EXHIBIT 10.13
SECOND AMENDMENT TO AMENDED AND RESTATED
SECURED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED SECURED CREDIT AGREEMENT
(this "Amendment") dated as of December 28, 1998, 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, Xxxxx Fargo Bank, Comerica Bank, 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 September 3, 1998, as amended by
that certain First Amendment to Amended and Restated Secured Credit Agreement
dated as of November 10, 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 (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 of the Credit Agreement is hereby amended as follows:
(i) The definitions of "Agent Loans", "Agent Swing Line",
"Commitment Step-down Date", "Revolving Loans", "Tangible Assets" and "Tangible
Assets to Senior Debt Plus Current Liabilities Ratio" are hereby deleted in
their entirety. Any reference in the Agreement to "Revolving Loan" or "Revolving
Loans" shall hereafter be deemed to refer to "Loan" or "Loans".
(ii) The definitions of "Applicable Margin", "Base Rate", "Base
Rate Loan", "Collateral", "Commitment", "Commitment Amount", "Credit Documents",
"EBITDA", "L/C Commitments", "Loan", "Majority Lenders", "Maturity Date" and
"Public Subordinated Debt Issue" are hereby amended and restated in their
entirety as follows:
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"Applicable Margin" means (i) for Base Rate Loans, 0.50%, and (ii) for
LIBOR Loans, 2.75%. The Applicable Margin for Base Rate Loans and for LIBOR
Loans, as applicable, shall be increased by 0.50% at the end of each calendar
quarter commencing March 31, 1999, and quarterly thereafter.
"Base Rate" means, for any day, the higher of (i) the fluctuating
commercial loan rate announced by the Agent from time to time as its base rate
for Dollar loans in the United States of America in effect on such day (which
base rate may not be the lowest rate charged by the Agent on loans to any of its
customers), or (ii) the Federal Funds Rate plus one-half of one percent (0.5%)
per annum, with any change in the Base Rate resulting from a change in such rate
to be effective on the date of the relevant change.
"Base Rate Loan" means a Loan bearing interest prior to maturity at the
Base Rate plus the Applicable Margin.
"Collateral" means all property and assets of the Borrower and its
Subsidiaries in which the Agent is granted a Lien for the benefit of the
Lenders.
"Commitment" means, relative to any Lender, such Lender's obligation to
make Loans and to participate in Letters of Credit issued pursuant to Sections
2.1 and 2.2 in the percentage set forth opposite its signature hereto or
pursuant to the provisions of Section 10.10, as such commitment may be reduced
from time to time pursuant to this Agreement.
"Commitment Amount" means an amount equal to $150,000,000, as such amount
may be reduced from time to time pursuant to the terms of this Agreement.
"Credit Documents" means this Agreement, the Notes, the Subsidiary
Guaranties, the Stock Pledge Agreements, the Security Agreements, the Mortgages,
the Applications, the Borrowing Requests and any other documents or instruments
executed by the Borrower or any of the Guarantors in connection with this
Agreement.
"EBITDA" means, for any period, on a historic four fiscal quarter rolling
basis, the sum of (i) Consolidated Net Income plus each of the following to the
extent actually added or deducted in determining Consolidated Net Income (a)
Consolidated Interest Expense, (b) provisions for taxes based on income or
revenues, (c) up to $9,000,000 in extraordinary, unusual or non-recurring gains
or losses for the trailing four fiscal quarters through June 30, 1999, and any
extraordinary, unusual or non-recurring gains (but not losses) thereafter, plus
(d) the amount of all depreciation and amortization expense actually deducted in
determining Consolidated Net Income, all calculated on a consolidated basis for
the Borrower and its Subsidiaries and as determined in accordance with GAAP.
Upon the consummation of any Acquisition, EBITDA shall be adjusted to include
the historical financial results of the acquired business (on a trailing four
fiscal quarter pro forma basis consistent with SEC regulations and practices).
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"L/C Commitments" means, relative to any Lender, such Lender's obligation
to participate in Letters of Credit pursuant to Section 2.2 in the percentage
set forth opposite its signature hereto or pursuant to Section 10.10, as such
commitments may be reduced from time to time pursuant to the terms of this
Agreement.
"Loan" means the revolving loans by the Lenders described in Section 2.1
outstanding as a Base Rate Loan or a LIBOR Loan, each of which is a "type" of
Loan hereunder.
"Majority Lenders" means, at any time, the Lenders then holding in the
aggregate one hundred percent (100%) of the aggregate of the Commitments, or if
the Commitments have terminated pursuant to the terms hereof, the aggregate
Obligations. The percentage set forth opposite each Lender's name in the line
"Percentage" on the signature page hereto reflects the initial voting percentage
of each Lender hereunder on the Effective Date.
"Maturity Date" means April 1, 2000.
"Public Subordinated Debt Issue" means a public issuance of subordinated
debt securities of the Borrower (including any issuance of subordinated debt
securities pursuant to Rule 144(a)) in an aggregate principal amount of at least
$150,000,000, the terms of which debt securities are approved in advance of the
offering thereof by the Majority Lenders in their sole discretion."
(iii) The definition of "Fixed Charge Coverage Ratio" is hereby
amended by adding the words "and practices" before the parentheses at the end
thereof.
(iv) The following definitions of "Mortgages", "Private
Subordinated Debt Issue" and "Security Agreements" are hereby added in the
correct alphabetical order:
"Mortgages" means each mortgage or deed of trust (including an assignment
of leases and rents) of the Borrower and any of its Subsidiaries in form and
substance reasonably satisfactory to the Agent granting the Lenders a Lien upon
any interest it has in real property, as amended, restated or supplemented from
time to time.
"Private Subordinated Debt Issue" means a private issuance of subordinated
debt securities of the Borrower in an aggregate principal amount of up to
$50,000,000, the terms of which debt securities are (i) typical of those
contained in a public subordinated debt issue by companies of the type, size and
condition (financial and otherwise) as the Borrower, and (ii) approved by the
Majority Lenders in their sole discretion in advance of the offering thereof by
the Borrower.
"Security Agreements" means each Security Agreement of the Borrower and any
of its Subsidiaries in substantially the form of Exhibit 4.1D, as amended,
restated or supplemented from time to time.
(b) Section 2.1 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
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"Section 2.1 Loans. Subject to the terms and conditions hereof, each
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Lender severally and not jointly agrees to make one or more loans (each a "
Loan") to the Borrower from time to time before the Commitment Termination
Date on a revolving basis in an aggregate amount not to exceed at any time
outstanding an amount equal to its Percentage of the Commitment Amount (for
each Lender, its "Commitment"), subject to any reductions thereof pursuant
to the terms of this Agreement. No Lender shall be permitted or required
to make any Loan if, after giving effect thereto, (i) the aggregate
principal amount of the Loans of all Lenders and L/C Obligations
outstanding of the Borrower would thereby exceed the Commitment Amount then
in effect; or (ii) the aggregate principal amount of all Loans of such
Lender and its participating interest in all L/C Obligations would thereby
exceed the Percentage of such Lender of the Commitment Amount then in
effect. Each Borrowing of Loans shall be made ratably from the Lenders in
proportion to their respective Percentages. Loans may be repaid, in whole
or in part, and all or any portion of the principal amount thereof
reborrowed, before the Commitment Termination Date, subject to the terms
and conditions hereof."
(c) Section 2.3 of the Credit Agreement is hereby amended by deleting
the second sentence thereof.
(d) Section 2.4(d) of the Credit Agreement is hereby amended by
deleting the second sentence thereof.
(e) Section 2.6(a) of the Credit Agreement is hereby amended by
deleting the clauses "with respect to Revolving Loans," and "or with respect to
Agent Loans, the sum of the Base Rate from time to time in effect minus 0.5%,"
in the fifth, sixth and seventh lines thereof.
(f) Section 2.7 of the Credit Agreement is hereby amended by deleting
the clause "which is a Revolving Loan" in the first line of subsection (a)
thereof, by adding the word "and" at the end of subsection (b) thereof, by
deleting the semicolon and the word "and" at the end of subsection (c) thereof
and inserting a period in its place and by deleting subsection (d) thereof in
its entirety.
(g) Section 2.8 of the Credit Agreement is hereby amended by deleting
the second sentence thereof.
(f) Section 2.10 of the Credit Agreement is hereby amended by adding
the following sentence as the new second sentence thereof:
"The Borrower shall also, immediately and without notice or demand, pay the
net proceeds of any Private Subordinated Debt Issue to the Lenders as a
prepayment of the Loans and if all Loans have been paid, a pre-funding of
Letters of Credit pursuant to the provisions of Section 7.4."
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(g) Section 2.11 of the Credit Agreement is hereby amended by deleting
the clause "(and, with respect to the Agent, any Agent Loans outstanding to the
Borrower)" in the second sentence thereof.
(h) Section 2.13 of the Credit Agreement is hereby amended by deleting
the number "1,000,000" in the fourth line thereof and inserting the number
"5,000,000" in its place.
(i) Section 3.1 of the Credit Agreement is hereby amended as follows:
(i) Section 3.1(a) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(a) Commitment Fee. For the period from the Effective Date to and
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including the Commitment Termination Date the Borrower shall pay to the
Agent for the ratable account of the Lenders, a commitment fee (computed on
a basis of a 365/366-day year and actual days elapsed) on an amount equal
to the average daily difference between (i) the sum of the Commitment
Amount and (ii) the outstanding Loans and L/C Obligations times 0.50% per
annum. The commitment fee shall be increased by 0.50% at the end of each
calendar quarter commencing March 31, 1999, and quarterly thereafter. Such
commitment fees shall be payable in arrears commencing on September 30,
1998, and on the last Business Day of each calendar quarter thereafter and
on the Maturity Date unless the Commitments are terminated in whole on an
earlier date, in which event the commitment fee for the period to but not
including the date of such termination shall be paid in whole on the date
of such termination."
(ii) Section 3.1(b) of the Credit Agreement is hereby amended by
deleting the clause "the fronting fee described in the Fee Letter" at the end
thereof and inserting in its place the clause "a 1/8% of 1% fronting fee of the
face amount of each Letter of Credit".
(j) Section 3.3 of the Credit Agreement is hereby amended by adding
the word "and" at the end of subsection 3.3(a)(iv).
(k) Section 4.2 of the Credit Agreement is hereby amended by deleting
the clause "but excluding the Revolving Loans to be made as required by Section
2.1(b)" in the third and fourth lines thereof.
(l) Section 4.2(e) and Section 5.5 of the Credit Agreement are hereby
amended by deleting the references to Regulation G.
(m) Section 6.5 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
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"Section 6.5. Insurance. The Borrower and its Subsidiaries will
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maintain or cause to be maintained with responsible insurance companies,
insurance against any loss or damage to all material insurable property and
assets owned by them, such insurance to be of a character and in or in
excess of such amounts as are customarily maintained by companies similarly
situated and operating like property or assets, all of which policies shall
name the Agent as a loss payee for losses in excess of $50,000 and provide
that no policy shall terminate without at least thirty (30) days' advance
written notice to the Agent and otherwise be reasonably acceptable to the
Agent. The Borrower and each of its Subsidiaries will also insure
employers' and public and product liability risks, such insurance to be of
a character and in or in excess of such amounts as are customarily
maintained by companies similarly situated and operating like property or
assets (with each liability insurance policy to name the Agent as an
additional insured) with responsible insurance companies, all as reasonably
acceptable to the Agent. No deductible under any of such policies shall
exceed $250,000, unless such deductible amount under any such policy shall
become unavailable on commercially reasonable terms and the Borrower shall
not self-insure any such risks, in each case except as may have covered
claims by any Subsidiary prior to the date of Acquisition thereof. The
Borrower will on or before January 31st of each calendar year and upon the
request of the Agent, furnish a certificate from an officer of the Borrower
setting forth the nature and extent of the insurance maintained pursuant to
this Section 6.5."
(n) Section 6.6(e) of the Credit Agreement is hereby amended by
deleting the reference to Section 6.24.
(o) Section 6.9 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
"Section 6.9 New Subsidiaries. The Borrower shall cause (i) any
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direct or indirect domestic Subsidiary which is formed or acquired after
the Effective Date to become a Guarantor with respect to, and jointly and
severally liable with all other Guarantors for, all of the Obligations
under this Agreement and the Note pursuant to a Guaranty substantially in
the form of Exhibit 4.1A, to execute and deliver a Security Agreement
substantially in the form of Exhibit 4.1D, together with a UCC-1 Financing
Statement with respect to the assets of such Guarantor as set forth therein
and to execute and deliver a Mortgage on any interest it has in real
property which the Agent determines material in its reasonable discretion,
together with UCC-1 Financing Statements with respect to the personal
property assets of such Guarantor as set forth therein (which Mortgages
shall be recorded by the Agent upon written notice to the Agent by the
Borrower, a Guarantor or a Lender of the occurrence of a Default), and (ii)
any Subsidiary which forms or acquires a Subsidiary after the Effective
Date to execute and deliver to the Agent a Stock Pledge Agreement
substantially in the form of Exhibit 4.1B and to deliver to the Agent the
original stock certificates for any such Subsidiary as set forth therein
(or other evidence of its
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ownership interest therein) and undated stock powers executed in blank with
respect thereto, in each case within thirty (30) days following such
formation or acquisition. The Borrower shall provide to the Agent a list of
all its Subsidiaries with the state or country of incorporation and the
location of the principal place of business of each such Subsidiary at the
same time as it provides its quarterly financial reports to the Agent
pursuant to Section 6.6(a)(i). Upon demand by the Agent (which demand shall
be made at the request of any Lender), the Borrower shall promptly execute
and deliver to the Agent, and shall cause its domestic Subsidiaries to
promptly execute and deliver to the Agent, such other and further security
documents as may be reasonably requested by the Agent to perfect a Lien on
its rolling stock and all equipment with certificates of title."
(p) Section 6.11(a) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(a) the Borrower or any of its Subsidiaries may merge into or
consolidate with, make an Acquisition or otherwise purchase or acquire all
or substantially all of the assets or stock of any other Person if upon the
consummation of any such merger, consolidation, purchase or Acquisition,
(i) the Borrower or such Subsidiary is the surviving corporation to any
such merger or consolidation (or the other Person will thereby become a
Subsidiary); (ii) the nature of the business of such acquired Person is a
Permitted Business; (iii) the Borrower shall have delivered to the Agent
(which the Agent shall promptly provide to each Lender) within ten (10)
Business Days prior to the consummation of an Acquisition a report signed
by an executive officer of the Borrower which shall contain calculations
demonstrating the Borrower's compliance with Sections 6.20, 6.21, 6.22 and
6.23 (on a trailing four fiscal quarter pro forma basis, consistent with
SEC regulations and practices), such calculations to use historical
financial results of the acquired business; (iv) all Lenders shall consent;
(v) no Default or Event of Default shall have occurred and be continuing or
would otherwise be existing as a result of such merger, consolidation,
purchase or Acquisition; and (vi) such merger, consolidation, purchase or
Acquisition is non-hostile in nature; and"
(q) Section 6.13(l) of the Credit Agreement is hereby amended by
deleting the clause "Stock Pledge Agreements" and inserting in its place the
clause "Credit Documents".
(r) Section 6.14 of the Credit Agreement is hereby amended as follows:
(i) Section 6.14(e) of the Credit Agreement is hereby amended by
adding the clause "as reasonably acceptable to the Agent" after the word
"hereunder" in the second line thereof.
(ii) Section 6.14(g) of the Credit Agreement is hereby amended by
adding the clause "Subordinated Debt Issue or Private Subordinated" after the
word "Public" in the first line thereof.
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(s) Sections 6.20, 6.21, 6.22 and 6.23 are hereby amended and restated
in their entirety as follows and Section 6.24 is hereby deleted in its entirety:
"Section 6.20 Minimum Consolidated Net Worth. The Borrower will
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maintain a minimum Consolidated Net Worth of not less than an amount equal
to the sum of (i) $78,618,000, plus (ii) for each fiscal quarter ended
prior to (but not on) such date of determination, commencing with the
fiscal quarter ended June 28, 1998, (x) an amount equal to 50% of
Consolidated Net Income for such fiscal quarter, if positive, plus (y) an
amount equal to 100% of the amount of any equity issuance by the Borrower,
including in a secondary offering or where equity is used to acquire
another entity in an Acquisition, plus (z) an amount equal to 100% of the
stockholders equity of any entity acquired in an Acquisition for which the
Borrower uses the pooling of interest method of accounting in accordance
with GAAP.
Section 6.21 Minimum Fixed Charge Coverage Ratio. The Borrower
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will maintain a Fixed Charge Coverage Ratio of at least 1.0 to 1.0 through
June 28, 1999, and 1.25 to 1.0 thereafter.
Section 6.22 Maximum Funded Debt to EBITDA Ratio. The Borrower
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will maintain a maximum Funded Debt to EBITDA Ratio of not greater than
3.50 to 1.0 through June 28, 1999, 3.25 to 1.0 from June 29, 1999, through
December 28, 1999, and 3.0 to 1.0 from December 29, 1999 thereafter;
provided that if a Public Subordinated Debt Issue shall have closed, the
Borrower will maintain a maximum Funded Debt to EBITDA Ratio of not greater
than 3.75 to 1.0 from and after the date thereof.
Section 6.23 Maximum Senior Debt to EBITDA Ratio. The Borrower
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will maintain a maximum Senior Debt to EBITDA Ratio of not greater than
3.25 to 1.0 through June 28, 1999, 3.0 to 1.0 from June 29, 1999, through
December 28, 1999, and 2.75 to 1.0 from December 29, 1999 thereafter."
(t) Section 7.1 of the Credit Agreement is hereby amended as follows:
(i) Section 7.1(j) is hereby amended by deleting the word "or" at
the end thereof.
(ii) Section 7.1(k) is hereby amended and restated in its
entirety as follows:
"(k)(i) any Person or two or more Persons acting in concert shall
acquire beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
voting securities of the Borrower (or other securities convertible into
such securities) representing fifty percent (50%)
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or more of the combined voting power of all outstanding securities of the
Borrower entitled to vote in the election of directors; or (ii) individuals
who on the Effective Date, constitute the Borrower's Board of Directors, or
their successors approved in accordance with the terms below, cease for any
reason to constitute at least a majority thereof, unless the election or
nomination for the election by the Borrower's stockholders of each new
director was approved by vote of at least 2/3rds of the directors then
still in office who were directors on the Effective Date, or their
successors approved in accordance with the terms hereof; or (iii) the
common stock of the Borrower shall be delisted from the National
Association of Securities Dealers Automated Quotation System; or"
(iii) A new Section 7.1(l) is hereby added as follows:
"(l) an Event of Default shall occur and be continuing under any
documents evidencing any Public Subordinated Debt Issue or any Private
Subordinated Debt Issue."
(u) Section 9.2 of the Credit Agreement is hereby amended by deleting
the clause ", including its capacity as a Lender under the Agent Swing Line" and
the clause "to the Agent Loans, or" in the seventh and eighth lines thereof.
(v) Section 10.5 of the Credit Agreement is hereby amended by deleting
the clause "or the Agent Loans, as applicable" and the clause "or Agent
Obligations, as applicable," in the third and fifth lines thereof.
(w) Section 10.10 of the Credit Agreement is hereby amended as
follows:
(i) Section 10.10(a) of the Credit Agreement is hereby amended by
deleting the word "or" in the seventeenth line thereof and inserting a comma in
its place and by inserting the clause ", any Security Agreement or any Mortgage"
after the word "Agreement" in such line.
(ii) Section 10.10(b) of the Credit Agreement is hereby amended by
deleting the clause "; provided that, the Agent shall not be required to sell
its Agent Loans at such time as it may sell any other portion of its Borrowings,
Notes, Commitments and other interests hereunder" in the sixteenth, seventeenth
and eighteenth lines thereof.
(x) Section 10.11(i) of the Credit Agreement is hereby amended by
deleting the clause "(and the Agent in the case of Agent Loans)" in the third
and fourth lines thereof.
(y) The Percentages of the Lenders as of the date of this Amendment
shall be as follows (and all references to Percentages of Commitments on and
after the Commitment Step-down Date on the signature pages of the Credit
Agreement are hereby deleted):
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Lender Percentage
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Bank One, Texas, National Association 44.0000000000%
National City Bank 16.0000000000%
Xxxxx Fargo Bank 16.0000000000%
Comerica Bank 12.00%
Paribas 10.00%
(z) The Credit Agreement is hereby amended by adding a new Exhibit
4.1D as attached hereto.
2. Reaffirmation of Representations and Warranties. To induce the Lenders
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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
after giving effect to this Amendment.
3. Conditions. The effectiveness of this Amendment is subject to the
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following conditions, all in form and substance satisfactory to the Lenders:
(a) The Agent shall have received:
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(i) Consent of Guarantors. Each Guarantor shall consent to this
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Amendment by executing and delivering to the Agent the applicable Consent and
Acknowledgment attached hereto;
(ii) Security Agreements. The duly executed Security Agreements
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of each of the Borrower and the Guarantors in substantially the form of Exhibit
4.1D;
(iii) UCC-1 Financing Statements. The duly executed UCC-1
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Financing Statements of each of the Borrower and the Guarantors with respect to
the Collateral referenced in the Security Agreements;
(iv) Certificates of Officers of Borrower and Guarantors. A
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certificate of the Secretary or Assistant Secretary and the President or Vice
President of each of the Borrower and to the extent not previously provided to
the Agent, the Guarantors containing specimen signatures of the persons
authorized to execute Credit Documents on such Person's behalf or any other
documents provided for herein, together with (x) copies of resolutions of the
Board of Directors of such Person authorizing the execution and delivery of the
Credit Documents and of all other legal documents or proceedings taken by such
Person in connection with the execution and delivery of the Credit Documents,
(y) copies of such Person's Certificate or Articles of Incorporation, certified
by the Secretary of State of such Person's jurisdiction of organization, and
Bylaws or other organizational documents;
(v) Certificate of Existence and Good Standing. A certificate of
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existence and good standing from the Secretary of State of the State of Delaware
with respect to the Borrower;
(vi) Fees. Payment of all fees and expenses incurred through the
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date hereof then due and owing to the Agent and the Lenders;
(vii) Opinion of Counsel. The opinion of Xxxxxx Xxxxx, Esquire,
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General Counsel to the Borrower and the Guarantors covering such matters as the
Lenders may reasonably require; and
(viii) Other Documents. Such other documents as the Lenders may
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reasonably request.
(b) All legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Lenders.
The effectiveness of this Amendment is also subject to the condition subsequent
that the Borrower and any applicable Guarantors shall execute and deliver to the
Agent for the benefit of the Lenders Mortgages covering any of their interests
in real property which the Agent determines material in its reasonable
discretion, together with UCC-1 Financing Statements with respect to the
personal property assets and fixtures covered thereby on or before January 31,
1999 (which Mortgages shall
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be recorded by the Agent upon written notice to the Agent by the Borrower, a
Guarantor or a Lender of the occurrence of a Default).
4. 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.
5. 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.
6. 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 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
12
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
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
13
IS A MATERIAL INDUCEMENT TO THE LENDERS TO PROVIDE THE LOANS AND THE LETTERS OF
CREDIT.
7. Counterparts. This Amendment may be executed in any number of
------------
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.
8. Severability. Any provision of this Amendment that 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.
9. Headings. Section headings used in this Amendment are for reference
--------
only and shall not affect the construction of this Amendment.
10. Notice of Entire Agreement. This Amendment, together with the other
--------------------------
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 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.
14
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their duly authorized officers as of the day and
year first written above.
BORROWER:
--------
PALEX, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
RIDGE PALLETS, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
LENDERS:
-------
BANK ONE, TEXAS, NATIONAL ASSOCIATION,
as Agent and as a Lender
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President and Manager
NATIONAL CITY BANK
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
XXXXX FARGO BANK
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Vice President
COMERICA BANK
By: /s/ Xxxx X. Xxxxxx
-------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
PARIBAS
By: /s/ Xxxxx Xxxxxxxx
-------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
By: /s/ Xxxxx X. May
-------------------
Name: Xxxxx X. May
Title: Vice President
CONSENT AND ACKNOWLEDGMENT
Each of the undersigned Guarantors, by its signature hereto, acknowledges
and agrees to the terms and conditions of that certain Second Amendment to
Amended and Restated Secured Credit Agreement (the "Amendment") dated as of
December 28, 1998, by and between Palex, Inc., a Delaware corporation (the
"Borrower"), Ridge Pallets, Inc., a Florida corporation, Bank One, Texas,
National Association, National City Bank, Xxxxx Fargo Bank, Comerica Bank,
Paribas 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 December 28, 1998.
AMERICAN PALLET RECYCLERS, INC.
BAY AREA PALLET COMPANY
CAPITAL PALLET CO. INC.
CONTINENTAL PALLET CO., INC.
XXXXXXX PALLET CO., INC.
FRASER INDUSTRIES, INC.
XXXXXXX LUMBER COMPANY
INTERSTATE PALLET CO., INC.
XXXXXXXX LUMBER CO.
NLD, INC.
NLP TRANSPORT, INC.
NEW LONDON PALLET, INC.
PALLET OUTLET COMPANY, INC.
RIDGE PALLETS, INC.
SHEFFIELD LUMBER AND PALLET COMPANY, INC.
SHIPSHEWANA PALLET CO., INC.
SONOMA PACIFIC COMPANY
00
XXXXXXXX XXXXXX, INC.
XXXXXXX PALLET MANUFACTURING, INC.
VALLEY CRATING AND PACKAGING, INC.
By: /s/ Xxxxxx Xxxxx
-------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CONSENT AND ACKNOWLEDGMENT
Each of the undersigned Guarantors, by its signature hereto, acknowledges
and agrees to the terms and conditions of that certain Second Amendment to
Amended and Restated Secured Credit Agreement (the "Amendment") dated as of
December 28, 1998, by and between Palex, Inc., a Delaware corporation (the
"Borrower"), Ridge Pallets, Inc., a Florida corporation, Bank One, Texas,
National Association, National City Bank, Xxxxx Fargo Bank, Comerica Bank,
Paribas 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 December 28, 1998.
ACME BARREL COMPANY, INC.
ATLAS CONTAINER COMPANY, INC.
CHARLOTTE STEEL DRUM CORPORATION
CONTAINER SERVICES COMPANY NW ACQUISITION, INC.
CONSOLIDATED CONTAINER CORPORATION
CONTAINER SERVICES COMPANY SW ACQUISITION, INC.
DRUM SERVICE CO. OF FLORIDA
ENVIRONMENTAL RECYCLERS OF COLORADO, INC.
XXXXXX DRUM & BARREL CO., INC.
PALEX CONTAINER SYSTEMS, INC.
SOUTHERN STEEL DRUMS, INC.
WESTERN CONTAINER CORPORATION
WESTERN CONTAINER LIMITED LIABILITY COMPANY
By: /s/ Xxxxxx Xxxxx
-------------------
Name: Xxxxxx Xxxxx
Title: Vice President
16
