EXHIBIT 10.3
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SECOND AMENDMENT TO CREDIT AGREEMENT
AMONG
DAISYTEK, INCORPORATED,
AS BORROWER,
THE LENDERS,
BANK ONE, NA,
AS ADMINISTRATIVE AGENT
CITIZENS BANK OF MASSACHUSETTS,
AS SYNDICATION AGENT,
BANK OF AMERICA, N.A.,
AS DOCUMENTATION AGENT, AND
BANK ONE, NA,
AS LC ISSUERS
DATED AS OF OCTOBER 19, 2001
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SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
entered into as of the 19th day of October, 2001, by and among the banks listed
on the signature pages hereof (the "Lenders"), DAISYTEK, INCORPORATED (the
"Borrower"), DAISYTEK INTERNATIONAL CORPORATION (the "Guarantor"), CITIZENS BANK
OF MASSACHUSETTS, as Syndication Agent, BANK OF AMERICA, N.A., as Documentation
Agent, BANK ONE, NA, as an LC Issuer, and BANK ONE, TEXAS, NA, as
Administrative Agent and an LC Issuer, to the extent and in the manner provided
for in the Credit Agreement (as defined below).
BACKGROUND
A. The Lenders, the Borrower, the Guarantor, the Syndication Agent, the
Documentation Agent, the LC Issuers and the Administrative Agent are parties to
that certain Credit Agreement dated as of December 18, 2000 (as amended through
the date hereof and as may be further amended, extended, renewed, or restated
from time to time, the "Credit Agreement"; terms defined in the Credit Agreement
and not otherwise defined herein shall be used herein as defined in the Credit
Agreement).
B. Pursuant to written consent memoranda dated February 8, 2001 (the
"Consents") the Required Lenders consented to a spring lien on accounts
receivable and inventory of certain Foreign Subsidiaries to secure Indebtedness,
not to exceed $40,000,000, permitted under Section 6.11(v) of the Credit
Agreement.
C. In April of 2001, the Borrower requested that New Lenders provide
additional Commitments pursuant to Section 2.26 of the Credit Agreement.
D. The Credit Agreement was amended as of April 10, 2001 to incorporate
the Consents into the Credit Agreement as permitted lien exceptions under
Section 6.15 and to make certain technical corrections relating to New Lenders
and their Commitments.
E. The Administrative Agent accepted the Commitments and Acceptances of
First American Bank, S.S.B. and Guaranty Bank as of April 24, 2001 and they
became New Lenders.
F. The Borrower has requested the waiver and amendment contained in
this Amendment.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the parties
hereto covenant and agree as follows:
1. AMENDMENTS TO THE CREDIT AGREEMENT. The Credit Agreement is hereby
amended as follows:
(a) Section 1.1 is amended as follows:
(i) The following new definitions are added in
alphabetical order:
SECOND AMENDMENT - Page 1
"Equity Event" means the receipt by the Borrower,
after the date of the Second Amendment, of an aggregate amount
of cash of at least $10,000,000 as proceeds from the sale of
its capital stock.
"Second Amendment" means the Second Amendment, dated
as of October 19, 2001, to this Agreement.
(ii) The definition of "Borrowing Base" is amended by
adding the following sentence after the first sentence
thereof:
"Notwithstanding the foregoing, the Borrowing Base
shall be $5,000,000 less than the amount calculated in the
preceding sentence until the Equity Event shall have
occurred."
(iii) (b) Section 6.15(viii) of the Credit Agreement
is amended by deleting the reference "$1,000,000" and
substituting therefor a reference to "$2,000,000."
2. REQUEST AND WAIVER. The Borrower has made a written request (by Memo
dated October 16, 2001) for an additional $10,000,000 basket for Investments in
Foreign Subsidiaries (the "Request"). The Administrative Agent and the Required
Lenders grant the Request and waive compliance with Section 6.14(v) of the
Credit Agreement so long as additional Investments in Foreign Subsidiaries do
not exceed, $10,000,000 after the date of this Amendment.
3. REPRESENTATIONS AND WARRANTIES TRUE, NO DEFAULT. By its execution
and delivery hereof, the Borrower represents and warrants to the Agents and the
Lenders that, as of the date hereof:
(a) after giving effect to this Amendment, the representations
and warranties contained in the Credit Agreement and the other Loan
Documents are true and correct in all material respects on and as of
the date hereof as if made on and as of such date, except for any
representations and warranties made as of a specific date, which shall
be true and correct in all material respects as of such specific date;
and
(b) after giving effect to this Amendment, no event has
occurred and is continuing which constitutes a Default or an Unmatured
Default.
4. CONDITIONS OF EFFECTIVENESS. This Amendment shall not be effective
until each of the following conditions precedent shall have been satisfied:
(a) The Administrative Agent shall have received this
Amendment executed by the Borrower, the Guarantor and the Required
Lenders.
(b) The Administrative Agent shall have received the written
consent of the Subsidiary Guarantors.
SECOND AMENDMENT - Page 2
(c) The Administrative Agent shall have received such
documents, certificates and instruments as the Administrative Agent
shall reasonably require.
5. REFERENCE TO CREDIT AGREEMENT. Upon the effectiveness of this
Amendment, each reference in the Credit Agreement to "this Agreement,"
"hereunder," or words of like import shall mean and be a reference to the Credit
Agreement, as affected and amended by this Amendment and, as amended hereby, the
Credit Agreement is incorporated herein by reference and is amended and restated
hereby.
6. COUNTERPARTS; EXECUTION VIA FACSIMILE. This Amendment may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. This
Amendment may be validly executed and delivered by facsimile or other electronic
transmission.
7. GOVERNING LAW; BINDING EFFECT. This Amendment shall be governed by
and construed in accordance with the laws of the State of Texas and shall be
binding upon the Borrower, the Guarantor, the Administrative Agent, the
Syndication Agent, the Documentation Agent, the LC Issuers, each Lender and
their respective successors and assigns.
8. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. LOAN DOCUMENT. This Amendment is a Loan Document and is subject to
all provisions of the Credit Agreement applicable to Loan Documents, all of
which are incorporated in this Amendment by reference the same as if set forth
in this Amendment verbatim.
10. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECOND AMENDMENT - PAGE 3
IN WITNESS WHEREOF, the Borrower, the Lenders, the Guarantor, the
Syndication Agent, the Documentation Agent, the LC Issuers and the
Administrative Agent have executed this Amendment as of the date first above
written.
BORROWER:
DAISYTEK, INCORPORATED
By:
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Name
Title
[SIGNATURE PAGE TO SECOND AMENDMENT]
BANK ONE, NA as Administrative
Agent, a Lender and LC Issuer
By:
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Name
Title
[SIGNATURE PAGE TO SECOND AMENDMENT]
BANK OF AMERICA, N.A., as Lender and as
Documentation Agent
By:
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Name
Title
[SIGNATURE PAGE TO SECOND AMENDMENT]
COMERICA BANK
By:
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Name
Title
[SIGNATURE PAGE TO SECOND AMENDMENT]
COMPASS BANK
By:
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Name
Title
[SIGNATURE PAGE TO SECOND AMENDMENT]
IBM CREDIT CORPORATION
By:
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Name
Title
[SIGNATURE PAGE TO SECOND AMENDMENT]
CITIZENS BANK OF MASSACHUSETTS, as a
Lender and Syndication Agent
By:
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Name
Title
[SIGNATURE PAGE TO SECOND AMENDMENT]
GUARANTY BANK
By:
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Name
Title
[SIGNATURE PAGE TO SECOND AMENDMENT]
FIRST AMERICAN BANK, S.S.B
By:
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Name
Title
[SIGNATURE PAGE TO SECOND AMENDMENT]
CONSENT
The undersigned Subsidiary Guarantors consent to the foregoing
Amendment and ratify and confirm that their Subsidiary Guaranty and other
Collateral Documents remain in full force and effect.
SUBSIDIARY GUARANTORS:
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STEADI-SYSTEMS, LTD.
STEADI-SYSTEMS NEW YORK, LTD.
STEADI-SYSTEMS MIAMI, INC.
THE TAPE COMPANY, INC. (an Illinois corporation)
THE TAPE COMPANY, INC. (a Georgia corporation)
THE TAPE COMPANY, INC. (a Pennsylvania corporation)
TAPE DISTRIBUTORS OF TEXAS, INC.
TAPE DISTRIBUTORS OF MINNESOTA, INC.
DAISYTEK LATIN AMERICA, INC.
ARLINGTON INDUSTRIES, INC.
VIRTUAL DEMAND, INC.
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
▇.▇. ▇▇▇▇▇ COMPANY
By:
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Name
Title
[SIGNATURE PAGE TO SECOND AMENDMENT]