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EXHIBIT 10.2
EIGHTH AMENDMENT TO CREDIT AGREEMENT
THIS EIGHTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated and
effective as of September 30, 1999, 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"), BANK ONE, NA, (Main
Office Chicago), a national banking association formerly named The First
National Bank of Chicago ("Bank One"), and CHASE BANK OF TEXAS, N.A., a national
banking association ("Chase"), as a lender and as administrative agent for
itself, State Street and Bank One (State Street, Bank One, 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, Bank One (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, that certain Fourth Amendment to Credit Agreement dated and effective
as of December 11, 1997, that certain Fifth Amendment to Credit Agreement dated
as of February 13, 1998, that certain Sixth Amendment to Credit Agreement dated
as of March 29, 1999 and effective as of March 30, 1999 and that certain Seventh
Amendment to Credit Agreement dated as of September 10, 1999 (as so amended, the
"Credit Agreement"), establishing a revolving credit facility in the aggregate
maximum principal amount of $85,000,000; and
WHEREAS, the parties desire to amend certain provisions of the Credit
Agreement.
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. If a new credit facility is not entered into
between the Borrower, Guarantor and the Lenders by February 29, 2000, then
effective March 1, 2000 the definition of "Adjusted Eurodollar Rate" set forth
in Section 1.1 of the Credit Agreement shall be amended to read in its entirety
as set forth below (for purposes of this paragraph an amendment to the Credit
Agreement shall not constitute a new credit agreement). In addition, the
definition of
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"Loan Commitment" set forth in Section 1.1 of the Credit Agreement shall be
amended to read in its entirety as set forth below upon the execution of this
Amendment:
"Adjusted Eurodollar Rate" means, at any time, a rate of
interest per annum determined by reference to the Interest Rate
Adjustment Ratio in effect on the date such interest rate is determined
according to the following table:
Adjustment Ratio (%) Rate
-------------------- ----
Less than 65 Eurodollar Rate plus 1.0%
65 to Less than 85 Eurodollar Rate plus 1.075%
Equal to or Greater than 85 to Less than 105 Eurodollar Rate plus 1.15%
Equal to or Greater than 105 to Less than 130 Eurodollar Rate plus 1.25%
Equal to or Greater than 130 Eurodollar Rate plus 1.75%"
"Loan Commitment" means, Eighty-Five Million Dollars
($85,000,000). Provided, however, that if (a) after the effective date
of the Eighth Amendment to Credit Agreement Borrower identifies to
Agent, in writing, a prospective lender that desires to become a Lender
hereunder (and pursuant to all of the applicable terms and conditions
of this Agreement) with a Committed Sum of up to Twenty Million Dollars
($20,000,000), (b) Agent consents to such prospective lender becoming a
Lender hereunder with such a Committed Sum (which shall not be
unreasonably withheld) and (c) such prospective lender thereafter
becomes a Lender with such a Committed Sum, pursuant to documentation
in form and substance satisfactory to Agent, then "Loan Commitment"
shall instead mean up to One Hundred and Five Million Dollars
($105,000,000). In this connection, in the event that Agent assists in
identifying a prospective lender Agent shall be paid a market based fee
for its services."
2. Amendment of Section 10.1(n). Section 10.1(n) of the Credit
Agreement is amended to read in its entirety as follows:
"(n) Management. Mark C. Layton shall, for any reason, cease
to be the Chairman of Daisytek Corporation (and a Person with
equivalent knowledge and experience in the business of wholesale
distribution of non-paper computer and office automation supplies and
accessories, reasonably acceptable to Lenders, is not appointed to
replace Mr. Layton within sixty (60) days thereof)."
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
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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) 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.
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. PURSUANT TO
SECTION 346.004 OF THE TEXAS FINANCE CODE, CHAPTER 346 OF THE TEXAS FINANCE CODE
SHALL NOT APPLY TO THE CREDIT AGREEMENT, AS AMENDED BY THIS AMENDMENT, THE
NOTES, OR ANY ADVANCE OR LOAN EVIDENCED BY 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
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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 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 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.
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
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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:
------------------------------------------------
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:
DAISYTEK ASIA PTE LTD, a Singapore corporation DAISYTEK (CANADA) INC., a Canadian corporation
By: By:
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Name: Name:
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Title: Title:
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DAISYTEK AUSTRALIA PTY. LTD. (ACN 075 675 795), DAISYTEK DE MEXICO, S.A. DE C.V., a Mexican corporation
an Australian corporation
By: By:
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Name: Name:
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Title: Title:
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DAISYTEK DE MEXICO SERVICES, PRIORITY FULFILLMENT SERVICES OF
S.A. DE C.V., a Mexican corporation AUSTRALIA PTY. LIMITED, (ACN 077 906 462),
an Australian corporation
By:
-------------------------------------
Name:
------------------------------------- By:
Title: -------------------------------------
------------------------------------- Name:
-------------------------------------
Title:
DAISYTEK LATIN AMERICA, INC., -------------------------------------
a Florida corporation
PRIORITY FULFILLMENT SERVICES
OF CANADA, INC., a Canadian
corporation
By:
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Name:
-------------------------------------
Title: By:
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Name:
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HOME TECH DEPOT, INC., Title:
a Delaware corporation -------------------------------------
STEADI-SYSTEMS, LTD.,
By: a California corporation
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Name:
-------------------------------------
Title: By:
------------------------------------- -------------------------------------
Name:
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PRIORITY FULFILLMENT SERVICES DE MEXICO, Title:
S.A. DE C.V., a Mexican corporation -------------------------------------
By: STEADI SYSTEMS MIAMI, INC.,
------------------------------------- a Florida corporation
Name:
-------------------------------------
Title:
-------------------------------------
By:
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PRIORITY FULFILLMENT SERVICES, INC., Name:
a Delaware corporation -------------------------------------
Title:
-------------------------------------
By:
------------------------------------- STEADI SYSTEMS NEW YORK, INC.,
Name: a New York corporation
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Title:
-------------------------------------
By:
-------------------------------------
Name:
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Title:
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SUPPLIES EXPRESS, INC., THE TAPE COMPANY, INC.,
a Delaware corporation an Ohio corporation
By:
----------------------------- By:
Name: -----------------------------
----------------------------- Name:
Title: -----------------------------
----------------------------- Title:
-----------------------------
WORKING CAPITAL OF AMERICA, INC.,
a Delaware corporation THE TAPE COMPANY, INC.,
a Minnesota corporation
By:
----------------------------- By:
Name: -----------------------------
----------------------------- Name:
Title: -----------------------------
----------------------------- Title:
-----------------------------
THE TAPE COMPANY, INC.,
an Illinois corporation TAPE DISTRIBUTORS OF TEXAS, INC.,
a Texas corporation
By:
-----------------------------
Name: By:
----------------------------- -----------------------------
Title: Name:
----------------------------- -----------------------------
Title:
-----------------------------
THE TAPE COMPANY, INC.,
a Georgia corporation
BUSINESS SUPPLIES DISTRIBUTORS, INC.,
a Delaware corporation
By:
-----------------------------
Name: By:
----------------------------- -----------------------------
Title: Name:
----------------------------- -----------------------------
Title:
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THE TAPE COMPANY, INC.,
a Pennsylvania corporation
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
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PFSWEB, INC., a Delaware BUSINESS SUPPLIES DISTRIBUTOR
corporation EUROPE B.V., a Dutch corporation
By: By:
---------------------------- ----------------------------
Name: Name:
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Title: Title:
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BSD DISTRIBUTORS, (CANADA) INC.,
a Canadian corporation AGENT:
CHASE BANK OF TEXAS, N.A.,
By: a national banking association
----------------------------
Name:
----------------------------
Title: By:
---------------------------- ---------------------------------
Name:
----------------------------
Title:
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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:
---------------------------------
Michael St. Jean,
Vice President
BANK ONE, NA, (Main Office Chicago),
a national banking association
By:
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Kathy Turner, Authorized Agent
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