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EXHIBIT 10.34
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated and
effective as of February 13, 1998, is among DAISYTEK, INCORPORATED, a Delaware
corporation ("Borrower"), DAISYTEK INTERNATIONAL CORPORATION, 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"), THE FIRST NATIONAL
BANK OF CHICAGO, a national banking association ("First Chicago"), and CHASE
BANK OF TEXAS, N.A., a national banking association formerly named Texas
Commerce Bank National Association ("Chase"), as a lender and as administrative
agent for itself, State Street and First Chicago (State Street, First Chicago,
Chase 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 meanings ascribed to such terms
in the Credit Agreement.
RECITALS
WHEREAS, Borrower, Guarantor, certain Subsidiary Guarantors, State
Street, First Chicago (as assignee, effective June 30, 1997, of NBD Bank, a
Michigan banking corporation) and Chase are parties to 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, that certain Second Amendment
to Credit Agreement dated as of November 14, 1996 and effective as of November
18, 1996, that certain Third Amendment to Credit Agreement dated and effective
as of June 30, 1997, and that certain Fourth Amendment to Credit Agreement
dated and effective as of December 11, 1997 (as so amended, the "Credit
Agreement"), establishing a revolving credit facility in the aggregate maximum
principal amount of $50,000,000; and
WHEREAS, the parties desire to increase the maximum principal amount
of the revolving credit facility from $50,000,000 to $65,000,000, to extend the
stated maturity date thereof to December 31, 2000, and to modify certain
provisions regarding the rates at which interest accrues.
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:
""Adjusted Eurodollar Rate" means, at any time, a rate of
interest per annum determined by reference to the Adjustment Ratio in
effect on the date such interest rate is determined according to the
following table:
Adjustment Ratio (%) Rate
---------------- ----
<65 Eurodollar Rate plus 0.625%
> or = to 65 to <85 Eurodollar Rate plus 0.700%
> or = to 85 to <120 Eurodollar Rate plus 0.775%
> or = to 120 to <150 Eurodollar Rate plus 0.875%
> or = to 150 Eurodollar Rate plus 1.125%"
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""Committed Sum" means, with respect to the Loan Commitment,
Twenty-Five Million Dollars ($25,000,000) with respect to Chase,
Twenty-Five Million Dollars ($25,000,000) with respect to State
Street, and Fifteen Million Dollars ($15,000,000) with respect to
First Chicago."
""Loan Commitment" means Sixty-Five Million Dollars
($65,000,000)."
""Loan Maturity Date" means December 31, 2000, or such earlier
date as results pursuant to Article X."
2. New Definitions. The following definitions are added to
Section 1.1 of the Credit Agreement, to read in their entireties as follows:
""Fifth Amendment Closing Date" means February 13, 1998, being
the effective date of the Fifth Amendment to Credit Agreement among
Borrower, Guarantor, Subsidiary Guarantors, Lenders and Agent."
""First Chicago" means The First National Bank of Chicago, a
national banking association."
3. 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 Fifth Amendment Closing Date
and substantially in the form of Exhibit A."
4. Amendment of Section 11.3. Lenders' names and addresses as
set forth in Section 11.3 of the Credit Agreement are amended to read in their
entirety as follows:
"Chase Bank of Texas, N.A.
0000 Xxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx
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
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The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
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."
In addition, all references to "Texas Commerce Bank National
Association" are hereby amended to be references to "Chase Bank of Texas,
N.A.," and all references to "TCB" are hereby amended to be references to
"Chase."
5. Amendment of Exhibit A. Exhibit A to the Credit Agreement is
amended in its entirety to be in the form of Exhibit A attached to this
Amendment.
6. 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 Fifth Amendment 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 May
22, 1995, except as expressly described in such certificate;
(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 Fifth 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 Fifth 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) Opinion of Counsel. An executed opinion of Xxxxx &
Samson, P.C., Roseland, New Jersey, counsel to the Daisytek
Corporations, dated as of the Fifth Amendment Closing Date and in form
and substance satisfactory to Lenders and their counsel;
FIFTH AMENDMENT TO CREDIT AGREEMENT - Page 3
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(f) Other Documents. Any and all other documents or
certificates reasonably requested by a Lender in connection with the
execution of this Amendment; and
(g) Fee. The fee referred to in Borrower's letter to
Agent of February 6, 1998.
7. Guaranties. Each of Guarantor and each Subsidiary Guarantor
hereby acknowledges, consents and agrees to this Amendment and (a) acknowledges
that its obligations under that certain Guaranty executed by it, in favor of a
Lender, includes a guaranty of all of the obligations, indebtedness and
liabilities of Borrower under the Credit Agreement as amended by this Amendment
(specifically including, without limitation, the obligations, indebtedness and
liabilities resulting from the increase in the maximum principal amount of the
revolving credit facility established by the Credit Agreement from $50,000,000
to $65,000,000), (b) represents to each Lender that such Guaranty remains in
full force and effect and shall continue to be its legal, valid and binding
obligation, enforceable against it in accordance with its terms, and (c) agrees
that this Amendment and all documents executed in connection herewith do not
operate to reduce or discharge its obligations under such Guaranty.
8. Other Documents. Borrower shall provide such other documents
incidental and appropriate to this Amendment as Agent or Agent's counsel may
reasonably request, all such documents being in form and substance reasonably
satisfactory to Agent.
9. Terms of Agreement. Except as expressly amended by this
Amendment, the Credit Agreement is and shall be unchanged.
10. 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.
Lenders agree to undertake reasonable efforts among themselves such
that, as of the Fifth Amendment Closing Date, amounts outstanding under the
Loan shall, as to each Lender, be held Pro Rata (as Pro Rata is modified by the
amendment, in this Amendment, of the term "Committed Sum.").
11. 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) 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, (c) 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 (d) each Daisytek Corporation is in
full compliance with all covenants and agreements contained in the Credit
Agreement, as amended hereby.
12. 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.
FIFTH AMENDMENT TO CREDIT AGREEMENT - Page 4
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13. 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 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.
14. 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.
15. 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.
16. 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 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
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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.
17. WAIVER OF CONSUMER/DTPA RIGHTS. EACH DAISYTEK CORPORATION
HEREBY WAIVES ALL OF ITS RIGHTS UNDER THE TEXAS DECEPTIVE TRADE
PRACTICES-CONSUMER PROTECTION ACT (TEX. BUS. & COM. CODE Section 17.41 ET
SEQ.), A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS, AND
REPRESENTS AND WARRANTS TO EACH LENDER THAT SUCH CORPORATION (A) 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, (B) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION, AND (C)
IS REPRESENTED BY LEGAL COUNSEL IN CONNECTION WITH SUCH TRANSACTIONS.
18. 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.]
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THIS AMENDMENT is executed and effective as of the date first written
above.
BORROWER:
DAISYTEK, INCORPORATED
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
GUARANTOR:
DAISYTEK INTERNATIONAL
CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SUBSIDIARY GUARANTORS:
WORKING CAPITAL OF AMERICA, DAISYTEK DE MEXICO SERVICES,
INC., a Delaware corporation S.A. DE C.V., a Mexican corporation
By: By:
------------------------------ ---------------------------------
Name: Name:
---------------------------- -------------------------------
Title: Title:
--------------------------- ------------------------------
HOME TECH DEPOT, INC., a Delaware PRIORITY FULFILLMENT SERVICES,
corporation INC., a Delaware corporation
By: By:
------------------------------ ---------------------------------
Name: Name:
---------------------------- -------------------------------
Title: Title:
--------------------------- ------------------------------
DAISYTEK (CANADA) INC., a Canadian DAISYTEK AUSTRALIA PTY. LIMITED, an
corporation Australian corporation
By: By:
------------------------------ ---------------------------------
Name: Name:
---------------------------- -------------------------------
Title: Title:
--------------------------- ------------------------------
SUBSIDIARY GUARANTORS (cont'd):
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WORKING CAPITAL OF AMERICA, PRIORITY FULFILLMENT SERVICES OF
INC., a corporation CANADA, INC., a Canadian corporation
By: By:
------------------------------ ---------------------------------
Name: Name:
---------------------------- -------------------------------
Title: Title:
--------------------------- ------------------------------
PRIORITY FULLFILLMENT SERVICES OF
DAISYTEK DE MEXICO, S.A. DE C.V., AUSTRALIA PTY. LIMITED, an
a Mexican corporation Australian corporation
By: By:
------------------------------ ---------------------------------
Name: Name:
---------------------------- -------------------------------
Title: Title:
--------------------------- ------------------------------
SUPPLIES EXPRESS, INC., a Delaware DAISYTEK ASIA PTY. LIMITED, a
corporation Singapore corporation
By: By:
------------------------------ ---------------------------------
Name: Name:
---------------------------- -------------------------------
Title: Title:
--------------------------- ------------------------------
DAISYTEK LATIN AMERICA, INC., a STEADI SYSTEMS LTD.,
Florida corporation a California corporation
By: By:
------------------------------ ---------------------------------
Name: Name:
---------------------------- -------------------------------
Title: Title:
--------------------------- ------------------------------
PRIORITY FULFILLMENT SERVICES STEADI SYSTEMS NEW YORK, INC.,
DE MEXICO, S.A. DE C.V., a Mexican a New York corporation
corporation
By: By:
------------------------------ ---------------------------------
Name: Name:
---------------------------- -------------------------------
Title: Title:
--------------------------- ------------------------------
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STEADI SYSTEMS MIAMI, INC.,
a Florida corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
AGENT:
CHASE BANK OF TEXAS, N.A.,
a national banking association
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
LENDERS:
CHASE BANK OF TEXAS, N.A.
a national banking association
By:
---------------------------------
Name:
-------------------------------
Title:
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STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust
By:
---------------------------------
Xxxxxxx St. Xxxx,
Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
a national banking association
By:
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Xxxxx X. Xxxxx,
Authorized Agent
FIFTH AMENDMENT TO CREDIT AGREEMENT - Page 9
