EXHIBIT 10.11
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XXXXX NURSERIES, INC.
FOURTH AMENDMENT TO CREDIT AGREEMENT
This FOURTH AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT")
is dated as of March 18, 2003 and entered into by and among XXXXX NURSERIES,
INC., a California corporation ("COMPANY"), the financial institutions listed on
the signature pages hereof (each individually referred to herein as a "LENDER"
and collectively as "LENDERS"), BANK OF AMERICA, N.A. ("BOFA") as syndication
agent (in such capacity, "SYNDICATION AGENT"), XXXXXX TRUST AND SAVINGS BANK
("XXXXXX") as documentation agent (in such capacity, "DOCUMENTATION AGENT"), and
DEUTSCHE BANK TRUST COMPANY AMERICAS, f/k/a BANKERS TRUST COMPANY ("DB"), as
administrative agent for Lenders (in such capacity, "Agent"), and, for purposes
of Section 4 hereof, the Credit Support Parties (as defined in Section 4
hereof), and is made with reference to that certain Amended and Restated Credit
Agreement dated as of June 26, 1998, by and among Company, Lenders, Syndication
Agent, Documentation Agent, and Agent, as amended by that certain First
Amendment to Credit Agreement dated as of March 3, 2000, that certain Second
Amendment to Credit Agreement and Limited Waiver dated as of November 10, 2000
and that certain Third Amendment to Credit Agreement and Consent dated as of
February 1, 2002 (as so amended, the "CREDIT AGREEMENT"). Capitalized terms used
herein without definition shall have the same meanings herein as set forth in
the Credit Agreement.
RECITALS
WHEREAS, the Company has requested that the Credit Agreement
be amended as provided herein;
WHEREAS, the Agent and the Lenders party hereto have agreed to
amend the Credit Agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENT TO THE CREDIT AGREEMENT
1.1 AMENDMENT TO SECTION 1: DEFINITIONS.
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A. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the definition of "Consolidated EBITDA" therefrom in its entirety and
substituting the following therefor:
"CONSOLIDATED EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, (vi) certain adjustments
not to exceed in each case the lesser of the amounts actually incurred or the
amounts set forth for the periods in the attached Schedule I related to (x) the
insolvency and related store closures of K-Mart Corporation, (y) cash severance
payments made by Company, and (z) fees and expenses related to the Fourth
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Amendment to the Credit Agreement dated as of March 18, 2003; (vii) other
non-cash items reducing Consolidated Net Income excluding any such charges
constituting an extraordinary item or loss or any such charge which requires an
accrual of or a reserve for cash charges for any future period LESS other
non-cash items increasing Consolidated Net Income, all of the foregoing as
determined on a consolidated basis for Company and its Subsidiaries in
conformity with GAAP; PROVIDED, HOWEVER, the portion of Consolidated EBITDA for
any applicable period attributable to Subsidiaries of the Company that are not
Domestic Subsidiaries shall not exceed 30% of total Consolidated EBITDA for such
period and PROVIDED further that for purposes of determining the Applicable Base
Rate Margin, the Applicable Eurodollar Rate Margin, and the Commitment Fee
Percentage, Consolidated EBITDA shall be determined without any regard to the
foregoing clause (vi).
SECTION 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon
the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FOURTH
AMENDMENT EFFECTIVE DATE"):
A. COMPANY DOCUMENTS. On or before the Fourth Amendment
Effective Date, Company shall deliver to Lenders (or to Agent for Lenders with
sufficient originally executed copies, where appropriate, for each Lender and
its counsel) the following, each, unless otherwise noted, dated the Fourth
Amendment Effective Date:
1. Signature and incumbency certificates of its officers
executing this Amendment; and
2. Copies of this Amendment executed by Company and the Credit
Support Parties.
B. EXECUTION OF AMENDMENT BY LENDERS. On or before the Fourth
Amendment Effective Date, Requisite Lenders shall have executed and delivered
copies of this Amendment to Agent.
C. FEES. On or before the Fourth Amendment Effective Date,
Company shall pay to each Lender which executes and delivers this Amendment on
or before 5:00 PM New York City time on March 26, 2003 an amendment fee in an
amount equal to 0.25% of the aggregate amount of such Lender's Term Loan
Exposure and Revolving Loan Exposure under the Credit Agreement (as in effect
immediately prior to this Amendment).
D. OTHER PROCEEDINGS. On or before the Fourth Amendment
Effective Date, all corporate and other proceedings taken or to be taken in
connection with the transactions contemplated hereby and all documents
incidental thereto not previously found acceptable by Agent, acting on behalf of
Lenders, shall be reasonably satisfactory in form and substance to Agent, and
Agent shall have received all such counterpart originals or certified copies of
such documents as Agent may reasonably request.
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SECTION 3. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Company has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "Amended Agreement").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of Company.
C. NO CONFLICT. The execution and delivery by Company of this
Amendment and the performance by Company of the Amended Agreement do not and
will not: (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than Liens created under any
of the Loan Documents in favor of Agent on behalf of Lenders), or (iv) require
any approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Company or any of its Subsidiaries, except for such
approvals or consents which will be obtained on or before the Fourth Amendment
Effective Date and disclosed in writing to Lenders.
D. GOVERNMENTAL CONSENTS. The execution and delivery by
Company of this Amendment and the performance by Company of this Amendment do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body (other than filings or recordings
required by the transactions contemplated hereunder).
E. BINDING OBLIGATION. This Amendment has been duly executed
and delivered by Company and is the legally valid and binding obligations of
Company, enforceable against Company in accordance with its respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Fourth Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
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G. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
SECTION 4. ACKNOWLEDGEMENT AND CONSENT
Company is a party to certain Collateral Documents as amended
through the Fourth Amendment Effective Date, pursuant to which Company has
created Liens in favor of Agent on certain Collateral to secure the Obligations.
Each of the Company, Xxxxx Horticulture, Inc., Enviro-Safe Laboratories, Inc.,
Madison Dearborn Capital Partners, L.P., and Madison Dearborn Capital Partners
II, L.P. (collectively, the "CREDIT SUPPORT PARTIES") is a party to certain
Guaranties and, except for Madison Dearborn Capital Partners, L.P. and Madison
Dearborn Capital Partners II, L.P., Collateral Documents, in each case as
amended through the Fourth Amendment Effective Date, pursuant to which such
Credit Support Party has (i) guarantied the Obligations and (ii) except for
Madison Dearborn Capital Partners, L.P. and Madison Dearborn Capital Partners
II, L.P., created Liens in favor of Agent on certain Collateral to secure the
obligations of such Credit Support Party under such Guaranty of such Credit
Support Party. The Guaranties and Collateral Documents referred to above are
collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement and the other Loan Documents
effected pursuant to this Amendment. Each Credit Support Party hereby confirms
that each Credit Support Document to which it is a party or otherwise bound and
all Collateral encumbered thereby will continue to guaranty or secure, as the
case may be, to the fullest extent possible the payment and performance of all
"Obligations," "Guarantied Obligations" and "Secured Obligations," as the case
may be (in each case as such terms are defined in the applicable Credit Support
Document), including without limitation the payment and performance of all such
"Obligations," "Guarantied Obligations" or "Secured Obligations," as the case
may be, in respect of the Obligations of Company now or hereafter existing under
or in respect of the Amended Agreement.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Fourth Amendment Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party (other than Company) acknowledges
and agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by the terms of the
Credit Agreement or any other Loan Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment and (ii) nothing in the
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Credit Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
SECTION 5. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
(i) On and after the Fourth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of Agent or any Lender under, the Credit Agreement or any of
the other Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all reasonable
costs, fees and expenses as described in subsection 10.2 of the Credit
Agreement incurred by Agent and its counsel with respect to this
Amendment and the documents and transactions contemplated hereby shall
be for the account of Company.
C. HEADINGS. Section and subsection 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 or be given
any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same document.
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F. FURTHER ASSURANCES. Company agrees that from time to time,
at the expense of Company, Company will promptly execute and deliver
any additional amendments and related documents that Agent may
reasonably request, in order to effectuate this Amendment and the
transactions contemplated hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
COMPANY:
XXXXX NURSERIES, INC.
By: /S/XXXXXXX X. XXXXXXXX
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Title: CHIEF FINANCIAL OFFICER
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CREDIT SUPPORT PARTIES:
XXXXX HORTICULTURE, INC.
By: /S/XXXXXXX X. XXXXXXXX
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Title: CHIEF FINANCIAL OFFICER
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ENVIRO-SAFE LABORATORIES, INC.
By: /S/XXXXXXX X. XXXXXXXX
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Title: CHIEF FINANCIAL OFFICER
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MADISON DEARBORN CAPITAL PARTNERS, L.P.
By: MADISON DEARBORN PARTNERS, L.P., its General Partner
By: Madison Dearborn Partners, Inc., its General Partner
By: /S/
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Name:
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Title:
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MADISON DEARBORN CAPITAL PARTNERS II, L.P.
[By: MADISON DEARBORN PARTNERS, L.P., its General Partner
By: Madison Dearborn Partners, Inc., its General Partner]
By: /S/
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Name:
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Title:
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LENDERS:
DEUTSCHE BANK TRUST
COMPANY AMERICAS, as a
Domestic Lender, Tranche
B Term Loan Lender,
Agent and Issuing Lender
By: /S/
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Name:
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Title:
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DEUTSCHE BANK AG, NEW YORK BRANCH, as Issuing
Lender
By: /S/
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Name:
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Title:
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BANK OF AMERICA, N.A., as a Lender and as
Syndication Agent
By: /S/
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Name:
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Title:
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BANK OF NOVA SCOTIA, as a Lender
By: /S/
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Name:
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Title:
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CREDIT AGRICOLE INDOSUEZ, as a Lender
By: /S/
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Name:
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Title:
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By: /S/
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Name:
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Title:
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BLACK DIAMOND, as a Lender
By: /S/
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Name:
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Title:
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BLACK DIAMOND CLO 2001-1 LTD., as a Lender
By: /S/
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Name:
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Title:
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BLACK DIAMOND CLO 1998-1 LTD., as a Lender
By: /S/
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Name:
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Title:
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CYPRESSTREE INVESTMENT PARTNERS, LLC, as a Lender
By: /S/
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Name:
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Title:
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DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN
BRANCHES, as a Lender
By: /S/
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Name:
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Title:
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By: /S/
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Name:
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Title:
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FLEET NATIONAL BANK, as a Lender
By: /S/
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Name:
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Title:
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FRANKLIN FLOAT RATE TRUST, as a Lender
By: /S/
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Name:
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Title:
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XXXXXX TRUST AND SAVINGS BANK, as a Lender
By: /S/
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Name:
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Title:
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LASALLE BANK NATIONAL ASSOCIATION, as a Lender
By: /S/
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Name:
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Title:
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MASSACHUSETTS MUTUAL-MAPLEWOOD (CAYMAN) LIMITED,
as a Lender
By: /S/
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Name:
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Title:
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MASSACHUSETTS MUTUAL-SIMSBURY CLO, LIMITED, as a
Lender
By: /S/
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Name:
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Title:
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MASSACHUSETTS MUTUAL-SAAR HOLDINGS COO, LIMITED,
as a Lender
By: /S/
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Name:
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Title:
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MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, as a
Lender
By: /S/
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Name:
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Title:
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PNC BUSINESS CREDIT, as a Lender
By: /S/
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Name:
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Title:
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By: /S/
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Name:
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Title:
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NATIONAL CITY BANK, as a Lender and as
Syndication Agent
By: /S/
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Name:
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Title:
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HARBOURVIEW CDO II LTD., as a Lender
By: /S/
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Name:
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Title:
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HARBOURVIEW CLO IV LTD., as a Lender
By: /S/
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Name:
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Title:
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XXXXXXXXXXX SENIOR FLOATING RATE FUND, as a
Lender
By: /S/
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Name:
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Title:
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PPM SPYGLASS FUNDING TRUST, as a Lender
By: /S/
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Name:
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Title:
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COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as a
Lender
By: /S/
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Name:
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Title:
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By: /S/
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Name:
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Title:
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XXXXX XXX FLOATING RATE LIMITED LIABILITY
COMPANY, as a Lender
By: /S/
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Name:
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Title:
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TORONTO-DOMINION (NEW YORK), INC., as a Lender
By: /S/
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Name:
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Title:
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UNION BANK OF CALIFORNIA, as a Lender
By: /S/
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Name:
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Title:
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XXXXX FARGO BANK, N.A., as a Lender
By: /S/
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Name:
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Title:
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BOEING CAPITAL CORPORATION, as a Lender
By: /S/
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Name:
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Title:
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SCHEDULE I
ADJUSTMENTS RELATED ADJUSTMENTS FOR ADJUSTMENTS FOR
PERIOD TO K-MART SEVERANCE PAYMENTS FEES AND EXPENSES TOTAL ADJUSTMENTS
-------------------------------- -------------------- --------------------- --------------------- -----------------
1st Fiscal Quarter 2002 $600,000 - 0 - - 0 - $600,000
-------------------------------- -------------------- --------------------- --------------------- -----------------
2nd Fiscal Quarter 2002 $1,000,000 - 0 - - 0 - $1,000,000
-------------------------------- -------------------- --------------------- --------------------- -----------------
3rd Fiscal Quarter 2002 $875,000 - 0 - - 0 - $875,000
-------------------------------- -------------------- --------------------- --------------------- -----------------
4th Fiscal Quarter 2002 $1,235,000 $235,000 - 0 - $1,470,000
-------------------------------- -------------------- --------------------- --------------------- -----------------
1st Fiscal Quarter 2003 - 0 - $1,600,000 $675,000 $2,275,000
-------------------------------- -------------------- --------------------- --------------------- -----------------
2nd Fiscal Quarter 2003 - 0 - - 0 - - 0 - - 0 -
-------------------------------- -------------------- --------------------- --------------------- -----------------
3rd Fiscal Quarter 2003 $125,000 - 0 - - 0 - $125,000
-------------------------------- -------------------- --------------------- --------------------- -----------------
4th Fiscal Quarter 2003 $125,000 - 0 - - 0 - $125,000
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Shcedule I-1
