have the meaning ascribed to such terms in the Credit
Agreement.
RECITALS
WHEREAS, Borrower, Guarantor, certain Subsidiary Guarantors, State
Street and TCB entered into that certain Credit Agreement dated as of May 22,
1995, as amended by that certain First Amendment to Credit Agreement dated as
of April 15, 1996 (as so amended, the "Credit Agreement"), establishing a
revolving credit facility in the aggregate maximum principal amount of
$30,000,000, with funding commitments thereunder shared equally by TCB and
State Street; and
WHEREAS, Borrower, Guarantor, Subsidiary Guarantors and Lenders
desire to amend the Credit Agreement to increase the aggregate maximum
principal amount under such revolving credit facility from $30,000,000 to
$50,000,000, with funding commitments thereunder to be shared forty percent
(40%) by TCB, forty percent (40%) by State Street and twenty percent (20%) by
NBD;
NOW, THEREFORE, in consideration of the recitals set forth above,
the agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Borrower, Guarantor,
Subsidiary Guarantors and Lenders hereby agree as follows:
1. Amended Definitions. The following definitions in Section
1.1 of the Credit Agreement are amended to read in their entireties as follows:
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""Borrower's Account" means the account(s) maintained by Borrower
with TCB, as Agent, for the purposes of this Agreement."
""Committed Sum" means, with respect to the Loan Commitment, Twenty
Million Dollars ($20,000,000) with respect to TCB, Twenty Million Dollars
($20,000,000) with respect to State Street, and Ten Million Dollars
($10,000,000) with respect to NBD."
""Lender" or "Lenders" means, collectively, Texas Commerce Bank
National Association, a national banking association, State Street Bank and
Trust Company, a Massachusetts trust, NBD Bank, a Michigan banking corporation,
and any assignee lender pursuant to Section 11.4A of the Credit Agreement.
Notwithstanding such collective definition, the phrases "a Lender," "any of
Lenders," "each of Lenders" and similar phrases shall be singular references
and not collective references."
""Lender Funding Account" means the account maintained by Agent
with TCB for purposes of this Agreement."
""Loan Commitment" means Fifty Million Dollars ($50,000,000)."
""Notes" means, collectively, the promissory notes of Borrower,
dated as of the Closing Date and substantially in the form of Exhibit A, each
appropriately completed, duly executed and delivered to a Lender by Borrower
and payable to the order of such Lender in the principal amount of such
Lender's maximum Committed Sum, as such promissory notes may be modified or
extended from time to time, and any promissory note or notes issued in exchange
or replacement therefor."
""Pro Rata Part" or "Pro Rata," with respect to a Lender, means the
proportion that such Lender's Committed Sum bears to the aggregate Committed
Sums of all Lenders."
""Qualified Issuer" means any of Lenders and a commercial bank
having capital and retained earnings of at least $165,000,000."
""Subsidiary" means, with respect to any Person, any corporation,
association, partnership, joint venture, or other business or corporate entity,
enterprise or organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned fifty percent (50%) or more by such
Person. Without limiting the foregoing, with respect to Guarantor, on the
Second Amendment Closing Date a Subsidiary
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of Guarantor includes Borrower and the entities identified under
the caption "SUBSIDIARY GUARANTORS" on the signature pages of this
Amendment.
2. New Definition. The following definition is added to
Section 1.1 of the Credit Agreement, to read in its entirety as follows:
""Second Amendment Closing Date" means November 18, 1996,
being the effective date of the Second Amendment to Credit
Agreement among Borrower, Guarantor, Subsidiary Guarantors, Lenders
and Agent."
3. General Amendment. References in the Credit Agreement to
"either of Lenders" or "either Lender" are hereby amended to be references to
"any of Lenders" and "any Lender," respectively; references in the Credit
Agreement to "either or both of Lenders" or "either or both Lenders" are hereby
amended to be references to "any or all of Lenders" and "any or all Lenders,"
respectively. References in the Credit Agreement (and the exhibits thereto) to
TCB and State Street (whether or not using defined terms) are hereby amended to
be references to TCB, State Street, NBD and any assignee lender pursuant to
Section 11.4A of the Credit Agreement.
4. Amendment of Section 2.2. The first sentence of Section 2.2
of the Credit Agreement is amended to read in its entirety as follows:
"The Loan made by Lenders pursuant to this Article II shall be
evidenced by the Notes dated as of the Second Amendment Closing
Date and substantially in the form of Exhibit A."
5. Amendment of Section 2.4. The first paragraph of Section
2.4 of the Credit Agreement is amended to read in its entirety as follows:
"Section 2.4 Borrowing and Rate Option Procedure. By no
later than noon Dallas, Texas time on a proposed Advance Date for
any Advance that Borrower desires to accrue interest at the Base
Rate, and by no later than noon Dallas, Texas time three (3)
Eurodollar Business Days prior to a proposed Advance Date for any
Advance that Borrower desires to accrue interest at the Adjusted
Eurodollar Rate, Borrower shall submit to Agent an Advance Request
with respect to the Loan that specifies (a) the requested Advance
Date and (b) the amount of the requested Advance, (c) whether the
Advance shall accrue interest at the Base Rate or the Adjusted
Eurodollar Rate, and (d) if the Advance is to accrue interest at an
Adjusted Eurodollar Rate, the requested Eurodollar Interest Period,
whereupon Agent shall promptly notify Lenders thereof. Each
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Advance accruing interest at the Base Rate shall be in the amount
of $100,000 or more; each Advance accruing interest at an Adjusted
Eurodollar Rate shall be an integral multiple of $100,000. As
early as possible on the Advance Date specified in such Advance
Request, each Lender shall cause to be deposited to the Lender
Funding Account in immediately available funds an amount equal to
its respective Pro Rata Part of such requested Advance. Each
Lender's obligation to make such a deposit in such amount shall
exist whether or not the other Lenders satisfy their obligation to
make such deposit. No Lender shall have a duty whatsoever to
satisfy another Lender's obligation to make such deposits. Upon
the fulfillment of the applicable conditions set forth herein,
including Article VI, Agent shall make the funds deposited in the
Lender Funding Account available to Borrower no later than Agent's
close of business on the Advance Date by debiting the Lender
Funding Account and crediting Borrower's Account in immediately
available funds.
Unless Agent shall have been notified by a Lender prior to
the time of an Advance that such Lender does not intend to make
available to Agent such Lender's Pro Rata Part of such Advance,
Agent may (but shall be under no obligation to) assume that such
Lender has made such Pro Rata Part available to Agent on or before
the time of such Advance and Agent may (but again shall be under no
obligation to), in reliance on such assumption, make available to
Borrower such Lender's Pro Rata Part. If such Pro Rata Part is not
in fact made available to Agent by such Lender, then Agent shall be
entitled to recover such Pro Rata Part on demand from such Lender.
If such Lender does not pay such Pro Rata Part forthwith upon
Agent's demand therefor, then Agent shall promptly notify Borrower
and Borrower shall immediately pay such Pro Rata Part to Agent.
Agent shall also be entitled to recover on demand from such Lender
or Borrower, as the case may be, interest on such Pro Rata Part in
respect of each day from the date such Pro Rata Part was made
available by Agent to Borrower until the date such Pro Rata Part is
recovered by Agent, at a rate per annum equal to (a) if recovered
from such Lender, the Federal Funds Effective Rate, and (b) if
recovered from Borrower, the rate of interest applicable to the
respective Advance. Nothing in this Section 2.4 shall be deemed to
relieve any Lender from its obligation to make Advances hereunder
or to prejudice any rights that Borrower may have against a Lender
as a result of any failure by such Lender to make its Pro Rata Part
of Advances hereunder."
6. Amendment of Article III. Article III of the Credit
Agreement is amended to read in its entirety as follows:
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"ARTICLE III
Letters of Credit
Section 3.1 Commitment to Issue Letters of Credit. Subject to
the terms and conditions of this Agreement, including, without limitation,
Section 3.2, Lenders (acting through any Lender or Lenders designated by
Borrower from time to time, as issuer) agree to issue, at such times as
Borrower may request from the Closing Date to the Loan Maturity Date,
commercial and standby letters of credit for the account of any Daisytek
Corporation; provided, however, that (a) the aggregate amount of the Letters of
Credit issued by Lenders at any one time outstanding shall not exceed
$2,000,000, and (b) the aggregate amount of the Letters of Credit, plus the
principal amount of the Loan, at any one time outstanding, shall not exceed the
lesser of (x) the Borrowing Base and (y) the Loan Commitment.
If a Letter of Credit hereunder is issued other than by TCB, then
the issuing Lender shall promptly (and in any event within one Business Day)
notify Agent thereof and include with such notice Borrower's application for
such Letter of Credit, a photocopy of the issued Letter of Credit and a
statement signed by such issuing Lender acknowledging that such Letter of
Credit was issued hereunder. The obligation of Lenders (acting through any
Lender or Lenders designated by Borrower from time to time, as issuer) to issue
Letters of Credit hereunder shall expire at Agent's close of business in
Dallas, Texas on the Loan Maturity Date. Each Letter of Credit, as the same
may be amended or extended from time to time, shall expire no later than the
Loan Maturity Date. All Letters of Credit issued hereunder shall be in the
issuing Lender's standard form or in such other form as is mutually agreed upon
by Borrower and Lenders.
Section 3.2 Conditions to Issuance of a Letter of Credit. In
addition to the conditions stated elsewhere herein, Lenders (acting through any
Lender or Lenders designated by Borrower from time to time, as issuer) will not
be obligated to issue a Letter of Credit unless:
(a) Compliance with Terms of Agreement. Each Daisytek
Corporation has complied with all of the terms of this Agreement to
be complied with by it, including, without limitation, the
conditions to an Advance set forth in Section 6.2.
(b) Application for Letter of Credit. By no later than
two (2) Business Days prior to the proposed
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issuance date of a Letter of Credit (or any shorter period to which
the proposed issuing Lender may agree) Borrower has delivered to
such issuing Lender an application for Letter of Credit pertaining
to such Letter of Credit, executed by a Responsible Officer of
Borrower.
(c) Issuance Fee. The issuance fee payable by Borrower
pursuant to Section 3.5 shall have been paid.
Section 3.3 Issuance of a Letter of Credit. Subject to the
terms and conditions set forth in Section 3.1 and 3.2, Lenders (acting through
any Lender or Lenders designated by Borrower from time to time, as issuer)
shall make the Letter of Credit available for the account of Borrower at the
issuing Lender's principal office not later than 3:00 p.m. Dallas, Texas time
on the issuance date.
Section 3.4 Presentment. An issuing Lender shall immediately
notify Borrower of the presentment for payment of a draft under a Letter of
Credit issued by Lenders (acting through such issuing Lender) and immediately
provide Borrower with a copy of any documents accompanying such presentment.
Except with respect to a variation between documents required by such Letter of
Credit and documents accepted by Lenders (acting through such issuing Lender),
the failure of such issuing Lender to provide such notice and copies shall not
effect Borrower's obligations hereunder. Borrower shall reimburse Lenders
(acting through such issuing Lender) on the same day that payment is made under
such Letter of Credit. If payment is made under a Letter of Credit and
Borrower does not reimburse such issuing Lender on the date such payment is
made, then such payment shall be deemed to be an Advance and accrue interest at
the Base Rate.
The obligation of Borrower to make payments to Lenders (acting
through an issuing Lender), as provided in this Article III, with respect to
Letters of Credit shall be irrevocable and shall not be subject to any
qualification or exception, including, without limitation, any of the following
circumstances:
(a) Any lack of validity or enforceability of this
Agreement or any of the Loan Documents; or
(b) The existence of any claim, set off, defense or
other right that a Daisytek Corporation may have at any time
against a beneficiary named in a Letter of Credit or any transferee
of any Letter of Credit (or any Person for whom any such transferee
may be acting), any
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of Lenders or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying
transactions between a Daisytek Corporation and the beneficiary
named in any Letter of Credit); or
(c) Any draft, certificate or any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient (but conforming on its face to
the requirements of the applicable Letter of Credit) or any
statement therein being untrue or inaccurate in any respect; or
(d) The surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents; or
(e) The occurrence of any Event of Default.
Section 3.5 Letter of Credit Fees. For each Letter of Credit
issued hereunder, Borrower shall pay to Agent (a) for the account of Lenders
and for so long as such Letter of Credit is outstanding, a per annum fee equal
to (i) the undrawn amount of such Letter of Credit multiplied by (ii) the
Applicable Margin, and (b) for the issuing Lender's own account, a one-time fee
payable upon the issuance thereof of the greater of (i) 0.00125 multiplied by
the principal amount of such Letter of Credit and (ii) $250.00. The per annum
fee shall be payable on each Quarterly Payment Date, in arrears. If the
Applicable Margin shall change during a period for which the per annum fee is
calculated, then such calculation shall be made based on each such Applicable
Margin and the number of days in such period during which each such Applicable
Margin was in effect. In addition, Borrower agrees to pay to the issuing
Lender all other document handling, administrative and other similar charges
normally charged by such issuing Lender in connection with letters of credit.
Section 3.6 Release. Each Daisytek Corporation shall not hold
any Lender responsible for, and hereby releases each Lender from, liability in
connection with:
(a) Any delay in giving any notice to Borrower of the
presentment of a Letter of Credit for payment; or
(b) The truth or accuracy of any statements made in any
documents required by a Letter of Credit to be delivered to an
issuing Lender; or
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(c) Any failure of the signature on any draft or other
documents required to be furnished to be that of an authorized
person or to be genuine.
Each Daisytek Corporation waives any right to object to and
ratifies the action of the issuing Lender of any Letter of Credit,
in the case of any variation between documents required by such
Letter of Credit or instructions of Borrower, and documents
accepted by Lenders (acting through such issuing Lender) as to
which Borrower has notice, unless promptly upon receipt of the
documents or of knowledge of the variation and prior to funding by
Lenders (acting through such issuing Lender), Borrower sends notice
of objection in writing to Lenders."
7. Amendment of Section 8.2(m). Section 8.2(m) of the Credit
Agreement is amended to read in its entirety as follows:
"(m) Limitations on Funded Debt. No Daisytek Corporation
shall permit, as of any date, the creation, incurrence, assumption
or sufferance to exist of Funded Debt of such corporation, other
than (a) the Obligations, (b) Funded Debt existing on the Closing
Date and fully described in the Initial Financial Statements (other
than the Funded Debt referred to in Footnote 2 to the Consolidated
financial statements of Guarantor included in the Prospectus as the
revolving line of credit agreement with commercial banks), (c)
Funded Debt secured as permitted by Section 8.2(a), (d) unsecured
Funded Debt of up to Ten Million Dollars ($10,000,000) to a Lender
incurred under a money market line of credit, and (e) unsecured
Funded Debt of such Daisytek Corporation which, together with the
Funded Debt pursuant to this clause (e) of all other Daisytek
Corporations, does not exceed Five Million Dollars ($5,000,000)."
8. Amendment of Section 8.2(n). Section 8.2(n) of the Credit
Agreement is amended to read in its entirety as follows:
"(n) Factoring. No Daisytek Corporation will permit
Working Capital of Canada, Inc., Working Capital of America, Inc.
and any other Daisytek Corporation to acquire accounts receivable
in excess of an aggregate face value of Three Million Dollars
($3,000,000), all of which shall arise from the retail sale of
merchandise sold at wholesale by a Daisytek Corporation."
9. Amendment of Section 9.1. Section 9.1 of the Credit
Agreement, and the title of Article IX of the Credit Agreement appearing
thereabove, are amended to read in their entirety as follows:
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"Agreements Between Agent and Lenders, and Between Lenders
Section 9.1 Appointment. Lenders hereby irrevocably
appoint Agent as agent hereunder, and irrevocably authorize Agent
to act as the agent of Lenders hereunder, and Agent agrees to act
as such, upon the conditions contained in this Article IX. Agent
shall not have or be deemed to have a fiduciary relationship with
any of Lenders by reason of this Agreement. This Agreement shall
not create, and shall not be deemed to create, a relationship of
partnership or joint venture between TCB, either for itself, as
Agent or both, and any other Lender or Lenders."
10. Amendment of Section 9.18. Section 9.18 of the Credit
Agreement is amended to read in its entirety as follows:
"Section 9.18 Required Consent. Notwithstanding Section
11.1, actions undertaken by Lenders with respect to this Agreement,
such as entering into an amendment or supplement to this Agreement
or granting a temporary waiver from a provision of this Agreement,
require the consent of Lenders holding at least fifty- one percent
(51%) of the total Committed Sum; provided, however, that (a) no
modification, supplement or waiver shall, unless by an instrument
signed by all Lenders or by Agent acting with the consent of all
Lenders: (i) increase, or extend the term of any of, the Loan
Commitment, or extend the time or waive any requirement for the
reduction or termination of any of the Loan Commitment, (ii) extend
the date fixed for the payment of principal of or interest on the
Loan (or any portion thereof) or any fee hereunder, (iii) reduce
the amount of any such payment of principal, (iv) reduce the rate
at which interest is payable thereon or any fee is payable
hereunder, (v) alter the rights or obligations of Borrower to
prepay the Loan (or any portion thereof), (vi) alter the terms of
this Section 9.18, (vii) otherwise modify in any other manner the
number or percentage of Lenders required to make any determinations
or waive any rights hereunder or to modify any provision hereof,
(viii) waive any of the conditions precedent set forth in Section
6.2, or (ix) release Guarantor or any Subsidiary Guarantor from its
Guaranty (except that Agent is authorized to release the Guaranty
of any Subsidiary Guarantor being sold in a transaction consented
to by Lenders holding at least fifty-one percent (51%) of the total
Committed Sum), (b) any modification or supplement of this Article
IX shall required Agent's prior written consent. The immediately
foregoing sentence is subject to (a) Agent's powers and rights
specifically delegated or granted to it in this Agreement (and
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such powers as are reasonably incidental thereto) and (b) Section
9.5 (in respect of a Potential Event of Default or an Event of
Default)."
11. Amendment of Section 11.3. Lenders' addresses as set forth
in Section 11.3 of the Credit Agreement are amended to read in their entirety
as follows:
"Texas Commerce Bank National Association
0000 Xxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx, Senior Vice President
Telecopy: 000-000-0000
State Street Bank and Trust Company
000 Xxxxxxxx Xxxxxx - X0
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx St. Xxxx
Telecopy: 000-000-0000
NBD Bank
000 Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxxxx
Telecopy: 000-000-0000
As to any Lender who becomes such pursuant to Section 11.4A,
to such Lender at its address given to Agent."
12. Amendment of Exhibit A, etc. Exhibit A of the Credit
Agreement is amended in its entirety to be in the form of Exhibit A attached to
this Amendment. All references to Exhibit A-1 are deleted.
13. Conditions to Effectiveness. The effectiveness of this
Amendment is conditioned upon the prior receipt by Agent of the documentation
and fees set forth below:
(a) Certificates. A certificate of the Secretary of
each Daisytek Corporation, dated as of the Second Amended Closing
Date, to the effect that, except for an increase in the number of
authorized shares of common stock of Guarantor, no changes have
occurred to the certificates of incorporation (and other equivalent
charter documents) and by-laws of the Daisytek Corporations, and no
changes have occurred in the incumbency of officers of the Daisytek
Corporations authorized to execute or attest any of the Loan
Documents, in each case since the Closing Date, except as expressly
described in such certificate;
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(b) Resolutions. Copies of resolutions of the Board of
Directors of each Daisytek Corporation, satisfactory to Lenders,
approving the execution and delivery of this Amendment and such of
the other Loan Documents to which such corporation is a party and
authorizing the performance of the obligations of such corporation
contemplated in this Amendment and in such other Loan Documents,
accompanied by a certificate of the Secretary of such corporation,
dated as of the Second Amendment Closing Date, that such copies are
complete and correct copies of resolutions duly adopted at a
meeting of such Board of Directors, and that such resolutions have
not been amended, modified or revoked in any respect, and are in
full force and effect as of the Second Amendment Closing Date;
(c) Other Certificates. Certificates of each Daisytek
Corporation's existence, good standing and qualification to do
business, issued by appropriate officials in any state in which
such corporation is incorporated, owns property or otherwise
qualified, or required to qualify, to do business;
(d) Notes. The Notes, duly executed;
(e) Guaranties. A Guaranty or Guaranties of Guarantor
and the Subsidiary Guarantors in favor of Agent for the benefit of
Lenders, duly executed by Guarantor and the Subsidiary Guarantors
and substantially in the form of Exhibit B to the Credit Agreement
(but with such appropriate changes in date, recitals and identity
of the guarantor(s) and beneficiaries thereunder as Lenders may
reasonably require);
(f) Opinion of Counsel. An executed opinion of Xxxxx &
Samson, P.C., Roseland, New Jersey, counsel to the Daisytek
Corporations, dated as of the Second Amendment Closing Date and in
form and substance satisfactory to Lenders and their counsel;
(g) Other Documents. Any and all other documents or
certificates reasonably requested by a Lender in connection with
the execution of this Amendment; and
(h) Fee. The fee agreed to by Borrower or Guarantor
pursuant to Agent's letter of even date herewith, duly acknowledged
by Borrower or Guarantor."
14. Other Documents. Borrower shall provide such other
documents incidental and appropriate to this Amendment as Agent or Agent's
counsel may reasonably request, and all such documents being in form and
substance reasonably satisfactory to Agent.
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15. Terms of Agreement. Except as expressly amended by this
Amendment, the Credit Agreement is and shall be unchanged.
16. Amounts Outstanding. Lenders shall by appropriate payments
between or among them transfer funds on the Second Amendment Closing Date such
that the balance of the Loan immediately prior to the effectiveness of this
Amendment shall, after giving effect to this Amendment, be held by Lenders in
Pro Rata Part.
17. Effect of Amendment. The Credit Agreement and any and all
other documents heretofore, now or hereafter executed and delivered pursuant to
the terms of the Credit Agreement are hereby amended so that any reference to
the Credit Agreement in the Credit Agreement or the other documents shall mean
a reference to the Credit Agreement as amended hereby.
18. Reaffirmation; No Default. Each Daisytek Corporation hereby
represents and warrants to Lenders that (a) the execution, delivery and
performance of this Amendment and any and all other Loan Documents executed and
delivered in connection herewith have been authorized by all requisite
corporate action on the part of such Daisytek Corporation and will not violate
the certificate of incorporation (or other charter documents) or bylaws of any
Daisytek Corporation, (b) except for an increase in the number of authorized
shares of common stock of Guarantor, neither the certificate of incorporation
(or other charter documents) nor bylaws of any Daisytek Corporation have been
amended or revoked since May 22, 1995, (c) the representations and warranties
contained in the Credit Agreement, as amended by this Amendment, and any other
Loan Document are true and correct on and as of the date hereof as though made
on and as of the date hereof, (d) no Event of Default has occurred and is
continuing and no event or condition has occurred that with the giving of
notice or lapse of time or both would be an Event of Default, and (e) each
Daisytek Corporation is in full compliance with all covenants and agreements
contained in the Credit Agreement, as amended hereby.
19. Enforceability. Each Daisytek Corporation hereby represents
and warrants that, as of the date of this Amendment, the Credit Agreement and
all documents and instruments executed in connection therewith are in full
force and effect and that there are no claims, counterclaims, offsets or
defenses to any of such documents or instruments.
20. GOVERNING LAW. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS OF THE STATE OF
TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA.
CHAPTER 15 OF TEXAS
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REVISED CIVIL STATUTES ARTICLE 5069 (WHICH REGULATES CERTAIN REVOLVING CREDIT
LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY TO THE CREDIT
AGREEMENT, AS AMENDED BY THIS AMENDMENT, OR THE NOTES.
21. Maximum Interest Rate. Regardless of any provisions contained
in this Amendment or in any other Loan Documents, Lenders shall never be deemed
to have contracted for or be entitled to receive, collect or apply as interest
on the Notes or otherwise any amount in excess of the maximum rate of interest
permitted to be charged by applicable law, and if Lenders ever receive, collect
or apply as interest any such excess, or if acceleration of the maturity of the
Notes or if any prepayment by Borrower results in Borrower having paid any
interest in excess of the maximum rate, such amount which would be excessive
interest shall be applied to the reduction of the unpaid principal balance of
the Notes for which such excess was received, collected or applied, and, if the
principal balances of Notes are paid in full, any remaining excess shall
forthwith be paid to Borrower. All sums paid or agreed to be paid to Lenders
for the use, forbearance or detention of the indebtedness evidenced by the
Notes and/or the Credit Agreement, as amended by this Amendment, shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until payment in full so
that the rate or amount of interest on account of such indebtedness does not
exceed the maximum lawful rate permitted under applicable law. In determining
whether or not the interest paid or payable under any specific contingency
exceeds the maximum rate of interest permitted by law, Borrower and Lenders
shall, to the maximum extent permitted under applicable law, (i) characterize
any non-principal payment as an expense, fee or premium, rather than as
interest; and (ii) exclude voluntary prepayments and the effect thereof; and
(iii) compare the total amount of interest contracted for, charged or received
with the total amount of interest which could be contracted for, charged or
received throughout the entire contemplated term of the Notes at the maximum
lawful rate under applicable law.
22. Counterparts. This Amendment may be separately executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Amendment.
23. WAIVER OF TRIAL BY JURY. EACH DAISYTEK CORPORATION WAIVES ANY
AND ALL RIGHTS THAT IT MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM
OR OTHER ACTION, OF ANY NATURE WHATSOEVER, RELATING TO OR ARISING OUT OF THIS
AMENDMENT, ANY OF THE OTHER LOAN DOCUMENTS OR THE OBLIGATIONS. EACH DAISYTEK
CORPORATION ACKNOWLEDGES THAT THE FOREGOING JURY TRIAL WAIVER IS A MATERIAL
INDUCEMENT TO EACH LENDER'S ENTERING INTO THIS AMENDMENT AND THE
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 13
14
OTHER LOAN DOCUMENTS AND THAT EACH LENDER IS RELYING ON SUCH WAIVER IN ITS
FUTURE DEALINGS WITH SUCH CORPORATION. EACH SUCH CORPORATION WARRANTS AND
REPRESENTS TO EACH LENDER THAT SUCH CORPORATION HAS REVIEWED THE FOREGOING JURY
TRIAL WAIVER WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, THE FOREGOING JURY TRIAL WAIVER MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
24. DTPA WAIVER. EACH DAISYTEK CORPORATION HEREBY WAIVES ALL
PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES CONSUMER PROTECTION ACT (TEX.
BUS. & COM. CODE Section 17.01 ET SEQ.), OTHER THAN Section 17.555 THEREOF,
AND REPRESENTS AND WARRANTS TO EACH LENDER THAT SUCH CORPORATION (A) HAS ASSETS
OF $5,000,000 OR MORE (EXCEPT THAT ONLY BORROWER, GUARANTOR AND DAISYTEK
(CANADA) INC. MAKE THE REPRESENTATION IN THIS CLAUSE (A)), (B) HAS KNOWLEDGE
AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE SUCH CORPORATION
TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTIONS CONTEMPLATED BY THIS
AMENDMENT, (C) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION RELATIVE
TO LENDERS, AND (D) HAS BEEN REPRESENTED BY LEGAL COUNSEL IN CONNECTION WITH
SUCH TRANSACTIONS.
25. OTHER AGREEMENTS. THE CREDIT AGREEMENT, AS AMENDED BY THIS
AMENDMENT, AND THE OTHER LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT BETWEEN THE
PARTIES AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING
TO THE SUBJECT MATTER HEREOF AND THEREOF. THE WRITTEN CREDIT AGREEMENT, AS
AMENDED BY THIS AMENDMENT, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES.
[The balance of this page is intentionally left blank.]
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 14
15
THIS AMENDMENT is executed and effective as of the date first written
above.
BORROWER:
DAISYTEK, INCORPORATED
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
GUARANTOR:
DAISYTEK INTERNATIONAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
SUBSIDIARY GUARANTORS:
WORKING CAPITAL OF AMERICA, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
HOME TECH DEPOT, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
DAISYTEK (CANADA) INC.,
a Canadian corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 15
16
WORKING CAPITAL CANADA INC.,
a Canadian corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
DAISYTEK DE MEXICO, S.A. DE C.V.,
a Mexican corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
SUPPLIES EXPRESS, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
DAISYTEK LATIN AMERICA, INC.,
a Florida corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
PRIORITY FULFILLMENT SERVICES DE
MEXICO, S.A. DE C.V.,
a Mexican corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
DAISYTEK DE MEXICO SERVICES, S.A. DE C.V.,
a Mexican corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 16
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PRIORITY FULFILLMENT SERVICES, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 17
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DAISYTEK AUSTRALIA PTY. LIMITED,
an Australian corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
PRIORITY FULFILLMENT SERVICES OF CANADA, INC.,
a Canadian corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Finance
AGENT:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx,
Senior Vice President
LENDERS:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx,
Senior Vice President
STATE STREET BANK AND TRUST COMPANY,
a Massachusetts trust
By: /s/ Xxxxxxx St. Xxxx
Xxxxxxx St. Xxxx,
Vice President
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 18
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NBD BANK, a Michigan banking corporation
By: /s/ Xxxxxxx X. XxXxxxxxx
Xxxxxxx X. XxXxxxxxx,
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 19
