THIRD AMENDMENT TO SECURED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO SECURED CREDIT AGREEMENT (this "Amendment") dated
as of May 10, 1999, is by and between Palex, Inc., a Delaware corporation (the
"Borrower"), Ridge Pallets, Inc., a Florida corporation (a "Borrower" for
purposes of Section 2.2(c) of the Credit Agreement, as defined hereinafter),
Bank One, Texas, National Association ("Bank One"), National City Bank f/k/a
National City Bank of Columbus, Xxxxx Fargo Bank, Comerica Bank, Paribas (f/k/a
Banque Paribas) and the other lenders from time to time parties hereto (each a
"Lender" and collectively, the "Lenders"), and Bank One as administrative agent
for the Lenders (in such capacity, the "Agent").
WITNESSETH:
WHEREAS, the Borrower, the Lenders and the Agent have entered into that
certain Secured Credit Agreement dated as of January 29, 1998, as amended by the
First Amendment dated July 27, 1998 and the Second Amendment dated December 28,
1998, pursuant to which the Lenders have agreed to make Loans to the Borrower
and to issue Letters of Credit for the account of the Borrower pursuant to the
terms thereof ( as amended, the "Credit Agreement"); and
WHEREAS, the Borrower, the Lenders and the Agent desire to amend the Credit
Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Borrower , the Lenders and the Agent hereby agree as
follows:
1. Amendments to Credit Agreement.
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(a) Section 1.1 is amended as follows:
The definition of Maturity Date is hereby amended and restated in its
entirety as follows:
"Maturity Date" shall mean the earlier of (i) September 30, 1999
and (ii) the occurrence of any merger or change of control of
Borrower.
2. Waiver. The Lenders hereby waive any Default or Event of Default
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that exists as of March 28, 1999 as a result of Borrower's non-compliance with
the requirements of Sections 6.21, 6.22 and/or 6.23. This waiver is expressly
limited to the covenants expressly enumerated herein for the period ending March
28, 1999 and shall not constitute a waiver of any other breach of
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the terms of the Credit Agreement and shall not constitute the waiver of non-
compliance with the provisions of Sections 6.21, 6.22 and/or 6.23 at the end of
any subsequent fiscal period.
3. Reaffirmation of Representations and Warranties. To induce the
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Lenders and the Agent to enter into this Amendment, the Borrower hereby
reaffirms, as of the date hereof, its representations and warranties in their
entirety contained in the Credit Agreement and in all other documents executed
pursuant thereto (except to the extent such representations and warranties
relate solely to an earlier date) and additionally represents and warrants as
follows:
(a) The execution and delivery of this Amendment and the performance
by the Borrower of its obligations under this Amendment and the Credit Agreement
as amended hereby are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, have received all necessary
governmental and other approvals (if any shall be required), and do not and will
not contravene or conflict with the governance documents of the Borrower or any
provision of law, any presently existing requirement or restriction imposed by
any judicial, arbitral, regulatory or governmental instrumentality or constitute
a default under, or result in the creation or imposition of any Lien other than
a Permitted Lien upon any property or assets of the Borrower or any Guarantor
under, any agreement, instrument or indenture by which the Borrower or any
Guarantor is bound;
(b) This Amendment has been duly executed and delivered on behalf of
the Borrower and this Amendment and the Credit Agreement as amended hereby are
the legal, valid and binding obligations of the Borrower, enforceable in
accordance with its terms subject as to enforcement only to bankruptcy,
insolvency, reorganization, moratorium or other similar laws and equitable
principles affecting the enforcement of creditors' rights generally; and
(c) No Default or Event of Default has occurred and is continuing.
4. Conditions Precedent. The effectiveness of this Amendment is subject
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to the following conditions precedent:
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(a) The Borrower shall deliver to the Agent resolutions of its Board
of Directors authorizing the execution, delivery and performance of this
Amendment, certified by its Secretary or Assistant Secretary, such certificate
to contain incumbencies of any officer executing this Amendment and any changes
to its Certificate of Incorporation or Bylaws since January 29, 1998; and
(b) The Borrower shall pay to each Lender a modification fee of 0.05%
of the amount of its Commitment.
5. Reaffirmation of Credit Agreement. This Amendment shall be deemed to
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be an amendment to the Credit Agreement, and the Credit Agreement, as amended
hereby, is hereby ratified, approved and confirmed in each and every respect.
All references to the Credit Agreement herein and in any other document,
instrument, agreement or writing shall hereafter be deemed to refer to the
Credit Agreement as amended hereby.
6. Defined Terms. Except as amended hereby, terms used herein when
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defined in the Credit Agreement shall have the same meanings herein unless the
context otherwise requires.
7. Governing Law; Arbitration; Submission to Jurisdiction; Waiver of Jury
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Trial.
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(a) The Credit Agreement, as amended hereby, and the other Credit
Documents, and the rights and duties of the parties thereto, shall be construed
in accordance with and governed by the internal laws of the State of Texas.
(B) THE AGENT, EACH LENDER AND THE BORROWER HEREBY WAIVES ITS RIGHT TO
RESOLVE DISPUTES, CLAIMS, AND CONTROVERSIES ARISING FROM THE CREDIT AGREEMENT,
AS AMENDED HEREBY, ANY OTHER CREDIT DOCUMENT OR ANY MATTER IN CONNECTION
THEREWITH, INCLUDING, WITHOUT LIMITATION, CONTRACT DISPUTES AND TORT CLAIMS,
THROUGH ANY COURT PROCEEDING OR LITIGATION AND ACKNOWLEDGES THAT ALL SUCH
DISPUTES, CLAIMS AND CONTROVERSIES SHALL BE RESOLVED PURSUANT TO THIS SECTION,
EXCEPT THAT EQUITABLE RELIEF AND CERTAIN OTHER RIGHTS AND REMEDIES SET FORTH
BELOW MAY BE SOUGHT FROM ANY COURT OF COMPETENT JURISDICTION. EACH PARTY
REPRESENTS TO THE OTHER PARTIES THAT THIS WAIVER IS MADE KNOWINGLY AND
VOLUNTARILY AFTER CONSULTATION WITH AND UPON ADVICE OF ITS COUNSEL AND IS A
MATERIAL PART OF THIS AGREEMENT. ALL SUCH DISPUTES, CLAIMS AND
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CONTROVERSIES SHALL BE RESOLVED BY BINDING ARBITRATION PURSUANT TO THE
COMMERCIAL RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("AAA"). Any
arbitration proceeding held pursuant to this arbitration provision shall be
conducted in Houston, Texas or at any other place selected by mutual agreement
of the parties. No act to take or dispose of any collateral shall constitute a
waiver of this arbitration agreement or be prohibited by this arbitration
agreement. This arbitration provision shall not limit the right of any party
during any dispute, claim or controversy to seek, use, and employ ancillary, or
preliminary rights and/or remedies, judicial or otherwise, for the purposes of
realizing upon, preserving, protecting, foreclosing upon or proceeding under
forcible entry and detainer for possession of, any real or personal property,
and any such action shall not be deemed an election of remedies. Such remedies
include, without limitation, obtaining injunctive relief or a temporary
restraining order, invoking a power of sale under any deed of trust or mortgage,
obtaining a writ of attachment or imposition of a receivership, or exercising
any rights relating to personal property, including exercising the right of set-
off, or taking or disposing of such property with or without judicial process
pursuant to the Uniform Commercial Code. Any disputes, claims or controversies
concerning the lawfulness or reasonableness of an act, or exercise of any right
or remedy concerning any collateral, including any claim to rescind, reform, or
otherwise modify any agreement relating to the collateral, shall also be
arbitrated; provided, however that no arbitrator shall have the right or the
power to enjoin or restrain any act of either party. Judgment upon any award
rendered by any arbitrator may be entered in any court having jurisdiction. The
statute of limitations, estoppel, waiver, laches and similar doctrines which
would otherwise be applicable in an action brought by a party shall be
applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of any action for these purposes.
The federal arbitration act (Title 9 of the United States Code) shall apply to
the construction, interpretation, and enforcement of this arbitration provision.
(c) To the fullest extent permitted by applicable law, each party
hereto agrees that any court proceeding or litigation permitted by Section 6(b)
may be brought and maintained in the courts of the State of Texas sitting in
Xxxxxx County or the United States District Court for the Southern District of
Texas. To the fullest extent permitted by applicable law, the Borrower hereby
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expressly and irrevocably submits to the jurisdiction of the courts of the State
of Texas and the United States District Court for the Southern District of Texas
for the purpose of any such litigation as set forth above and irrevocably agrees
to be bound by any judgment rendered thereby in connection with such litigation.
To the fullest extent permitted by applicable law, the Borrower further
irrevocably consents to the service of process, by registered mail, postage
prepaid, or by personal service within or without the state of Texas. To the
fullest extent permitted by applicable law, the Borrower hereby expressly and
irrevocably waives any objection which it may have or hereafter may have to the
laying of venue of any such litigation brought in any such court referred to
above and any claim that any such litigation has been brought in an inconvenient
forum. To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution or otherwise) with respect to itself or its property, the Borrower
hereby irrevocably waives to the fullest extent permitted by applicable law,
such immunity in respect of its obligations under the Credit Agreement, as
amended hereby, and the other Credit Documents.
(D) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY
HERETO VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY (BY ITS
ACCEPTANCE HEREOF) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING PERMITTED BY SECTION 6(B) AND WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF THE CREDIT AGREEMENT, AS AMENDED HEREBY, ANY OTHER
CREDIT DOCUMENT, ANY OTHER RELATED DOCUMENT OR ANY RELATIONSHIP BETWEEN THE
AGENT, ANY LENDER, THE BORROWER AND/OR ANY GUARANTOR, AND AGREES THAT ANY SUCH
ACTION, PROCEEDING OR DISPUTE SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE LENDERS TO PROVIDE THE
LOANS AND THE LETTERS OF CREDIT.
8. Counterparts. This Amendment may be executed in any number of
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counterparts, and by the different parties on different counterpart signature
pages, each of which when executed shall be deemed an original but all such
counterparts taken together shall constitute one and the same Amendment.
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9. Severability. Any provision of this Amendment that is prohibited or
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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.
10. Headings. Section headings used in this Amendment are for reference
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only and shall not affect the construction of this Amendment.
11. Notice of Entire Agreement. This Amendment, together with the other
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Credit Documents, constitute the entire understanding among the Borrower, the
Agent and the Lenders and supersedes all earlier or contemporaneous agreements,
whether written or oral, concerning the subject matter of the Amendment and the
other Credit Documents. THIS WRITTEN THIRD AMENDMENT TOGETHER WITH THE OTHER
CREDIT DOCUMENTS REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES 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.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed and delivered by their duly authorized officers as of the day
and year first written above.
BORROWER:
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PALEX, INC.
By: /S/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title:
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RIDGE PALLETS, INC.
By: /S/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title:
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LENDERS:
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BANK ONE, TEXAS, NATIONAL ASSOCIATION
By: /S/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Title: Vice President
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NATIONAL CITY BANK F/K/A NATIONAL CITY BANK OF COLUMBUS
By: /S/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Xxxxxxx X. Xxxxxx
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XXXXX FARGO BANK
By: /S/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: Vice President
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COMERICA BANK
By: /S/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Vice President
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PARIBAS (F/K/A BANQUE PARIBAS)
By: /S/ Xxxxx Xxxxxxxx & Xxxxxx X. Xxxxxxxx
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Name: Xxxxx Xxxxxxxx Xxxxxx X. Xxxxxxxx
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Title: Vice President Vice President
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[SIGNATURE PAGE TO THIRD AMENDMENT]
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CONSENT AND ACKNOWLEDGMENT
Each of the undersigned Guarantors, by its signature hereto, acknowledges
and agrees to the terms and conditions of that certain Third Amendment to
Secured Credit Agreement (the "Amendment") dated as of May 10, 1999, by and
between Palex, Inc., a Delaware corporation (the "Borrower"), Ridge Pallets,
Inc., a Florida corporation, Bank One, Texas, National Association, National
City Bank f/k/a National City Bank of Columbus, Xxxxx Fargo Bank, Comerica Bank,
Banque Paribas, The Sumitomo Bank, Limited, and the other lenders from time to
time parties hereto (collectively, the "Lenders"). Each of the undersigned
acknowledges and reaffirms its obligations under its Guaranty (collectively, the
"Guaranties"), and agrees that the Guaranties shall remain in full force and
effect. Although the undersigned Guarantors have been informed by the Borrower
of the matters set forth in the Amendment, and the undersigned have acknowledged
and agreed to same, the undersigned understand and agree that neither the Agent
nor the Lenders have any duty to notify the Guarantors or to seek any of the
Guarantors acknowledgment or agreement, and nothing contained herein shall
create such a duty as to any transactions hereafter.
Dated as of May 10, 1999.
ACME BARREL COMPANY, INC.
AMERICAN PALLET RECYCLERS, INC.
BAY AREA PALLET COMPANY
CONTAINER SERVICES COMPANY NW ACQUISITION, INC.
CAPITAL PALLET CO. INC.
CONTAINER SERVICES COMPANY SW ACQUISITION, INC.
XXXXXXX PALLET CO., INC.
XXXXXXX LUMBER INCORPORATED
FRASER INDUSTRIES, INC.
RIDGE PALLETS, INC.
INTERSTATE PALLET CO., INC.
NLD, INC.
NLP TRANSPORT, INC.
NEW LONDON PALLET, INC.
PALLET OUTLET COMPANY, INC.
SHEFFIELD LUMBER AND PALLET COMPANY, INC.
SHIPSHEWANA PALLET CO., INC.
SONOMA PACIFIC COMPANY
SOUTHERN PALLET, INC.
XXXXXXX PALLET MANUFACTURING, INC.
VALLEY CRATING AND PACKAGING, INC.
WESTERN CONTAINER CORPORATION
WESTERN CONTAINER LIMITED LIABILITY COMPANY
By: /S/ Xxxxxx Xxxxx, Vice President
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Name: Xxxxxx Xxxxx
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Title: Vice President
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By: /S/ Xxxxx Xxxxxx, Vice President
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Name: Xxxxx Xxxxxx
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Title: Vice President
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