Document:

esnd-ex104_116.htm

Exhibit 10.5

 

EXECUTION COPY

AMENDMENT NO. 1 TO FOURTH AMENDED AND RESTATED FIVE-YEAR REVOLVING CREDIT AGREEMENT

This AMENDMENT NO. 1 TO FOURTH AMENDED AND RESTATED FIVE-YEAR REVOLVING CREDIT AGREEMENT, dated as of January 27, 2016 (this “Amendment”), is entered into by and among Essendant Co., an Illinois corporation (formerly known as United Stationers Supply Co.; the “Borrower”), Essendant Inc., a Delaware corporation (formerly known as United Stationers Inc.; the “Parent”), the financial institutions that are parties hereto and JPMorgan Chase Bank, National Association, as agent (in such capacity, the “Agent”).

RECITALS

A.The Borrower, the Parent, certain financial institutions and the Agent are parties to that certain Fourth Amended and Restated Five-Year Revolving Credit Agreement, dated as of July 8, 2013 (as amended or otherwise modified prior to the date hereof, the “Credit Agreement”; capitalized terms that are used herein without definition and that are defined in the Credit Agreement shall have the same meanings herein as in the Credit Agreement).

B.Subject to the terms and conditions hereof, the parties hereto wish to amend the Credit Agreement in certain respects.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Amendments to the Credit Agreement.  Effective as of the date first above written and subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Credit Agreement is hereby amended as follows:

(a)The definition of “Consolidated EBITDA” in Section 1.1 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

“Consolidated EBITDA” means, with respect to any period, (A) Consolidated Net Income for such period, plus (B) to the extent deducted from revenues in determining Consolidated Net Income for such period, (i) Consolidated Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation, (iv) amortization, (v) losses attributable to equity in Affiliates, (vi) non-cash charges related to employee compensation, (vii) any extraordinary non-cash or nonrecurring non-cash charges or losses, (viii) fees, costs and expenses incurred in connection with Permitted Acquisitions in an aggregate amount not to exceed $10,000,000 in any fiscal year, (ix) any expense under settlement accounting arising from an offer to terminated vested participants in the Essendant Pension Plan to accept a lump sum in lieu of future pension payments made during a window offering period in 2016 and (x) in connection with any Qualifying Permitted Acquisition or Material Disposition, calculated on a pro forma basis based on USI’s most recent financial statements delivered pursuant to Section 6.1 (or, prior to the delivery of the first such financial statements delivered hereunder, as of March 31, 2013), (1) any cost savings and expenses that relate to such Qualifying Permitted Acquisition or Material Disposition in accordance with Article 11 of Regulation S-X under the Securities Act and 

(2) any demonstrable cost-savings and operating expense reductions (net of continuing associated expenses) that relate to such Qualifying Permitted Acquisition or Material Disposition or are reasonably anticipated by the Borrower to be achieved in connection with such Qualifying Permitted Acquisition or Material Disposition within the 12-month period following the consummation thereof, which the Borrower determines in good faith are reasonable and which are so set forth in a certificate of a financial officer of the Borrower delivered to the Agent; provided that amounts added back pursuant to this subclause (2) shall be permitted only to the extent to the aggregate additions under subclauses (1) and (2) for such period do not exceed 10% of the amount which could have been included in Consolidated EBITDA in the absence of the adjustment under this clause (x), minus (C) to the extent included in Consolidated Net Income for such period, any extraordinary non-cash or nonrecurring non-cash gains, all calculated for USI and its Subsidiaries on a consolidated basis.

Solely for the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”), if at any time during such Reference Period, USI or any of its Subsidiaries shall have made any Material Disposition, Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period, in each case, calculated on a pro forma basis based on USI’s most recent financial statements delivered pursuant to Section 6.1 (or, prior to delivery of the first such financial statements delivered hereunder, as of March 31, 2013).

(b)Section 3.5 of the Credit Agreement is amended to insert the following new subclause (x) at the end thereof:

(x)For purposes of determining withholding Taxes imposed under the FATCA, from and after January 27, 2016, the Borrower and the Agent shall treat (and the Lenders hereby authorize the Agent to treat) this Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

2.Conditions of Effectiveness.  This Amendment shall become effective and be deemed effective as of the date hereof, if, and only if, (a) the Agent shall have received duly executed copies of (i) this Amendment from the Borrower, the Parent and the Required Lenders and (ii) a Reaffirmation in the form of Attachment A hereto from each of the Parent and the Guarantors and (b) the Borrower shall have paid (or caused to be paid or reimbursed) the Amendment Fee (as defined below) and, to the extent invoiced, all Costs and Expenses (as defined below).

3.Representations and Warranties.  Each of the Borrower and the Parent hereby represents and warrants as follows:

(a)This Amendment and the Credit Agreement as previously executed and as amended hereby, constitute legal, valid and binding obligations of the Borrower and the 

2

Parent and are enforceable against the Borrower and the Parent in accordance with their terms.

(b)Upon the effectiveness of this Amendment, each of the Borrower and the Parent hereby reaffirms that the representations and warranties of each Loan Party contained in the Credit Agreement and in the other Loan Documents are true and correct in all material respects as of the date hereof, except to the extent that any such representation or warranty expressly relates solely to a specific earlier date, in which case such representation or warranty was true and correct in all material respects as of such earlier date (provided, however, that the representation and warranty specified in Section 5.5 of the Credit Agreement shall be made only as of the Restatement Effective Date).

4.Reference to and Effect on the Credit Agreement.

(a)Upon the effectiveness of Section 1 hereof, on and after the date hereof, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Credit Agreement, as amended hereby.

(b)Except as specifically amended above, the Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect, and are hereby ratified and confirmed.

(c)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Agent or any of the Lenders, nor constitute a waiver of any provision of the Credit Agreement or any other documents, instruments and agreements executed and/or delivered in connection therewith.

5.Costs and Expenses.  The Borrower agrees to pay all reasonable out-of-pocket costs, fees and out-of-pocket expenses (including attorneys’ fees and expenses charged to the Agent) incurred by the Agent in connection with the preparation, execution and delivery of this Amendment (“Costs and Expenses”).

6.Amendment Fee.  Upon the effectiveness of this Amendment, the Borrower agrees to pay to each Lender that shall have delivered a signature page to this Amendment prior to 5:00 p.m., Chicago time, on January 27, 2016, an amendment fee of $2,500 (all such fees in the aggregate being the “Amendment Fee”).

7.Governing Law.  This Amendment shall be governed by and construed in accordance with the internal laws of the State of New York.

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.

3

9.Counterparts.  This Amendment may be executed by one or more of the parties to the Amendment on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

[signature pages begin on next page]

 

 

 

4

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

ESSENDANT CO.

 

 

By:

Name:  

Title:  

 

 

ESSENDANT INC.

 

 

By:

Name: 

Title: 

 

S-1

 

JPMORGAN CHASE BANK, N.A., individually, as an LC Issuer, as Swing Line Lender and as Agent

 

 

By:

Name:

Title: 

 

S-2

 

U.S. BANK NATIONAL ASSOCIATION, as an LC Issuer and Lender

 

 

By:

Name:

Title: 

S-3

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as an LC Issuer and Lender

 

 

By:

Name:

Title: 

S-4

 

BANK OF AMERICA, N.A., as a Lender

 

 

By:

Name:

Title: 

S-5

 

PNC BANK, NATIONAL ASSOCIATION, as a Lender

 

 

By:

Name:

Title: 

S-6

 

MUFG UNION BANK, N.A., as a Lender

 

 

By:

Name:

Title: 

S-7

 

RBS CITIZENS, N.A., as a Lender

 

 

By:

Name:

Title: 

S-8

 

FIFTH THIRD BANK, as a Lender

 

 

By:

Name:

Title: 

S-9

 

KEYBANK NATIONAL ASSOCIATION, as a Lender

 

 

By:

Name:

Title: 

S-10

 

THE NORTHERN TRUST COMPANY, as a Lender

 

 

By:

Name:

Title: 

S-11

 

TD BANK, N.A., as a Lender 

 

 

By:

Name:

Title: 

S-12

 

FIRST HAWAIIAN BANK, as a Lender

 

 

By:

Name:

Title: 

 

 

S-13

 

ATTACHMENT A

REAFFIRMATION

 

Each of the undersigned hereby acknowledges receipt of a copy of Amendment No. 1 to the Fourth Amended and Restated Five-Year Revolving Credit Agreement dated as of July 8, 2013 by and among Essendant Co., an Illinois corporation (formerly known as United Stationers Supply Co.; the “Borrower”), Essendant Inc., a Delaware corporation (formerly known as United Stationers Inc.; the “Parent”), the financial institutions from time to time parties thereto (the “Lenders”) and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Agent”) (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), which Amendment No. 1 is dated as of January 27, 2016 (the “Amendment”).  Capitalized terms used in this Reaffirmation and not defined herein shall have the meanings given to them in the Credit Agreement.  The undersigned acknowledge and agree that nothing in the Credit Agreement, the Amendment or any other Loan Document shall be deemed to require the Agent or any Lender to consent to any future amendment or other modification to the Credit Agreement or any Loan Document.  Each of the undersigned reaffirms the terms and conditions of each of the Collateral Documents and any other Loan Document executed by it and acknowledges and agrees that such agreement and each and every such Loan Document executed by the undersigned in connection with the Credit Agreement remains in full force and effect and is hereby reaffirmed, ratified and confirmed.  All references to the Credit Agreement contained in the above-referenced documents shall be a reference to the Credit Agreement as so modified by the Amendment and as the same may from time to time hereafter be amended, modified or restated.

 

Dated:  January 27, 2016

 

ESSENDANT INC.

 

 

By:

Name: 

Title: 

 

SIGNATURE PAGE TO REAFFIRMATION

 

ESSENDANT FINANCIAL SERVICES LLC

ESSENDANT MANAGEMENT SERVICES LLC

ESSENDANT INDUSTRIAL, LLC

O.K.I. SUPPLY, LLC

OKI MIDDLE EAST HOLDING CO.

CPO COMMERCE ACQUISITION, LLC

CPO COMMERCE, LLC

LIBERTY BELL EQUIPMENT CORPORATION

TRANSSUPPLY GROUP, LLC

LABEL INDUSTRIES, INC.

XL CHAMPION HOLDINGS, LLC

AJS GROUP, LLC

NESTOR HOLDING COMPANY

NESTOR SALES HOLDCO, LLC

NESTOR SALES, LLC

 

 

By:

Name: 

Title: 

SIGNATURE PAGE TO REAFFIRMATIONesnd-ex105_115.htm

Exhibit 10.6

 

Execution Version

FIFTH AMENDMENT

TO

AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT

THIS FIFTH AMENDMENT TO AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT, dated as of March 30, 2016 (this “Amendment”), is entered into by and among (i) Essendant Receivables LLC, an Illinois limited liability company (the “SPV”), (ii) Essendant Co., an Illinois corporation, as originator (the “Originator”), (iii) Essendant Financial Services LLC, an Illinois limited liability company, as seller (the “Seller”) and as Servicer, PNC Bank, National Association (“PNC Bank”), a national banking association, as agent (the “Agent”), as a Class Agent and as an Alternate Investor, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch (“BTMU”), a Japanese banking corporation acting through its New York Branch, as a Class Agent and an Alternate Investor.

Reference is herein made to that certain Amended and Restated Transfer and Administration Agreement, dated as of January 18, 2013 (as amended by (i) that certain Assignment and Assumption and First Amendment to Amended and Restated Transfer and Administration Agreement, dated as of June 14, 2013, (ii) that certain Second Amendment to Amended and Restated Transfer and Administration Agreement, dated as of January 23, 2014, (iii) that certain Third Amendment to Amended and Restated Transfer and Administration Agreement, dated as of July 25, 2014, (iv) that certain Fourth Amendment to Amended and Restated Transfer and Administration Agreement, dated as of December 4, 2014, (v) that certain Third Omnibus Amendment to Transaction Documents, dated as of June 26, 2015, (vi) as amended hereby and (vii) as the same may be further amended, modified, supplemented, restated or replaced from time to time, the “Transfer Agreement”), by and among the SPV, the Originator, the Seller, PNC Bank, as Agent, as a Class Agent and as an Alternate Investor, and the financial institutions from time to time parties thereto as Conduit Investors and Alternate Investors.  Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Transfer Agreement.

WHEREAS, the parties hereto desire to amend the Transfer Agreement as set forth below.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Amendments to Transfer Agreement.  Effective as of the Effective Date (as defined below), the Transfer Agreement is hereby amended as follows:

(a)Section 1.1 of the Transfer Agreement is amended as follows: 

	
 
	
(i)
	
The definition of “Loss Reserve Ratio” is deleted in its entirety and the following is inserted in lieu thereof:

“Loss Reserve Ratio: For any Monthly Period, the product of: 

(i) Stress Factor,

4175790

 

(ii) the highest three-month average Default Ratio during the most recent 12 month period; provided, that for purposes of determining the foregoing calculation with respect to this clause (ii) and solely with respect to:

(x) the months of February 2016 to and including July 2016, such amount shall be deemed to be 0.55%;

(y) the month of August 2016, such amount shall be deemed to be an amount equal to the three-month average Default Ratio calculated by averaging the Default Ratios with respect to December 2015, January 2016 and August 2016; and

(z) the month of September 2016, such amount shall be deemed to be an amount equal to the three-month average Default Ratio calculated by averaging the Default Ratios with respect to January 2016, August 2016 and September 2016, and

(iii) the Loss Horizon Ratio for such Monthly Period.”

	
 
	
(ii)
	
The definition of “Specified Ineligible Receivable” is deleted in its entirety and the following is inserted in lieu thereof:

“Specified Ineligible Receivable:  (i) On and after the Fifth Amendment Effective Date, each Receivable the Obligor of which is identified on a list (which list may be in electronic format) provided by the Servicer to the Agent on or about the Fifth Amendment Effective Date and (ii) from time to time after the Fifth Amendment Effective Date, each Receivable, the Obligor of which is identified by the Servicer to the Class Agents on a list or other writing (which may be in electronic format) provided by the Servicer to the Agent (it being understood that for purposes of this clause (ii), the Servicer shall not designate as additional Specified Ineligible Receivables, the Receivables of more than two Obligors per calendar year).  Any designation by the Servicer of a Receivable as a Specified Ineligible Receivable shall 

2

 

be effective beginning with the Monthly Period immediately following the date of such designation.  Any Receivable that has been designated as a Specified Ineligible Receivable shall not become an Eligible Receivable without the prior consent of the Agent.  On any Business Day during the month of January of each calendar year, the SPV may, but shall not be required to, submit an updated list (which may be in electronic format) designating Receivables as Specified Ineligible Receivables which shall be subject to the review and approval of the Agent, in its sole discretion, in all respects.  Any updated list (which may be in electronic format) designating Receivables as Specified Ineligible Receivables submitted by the SPV pursuant to the immediately preceding sentence shall, upon receipt of the Agent’s approval thereof, supersede and replace any previously effective list designating Receivables as Specified Ineligible Receivables and such list shall set forth the Specified Ineligible Receivables for purposes of this Agreement unless and until such list is updated, supplemented or otherwise modified in accordance with the terms of this definition.”

	
 
	
(iii)
	
The following definitions are added in their proper alphabetical sequence:

“Fifth Amendment Effective Date:  March 30, 2016.”

“Fifth Amendment Effective Period:  The period beginning on the Fifth Amendment Effective Date to but excluding September 20, 2016.”

(b)The third paragraph appearing in Section 2.8 of the Transfer Agreement is deleted in its entirety and the following is inserted in lieu thereof:

“If, on any day, (a) the average of the three (3) most recent Trigger Delinquency Ratios exceeds four and one half percent (4.50%), (b) the average of the three (3) most recent Trigger Default Ratios exceeds one and three quarters of one percent (1.75%) or (c) the average of the three (3) most recent Trigger Dilution Ratios exceeds seven and one half percent (7.50%), then for so long as any of those conditions continue to exist (such period of time being an “Exception Funding Period”), any Class Agent may require the Servicer to deliver to each Class Agent, within one (1) Business Day after the end of each week any portion of which constituted an Exception Funding Period, an Interim Report covering the week most recently then-ended, in the form attached hereto as Exhibit K; 

3

 

provided, that for any day occurring during the Fifth Amendment Effective Period, (x) clauses (a) and (b) shall not apply and (y) any Class Agent may require at any time the Servicer to deliver an Interim Report as set forth above.”

(c)Sections 8.1(l) and (m) of the Transfer Agreement are deleted in their entirety and the following are inserted in lieu thereof as follows: 

“(l)the three-month average Trigger Delinquency Ratio shall exceed 14.00% during the Fifth Amendment Effective Period and 6.25% at all times thereafter; or

(m)the three-month average Trigger Default Ratio shall exceed 10.00% during the Fifth Amendment Effective Period and 2.25% at all times thereafter; or”

2.Representations and Warranties.  Each of the Originator, the SPV, the Seller and the Servicer hereby certifies that, subject to the effectiveness of this Amendment, each of the representations and warranties set forth in the Transfer Agreement and the other Transaction Documents is true and correct on the date hereof, as if each representation and warranty were made on the date hereof.

3.No Default.  The SPV, the Originator, the Seller and the Servicer each hereby represent and warrant that, as of the date hereof, no Termination Event or Potential Termination Event has occurred or is continuing.

4.Transaction Documents in Full Force and Effect As Amended.  Except as specifically amended hereby, the Transfer Agreement and the other Transaction Documents shall remain in full force and effect.  All references to the Transfer Agreement therein and in each other Transaction Document shall be deemed to mean the Transfer Agreement as modified hereby.  The parties hereto agree to be bound by the terms and conditions of the Transfer Agreement, as amended by this Amendment, as though such terms and conditions were set forth herein.

5.Consent of Performance Guarantor.  The Performance Guarantor hereby consents to the amendments to the Transfer Agreement set forth in this Amendment.

6.Conditions to Effectiveness.  This Amendment shall be effective as of the date (the “Effective Date”) on which the Agent shall have received counterparts of this Amendment duly executed by each of the parties hereto.

7.Miscellaneous.

(a)This Amendment may be executed in any number of counterparts and by different parties hereto on the same or separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original instrument but all of which, together, shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.

4

 

(b)The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. 

(c)This Amendment may not be amended or otherwise modified except as provided in the Transfer Agreement.

(d)Any provision in this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(e)THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICT OF LAWS PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

[signatures appear on the following pages]

5

Exhibit 10.6

 

Execution Version

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written.

ESSENDANT RECEIVABLES LLC

By:

Name:  Robert J. Kelderhouse

Title:  Vice President and Treasurer

ESSENDANT CO., as Originator

By:

Name:  Robert J. Kelderhouse

Title:  Vice President and Treasurer

ESSENDANT FINANCIAL SERVICES LLC, as Seller and as Servicer

By:

Name:  Robert J. Kelderhouse

Title:  Vice President and Treasurer

[signatures continue on the following pages]

Fifth Amendment to A&R Transfer and Administration Agreement

 

Acknowledged and consented to by:

ESSENDANT INC., as the Performance Guarantor

By:

Name:  Robert J. Kelderhouse

Title:  Vice President and Treasurer

[signatures continue on the following pages]

Fifth Amendment to A&R Transfer and Administration Agreement

 

PNC BANK, NATIONAL ASSOCIATION, as an Alternate Investor, a Class Agent and the Agent

By:

Name:

Title:

[signatures continue on the following page]

Fifth Amendment to A&R Transfer and Administration Agreement

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as an Alternate Investor

By:

Name:  

Title:  

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as a Class Agent

By:

Name:  

Title:  

[end of signatures]

 

Fifth Amendment to A&R Transfer and Administration Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00257-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00257-of-00352.parquet"}]]