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EXHIBIT 10.4
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated
and effective as of December ___, 1997, is among DAISYTEK, INCORPORATED, a
Delaware corporation (hereinafter referred to as "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 TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a
national banking association ("TCB"), as a lender and as administrative agent
for itself, State Street and First Chicago (State Street, First Chicago, 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 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 TCB 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, and that certain Third Amendment to Credit Agreement dated and
effective as of June 30, 1997 (as so amended, the "Credit Agreement"),
establishing a revolving credit facility in the aggregate maximum principal
amount of $50,000,000, with funding commitments thereunder shared forty percent
(40%) by TCB, forty percent (40%) by State Street and twenty percent (20%) by
First Chicago; and
WHEREAS, the parties desire to increase the maximum cash portion of
total consideration payable in acquisitions in a Fiscal Year from $5,000,000 to
$15,000,000, and to increase the maximum aggregate amount of permitted
unsecured Funded Debt pursuant to Section 8.2(m) of the Credit Agreement from
$5,000,000 to $18,000,000.
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. Amendment of Section 8.2(g). Section 8.2(g) of the Credit
Agreement is amended to read in its entirety as follows:
"(g) Acquisitions. No Daisytek Corporation will acquire
the stock or, in a transaction outside the ordinary course of
business, the assets of any other Person; provided, however, that the
foregoing shall not prevent acquisitions if (i) the cash portion of
the total consideration paid in a Fiscal Year in connection with such
acquisitions is Fifteen Million Dollars ($15,000,000) or less and the
total consideration paid in a Fiscal Year in connection with such
acquisitions is Twenty Five Million Dollars ($25,000,000) or less and
(ii) with respect to each such acquisition, the most
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recent annual audited income statement of the Person acquired, or, in
the case of the purchase of less than all or substantially all of the
assets of such Person, of the division or other identifiable business
segment of such Person, discloses positive net operating income. For
purposes of the foregoing sentence, the payment of consideration shall
include the assumption of Debt."
2. 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 (i)
the Obligations, (ii) 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), (iii) Funded Debt
secured as permitted by Section 8.2(a), (iv) unsecured Funded Debt of
up to Ten Million Dollars ($10,000,000) to a Lender incurred under a
money market line of credit, and (v) unsecured Funded Debt of such
Daisytek Corporation which, together with the Funded Debt pursuant to
this clause (v) of all other Daisytek Corporations, does not exceed
Eighteen Million Dollars ($18,000,000)."
3. 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.
4. Terms of Agreement. Except as expressly amended by this
Amendment, the Credit Agreement is and shall be unchanged.
5. 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.
6. 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.
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7. 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.
8. 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.
9. 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.
10. 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.
11. 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
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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.
12. WAIVER OF 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 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, AND (D) IS REPRESENTED BY LEGAL COUNSEL IN
CONNECTION WITH SUCH TRANSACTIONS.
13. 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.
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THIS AMENDMENT is executed and effective as of the date first written
above.
BORROWER:
DAISYTEK, INCORPORATED
By:
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Name:
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Title:
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GUARANTOR:
DAISYTEK INTERNATIONAL
CORPORATION
By:
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Name:
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Title:
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SUBSIDIARY GUARANTORS:
WORKING CAPITAL OF AMERICA,
INC., a Delaware corporation
By:
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Name:
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Title:
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HOME TECH DEPOT, INC., a Delaware
corporation
By:
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Name:
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Title:
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DAISYTEK (CANADA) INC., a Canadian
corporation
By:
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Name:
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Title:
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PRIORITY FULFILLMENT SERVICES WORKING CAPITAL CANADA INC., a
OF AUSTRALIA PTY. LIMITED, corporation
an Australian corporation
By: By:
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Name: Name:
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Title: Title:
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DAISYTEK ASIA PTY. LIMITED, DAISYTEK DE MEXICO, S.A. DE C.V.,
a Singapore corporation a Mexican corporation
By: By:
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Name: Name:
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Title: Title:
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SUPPLIES EXPRESS, INC., a Delaware
corporation
By:
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Name:
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Title:
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DAISYTEK LATIN AMERICA, INC., a
Florida corporation
By:
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Name:
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Title:
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PRIORITY FULFILLMENT SERVICES
DE MEXICO, S.A. DE C.V., a
Mexican corporation
By:
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Name:
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Title:
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DAISYTEK DE MEXICO SERVICES, S.A. DE
C.V., a Mexican corporation
By:
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Name:
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Title:
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PRIORITY FULFILLMENT SERVICES,
INC., a Delaware corporation
By:
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Name:
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Title:
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DAISYTEK AUSTRALIA PTY. LIMITED,
an Australian corporation
By:
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Name:
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Title:
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PRIORITY FULFILLMENT SERVICES
OF CANADA, INC., a Canadian
corporation
By:
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Name:
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Title:
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AGENT:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking
association
By:
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Name:
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Title:
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LENDERS:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking
association
By:
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Name:
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Title:
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STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust
By:
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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
FOURTH AMENDMENT TO CREDIT AGREEMENT - Page 8
