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EXHIBIT 10.2
FORM OF
LOAN AGREEMENT
This Loan Agreement dated as of ____________ (the "LOAN DATE"), is
entered into by and between Daisytek International Corporation, a Delaware
corporation (the "COMPANY"), and ______________ (the "BORROWER").
A. The Company has established the Daisytek International Corporation
Director and Officer Loan Plan (the "PLAN"). Except as otherwise defined herein,
capitalized terms used in this Agreement have the respective meanings set forth
in the Plan.
B. The Company desires to loan the Borrower $ in accordance with the
terms of the Plan (the "LOAN").
C. The Borrower desires to borrow such amount subject to the terms of
the Plan, this Agreement and the Note in order to acquire shares (the "PURCHASED
SHARES") of the Company's Common Stock, par value $0.01 per share (the "COMMON
STOCK"), on the open market.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto agree as follows:
1. Amount and Terms of the Loan.
1.1. The Loan. On the terms and subject to the conditions of this
Agreement, the Company agrees to lend $___________ to the Borrower for the
purpose of enabling the Borrower to purchase shares of Common Stock in the open
market.
1.2. Maturity Date. Subject to the prepayment provisions of subsections
1.3 and 1.4, the acceleration provisions set forth below and in Section 3 below,
the Loan shall mature on the third anniversary of the Loan Date (the "MATURITY
DATE"). Notwithstanding the foregoing, all principal and accrued but unpaid
interest outstanding under the Loan will automatically become due and payable
within 30 days after the Company makes demand for payment.
1.3. Mandatory Prepayments and Interest Payments.
(a) In the event that any cash dividend or distribution is
paid by the Company with respect to any Purchased Shares relating to
the Loan, the Borrower shall make a mandatory prepayment with respect
to the Loan equal to the amount of such dividend or distribution, which
shall be applied first to accrued but unpaid interest under the Loan,
then to principal. Notwithstanding the foregoing, in the event that the
Committee under the Plan determines that the Borrower would recognize a
net increase in taxable income from the receipt of any such dividends
or distributions after giving effect to any deduction for the related
payment under the Loan, the Committee may in its discretion permit the
Borrower to retain a portion of the dividends or distributions so as to
be able to pay all or part of his related increase in taxes.
(b) If, within 30 days of the Loan Date, the Borrower has not
purchased shares of Common Stock with 100% of the proceeds of the Loan,
the Borrower shall make a mandatory prepayment with respect to the Loan
equal to the amount of the Loan proceeds not used to purchase shares of
Common Stock.
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(c) Interest shall be compounded quarterly during the term of
a Loan; provided, however, that the Borrower shall be entitled instead
to pay such quarterly interest in cash to the Company.
(d) Any cash received upon an exchange or conversion of
Purchased Shares shall be applied to reduce the outstanding Loan
balance (with accrued but unpaid interest being reduced first). Any
cash in excess of that applied against the outstanding Loan balance
shall be paid to the Borrower.
1.4 Optional Prepayments. The Borrower may make voluntary prepayments
on the Loan at any time without penalty in such minimum amounts as the Committee
may determine, which shall be applied first to accrued but unpaid interest, and
then to principal.
1.5. Evidence of Borrowing. The Loan will be evidenced by a promissory
note in substantially the form attached as Exhibit A to this Agreement (the
"NOTE"). The Borrower will promptly execute and deliver to the Company any other
instruments evidencing the Loan reasonably requested by the Company.
2.1. Restrictions on Purchased Shares. From the date of the purchase of
the Purchased Shares until the principal of the Loan and all unpaid interest
thereon is repaid in full (the "RESTRICTED PERIOD"):
(a) Certificates representing Purchased Shares shall bear the following
legend in addition to any other legends that the Company may deem appropriate:
THIS CERTIFICATE AND THE SHARES OF STOCK AND ALL RIGHTS HEREBY
REPRESENTED ARE SUBJECT TO THE TERMS, CONDITIONS AND RESTRICTIONS SET
FORTH IN THE DAISYTEK INTERNATIONAL CORPORATION DIRECTOR AND OFFICER
LOAN PLAN AND ANY AGREEMENT UNDER THAT PLAN AND THE LOAN AGREEMENT
BETWEEN THE OWNER OF SUCH SHARES AND DAISYTEK INTERNATIONAL CORPORATION
MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF SUCH PLAN AND AGREEMENTS, COPIES OF WHICH ARE ON FILE AT
THE OFFICES OF DAISYTEK INTERNATIONAL CORPORATION.
(b) Certificates representing Purchased Shares shall be registered in
the name of the Borrower and the Borrower shall be treated as a stockholder with
respect to such shares, including the right to vote such shares.
2.2. Voting and Other Rights of the Borrower and the Company.
Simultaneously with the execution and delivery of this Agreement, the Borrower
will execute and deliver to the Company a proxy in the form attached as Exhibit
B hereto (the "PROXY"). So long as no Event of Default (as described in
subsection 3.1) has occurred and is continuing, the Borrower will be entitled to
vote and to exercise all other rights and remedies with respect to the Purchased
Shares. Upon the occurrence and during the continuance of an Event of Default
(as defined in Section 3.1), the Proxy will automatically become effective
pursuant to its terms, and the Company or its substituted proxy will have the
right to vote and to exercise all other rights and remedies with respect to the
Purchased Shares.
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3. Events of Default.
3.1. Events of Default. For purposes of this Agreement, any of the
following events will constitute an "EVENT OF DEFAULT":
(a) the Borrower fails to pay any amount due under the Loan
and the default remains uncured for a period of 10 days after the date
the Company gives the Borrower notice of the default;
(b) the Borrower defaults under or breaches any other
covenant, representation or warranty under the Note, this Agreement or
any other agreement under the Plan and the default or breach remains
uncured for a period of 30 days after the date the Company gives the
Borrower notice of his default or breach;
(c) the Borrower applies for or consents to the appointment of
a receiver, trustee, custodian or liquidator of any of his property,
admits in writing his inability to pay his debts as they mature, makes
a general assignment as a bankrupt or insolvent or is the subject of an
order for relief under Chapter 13 of the United States Bankruptcy Code
or files a voluntary petition in bankruptcy or a petition or answer
seeking an arrangement with creditors to take advantage of any
bankruptcy, insolvency, readjustment or debt or liquidation law or
statute, or an answer admitting the material allegations of a petition
filed against him in any proceeding under any such law; or
(d) any court of competent jurisdiction enters an order,
judgment or decree, without the application, approval or consent of the
Borrower, approving a petition appointing a receiver, trustee,
custodian or liquidator of all or a substantial part of the assets of
the Borrower, and such order, judgment or decree continues unstayed and
in effect for a period of 30 days.
3.2. Consequences of Events of Default. If an Event of Default occurs,
the Company may enforce its rights under the Plan, the Note and any other
agreement entered into under the Plan.
4. General.
4.1. Compliance with Withholding. The Company shall have the right to
require the Borrower to pay to the Company the amount of any taxes that are
required to be withheld in connection with any repayment of a Loan, any release
of Purchased Shares or any sale of Purchased Shares. To the extent permitted by
the Committee, the Borrower may elect to have any distribution otherwise
required to be made under this Agreement to be withheld to fulfill any tax
withholding obligation.
4.2. Amendment and Waiver. This Agreement may only be amended by
written agreement of the Borrower and the Company.
4.3. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any party; but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law,
such provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
4.4. Complete Agreement. This document and the documents referred to
herein contain the complete agreement between the parties and supersede any
prior understandings, agreements or
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representations by or between the parties, written or oral, which relate to the
subject matter hereof.
4.5. Governing Law. The provisions of this Agreement shall be construed
in accordance with the internal laws of the State of Texas.
IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first written above.
BORROWER DAISYTEK INTERNATIONAL
CORPORATION
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Name: Name:
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Title:
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EXHIBIT A
FORM OF PROMISSORY NOTE
$____________ [DATE]
FOR VALUE RECEIVED, the undersigned (the "BORROWER") promises to pay,
on or before ______________ to the order of Daisytek International Corporation
or any successor thereto (the "COMPANY"), at such place as the Company shall
designate, the principal sum shown above, together with interest from the date
hereof on the principal balance outstanding under this Note as provided
hereinafter and in the Loan Agreement dated the date hereof between the Company
and the Borrower (the "LOAN AGREEMENT").
This Note is subject to the terms of the Daisytek International
Corporation Director and Officer Loan Plan (the "PLAN") and is secured by the
Loan Agreement and has been delivered by the Borrower pursuant to the Loan
Agreement. The holder of this Note is entitled to the benefits of the Loan
Agreement and may enforce the agreements of the Borrower herein and therein and
exercise the remedies provided for hereby and thereby or otherwise in respect of
this Note.
Except as set forth below, from the date hereof interest shall accrue
on the outstanding principal amount hereof at the rate set forth in the Plan.
Interest shall accrue on the outstanding principal balance hereof at a
fluctuating rate per annum equal to the Applicable Interest Rate (as defined in
the Plan). Interest shall be compounded quarterly during the term of this Note;
provided, however, that the Borrower shall be entitled instead to pay such
quarterly interest in cash to the Company. Payments of both principal and
interest hereunder shall be made in lawful money of the United States of
America. This Note may be prepaid, in whole or in part, at any time without
premium or penalty.
If an Event of Default (as that term is defined in the Loan Agreement)
shall occur, all principal and accrued but unpaid interest payable under this
Note shall accelerate and become immediately due and payable without any
presentment, demand, protest, or other notice of any kind and, until repaid in
full, all amounts due hereunder, including without limitation interest due
hereunder, shall bear interest at an annual rate equal to the lower of (A) two
percent (2%) higher than the rate calculated pursuant to the calculation set
forth above and (B) the highest rate, if any, permitted at law.
If legal action is necessary to collect any amount due hereunder,
Borrower shall be liable for the payment of reasonable attorney's fees and the
costs of Company incurred to others in connection with such collection.
The Borrower hereby agrees to be personally liable for payment of this
Note.
This Note is to be governed by and construed in accordance with the
laws of the State of Texas. In any action brought under or arising out of this
Note, the undersigned hereby consents to the jurisdiction of any competent court
within the State of Texas and consents to service of process by any means
authorized by Texas law.
BORROWER
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Name:
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EXHIBIT B
FORM OF PROXY
The undersigned hereby revokes any previous or contemporaneous proxies
and appoints _______________ as attorney and proxy of the undersigned to cause
notice to be given with respect to and to attend any and all meetings of
shareholders of Daisytek International Corporation, a Delaware corporation (the
"COMPANY"), to vote all shares of capital stock of the Company owned by the
undersigned and held by the Company (the "PURCHASED SHARES") pursuant to the
Loan Agreement dated ___________ between the Company and the undersigned (the
"LOAN AGREEMENT"), and to represent and otherwise to act for the undersigned in
the same manner and with the same effect as if the undersigned were personally
present.
This proxy shall become effective immediately, without further action
by the undersigned, upon an Event of Default under the Loan Agreement occurs,
and shall remain in effect until such Event of Default shall be remedied by the
undersigned.
This proxy shall be deemed to be a proxy coupled with an interest and
is irrevocable and has been granted pursuant to Section 2.2 of the Loan
Agreement.
The undersigned authorizes such attorney and proxy to substitute any
other person to act hereunder, to revoke any substitution and to file this proxy
(immediately upon its becoming effective as set forth above) and any
substitution or revocation with the Secretary of the Company.
Dated: [__________]
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Name: