EXHIBIT 4.14
XXXXX HORTICULTURE, INC.
TENTH AMENDMENT TO CREDIT AGREEMENT
AND SECOND AMENDMENT TO HOLDINGS GUARANTY
This TENTH AMENDMENT TO CREDIT AGREEMENT AND SECOND AMENDMENT TO
HOLDINGS GUARANTY (this "Amendment") is dated as of March 9, 1998 and entered
into by and among XXXXX HORTICULTURE, INC. (formerly known as Xxxxx Nurseries
Inc.), a California corporation ("Company"), SUN GRO HORTICULTURE INC., a Nevada
corporation ("Sun Gro"), and SUN GRO HORTICULTURE CANADA LTD., a Canadian
corporation ("Sun Gro Canada"; together with Company and Sun Gro, collectively,
"Borrowers"), the financial institutions listed on the signature pages hereof
("Lenders") and BT COMMERCIAL CORPORATION, as Agent for Lenders ("Agent"), and,
for purposes of Section 5 hereof, the Credit Support Parties (as defined in
Section 5 hereof) listed on the signature pages hereof, and is made with
reference to that certain Credit Agreement dated as of August 4, 1995, by and
among Company, Sun Gro and Sun Gro Canada, Lenders and Agent, as amended by that
certain First Amendment dated as of October 11, 1995, that certain Second
Amendment dated as of October 26, 1995, that certain Third Amendment dated as of
March 15, 1996, that certain Fourth Amendment dated as of August 28, 1996, that
certain Fifth Amendment and Consent dated as of November 14, 1996, that certain
Sixth Amendment dated as of February 14, 1997, that certain Seventh Amendment
and Consent to Credit Agreement dated as of March 26, 1997, that certain Eighth
Amendment and Limited Waiver to Credit Agreement and First Amendment to Holdings
Guaranty and Holdings Pledge Agreement dated as of November 7, 1997, and that
certain Ninth Amendment to Credit Agreement and Second Amendment to Holdings
Pledge Agreement dated as of December 16, 1997 (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, Borrowers, Lenders and Holdings desire to amend the Credit
Agreement and certain other Loan Documents (i) to permit Holdings to issue
certain promissory notes as partial consideration for an acquisition to be made
by Xxxxx II, Inc., and (ii) to decrease the amount of Holdings Preferred Stock
required to be owned by MDCP;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
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Section 1. AMENDMENTS TO THE CREDIT AGREEMENT
Amendment to Section 8: Events of Default
A. Section 8 of the Credit Agreement is hereby amended by deleting the
reference to "the Holdings Preferred Stock" appearing after the word
"Stock," in subsection 8.12(iii).
B. Section 8 of the Credit Agreement is hereby further amended by
replacing subsection 8.18 with the following:
"8.18 Certain Covenants Relating to Holdings.
A. Holdings shall not engage in any business other than (i) owning
the capital stock of Company, Xxxxx II and their respective
Subsidiaries, (ii) entering into and performing its obligations under
and in accordance with the Loan Documents and the Related Agreements to
which it is a party and the loan documents and related agreements to be
entered into by Holdings with respect to the Xxxxx II Credit Facility,
including without limitation a demand note in favor of MDCP of up to
$2,500,000 for the capitalization of Xxxxx II, a guarantee of Xxxxx
II's obligations thereunder and a pledge of all of the outstanding
stock of Xxxxx II in support of such guarantee, (iii) issuing preferred
stock and/or stock warrants to Xxxxxx Capital 1330 Investors 1, LP and
issuing promissory notes in favor of the sellers of Lakeland Canada in
connection with the acquisition of Lakeland Canada and its Subsidiaries
by Xxxxx II, Inc. and (iv) owning as its only assets (a) the capital
stock of Company, Xxxxx II and their Subsidiaries and (b) Cash and Cash
Equivalents in an amount not to exceed $100,000 at any one time for the
purpose of paying general operating expenses of Holdings; or"
Section 2. AMENDMENT TO THE HOLDINGS GUARANTY
Amendment to Section 4: Covenants.
Subsection 4.4 of the Holdings Guaranty is hereby amended by
replacing subsection 4.4 with the following:
"4.4 Conduct of Business.
Guarantor shall engage only in the business of (i) owning the
capital stock of Company, Xxxxx II and their respective Subsidiaries,
(ii) entering into and performing its obligations under and in
accordance with the Loan Documents and the Related Agreements to which
it is a party and the loan
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documents and related agreements to be entered into by Holdings with
respect to the Xxxxx II Credit Facility, including without limitation a
demand note in favor of MDCP of up to $2,500,000 for the capitalization
of Xxxxx II, a guarantee of Xxxxx II's obligations thereunder and a
pledge of all of the outstanding stock of Xxxxx II in support of such
guarantee and (iii) issuing preferred stock and/or stock warrants to
Xxxxxx Capital 1330 Investors 1, LP and issuing promissory notes in
favor of the sellers of Lakeland Canada in connection with the
acquisition of Lakeland Canada and its Subsidiaries by Xxxxx II, Inc.
Guarantor shall own no assets other than (a) the capital stock of
Company, Xxxxx II and their Subsidiaries and (b) Cash and Cash
Equivalents in an amount not to exceed $100,000 at any one time for the
purpose of paying general operating expenses of Holdings. Guarantor
shall not directly engage in any business and shall limit its
activities to those activities necessary to discharge its obligations
as a holding company for Company and Xxxxx II."
Section 3. CONDITIONS TO EFFECTIVENESS
Sections 1 and 2 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 "Tenth Amendment
Effective Date"):
A. On or before the Tenth Amendment Effective Date, Holdings and each
Borrower shall deliver to Lenders (or to Agent for Lenders) executed copies of
this Amendment.
B. Agent shall have received copies of this Amendment executed by
Requisite Lenders.
C. On or before the Tenth Amendment Effective Date, all corporate and
other proceedings taken or required 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, and its
counsel shall be satisfactory in form and substance to Agent and such counsel,
and Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Agent may reasonably request.
Section 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, each Borrower and Holdings
represent and warrant to each Lender that the following statements are true,
correct and complete:
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A. Corporate Power and Authority. Each Loan Party 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 and other Loan Documents as amended by this Amendment (the "Amended
Agreements").
B. Authorization of Agreements. The execution and delivery of this
Amendment and the performance of the Amended Agreements have been duly
authorized by all necessary corporate action on the part of each Loan Party
party hereto.
C. Signature and Incumbency. The signature and incumbency
certificates of officers of Holdings and each Borrower delivered in connection
with the Fifth Amendment correctly reflects, as of the Tenth Amendment Effective
Date, the signature and incumbency of each officer of Holdings and each Borrower
executing this Amendment and each of the Loan Documents entered into on or about
the Tenth Amendment Effective Date.
D. No Conflict. After giving effect to the amendments and waivers
effected hereby, the execution and delivery by each Loan Party of this Amendment
and the performance by each Loan Party hereto of the Amended Agreements do not
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Holdings or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of Holdings or any of its Subsidiaries or
any order, judgment or decree of any court or other agency of government binding
on Holdings 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 Holdings 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 Holdings or any of its Subsidiaries (other than Liens created under
any of the Loan Documents in favor of Agent on behalf of Lenders and other than
is contemplated to be created with respect to Xxxxx II in connection with the
Xxxxx II Credit Facility), or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Holdings
or any of its Subsidiaries, except for such approvals or consents which have
been obtained on or before the Tenth Amendment Effective Date and disclosed in
writing to Lenders.
E. Governmental Consents. The execution and delivery by the Loan
Parties hereto of this Amendment and the performance by the Loan Parties hereto
of the Amended Agreements 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.
F. Binding Obligation. This Amendment has been duly executed and
delivered by each Loan Party and this Amendment and the Amended Agreements are
the legally valid and binding obligations of such Loan Party, enforceable
against such Loan Party in accordance with their 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.
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G. Incorporation of Representations and Warranties From Credit
Agreement. After giving effect to the amendments and waivers effected hereby,
the representations and warranties contained in Section 3 of the Credit
Agreement and contained in the other Loan Documents are and will be true,
correct and complete in all material respects on and as of the Tenth 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.
H. Absence of Default. After giving effect to the amendments and
waivers effected hereby, 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 5. ACKNOWLEDGEMENT AND CONSENT
Company is a party to the Company Guaranty, the Company Security
Agreement, the Company Pledge Agreement, the Company Trademark Security
Agreement, the Company Patent Security Agreement and the Collateral Account
Agreement pursuant to which Company has (i) guarantied the Obligations and (ii)
created liens in favor of Agent on certain Collateral to secure the Obligations
and to secure its obligations under the Company Guaranty. Sun Gro is a party to
the Domestic Subsidiary Guaranty, the Domestic Subsidiary Security Agreement,
the Domestic Subsidiary Pledge Agreement, the Domestic Subsidiary Trademark
Security Agreement, the Domestic Subsidiary Patent Security Agreement and the
Collateral Account Agreement pursuant to which Sun Gro has (i) guarantied the
Obligations and (ii) created liens in favor of Agent on certain Collateral to
secure the obligations of Sun Gro under the Domestic Subsidiary Guaranty. Sun
Gro Canada is a party to the Canadian Subsidiary Security Agreement and the
Canadian Subsidiary Pledge Agreement pursuant to which Sun Gro Canada has
created liens in favor of Agent on certain Collateral to secure certain of the
Obligations. Holdings is a party to the Holdings Guaranty and the Holdings
Pledge Agreement pursuant to which Holdings has (i) guarantied the Obligations
and (ii) pledged certain Collateral to Agent to secure the obligations of
Holdings under the Holdings Guaranty. Company, Sun Gro, Sun Gro Canada and
Holdings are collectively referred to herein as the "Credit Support Parties",
and 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, the other Loan Documents 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
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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
Borrowers now or hereafter existing under or in respect of the Amended
Agreements and the Notes defined therein.
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 Agreements and the Credit Support Documents, in each case to which it is
a party or otherwise bound, are true, correct and complete in all material
respects on and as of the Tenth 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 Borrowers) 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
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 6. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the Other Loan
Documents.
(i) On and after the Tenth 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.
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(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 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; Effectiveness. 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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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.
XXXXX HORTICULTURE, INC. (formerly
known as Xxxxx Nurseries Inc.),
as Borrower
By: /s/ Xxxx X. Xxxx
------------------------------------
Title:
---------------------------------
SUN GRO HORTICULTURE INC.,
as Borrower
By: /s/ Xxxx X. Xxxx
------------------------------------
Title:
---------------------------------
SUN GRO HORTICULTURE CANADA LTD.,
as Borrower
By: /s/ Xxxx X. Xxxx
------------------------------------
Title:
---------------------------------
XXXXX HOLDINGS, INC. (formerly known
as Xxxxx Horticulture Inc.)
By: /s/ Xxxx X. Xxxx
------------------------------------
Title:
---------------------------------
S-1
BT COMMERCIAL CORPORATION,
as a Domestic Lender and as Agent
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Title: Associate
---------------------------------
BT BANK OF CANADA,
as a Canadian Lender
By: /s/ Xxxxx X. Xxxxxx, V.P.
------------------------------------
Title:
---------------------------------
BANKERS TRUST COMPANY,
as an Issuing Lender
By: signature illegible
------------------------------------
Title:
---------------------------------
S-2
XXXXXX TRUST AND SAVINGS BANK,
as a Domestic Lender
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Title: Vice President
---------------------------------
FLEET BANK OF MASSACHUSETTS, N.A.,
as a Domestic Lender
By:
-------------------------------------
Title:
---------------------------------
LASALLE NATIONAL BANK,
as a Domestic Lender
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Title: First Vice President
---------------------------------
NATIONSBANK OF TEXAS, N.A.,
as a Domestic Lender and Canadian Lender
By: signature illegible
------------------------------------
Title:
---------------------------------
UNION BANK OF CALIFORNIA, N.A.
as a Domestic Lender and Canadian Lender
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Title: Vice President
---------------------------------
S-3
XXXXX FARGO BANK, N.A.
as a Domestic Lender and Canadian Lender
By: signature illegible
------------------------------------
Title:
---------------------------------
BANK OF MONTREAL,
as a Canadian Lender
By: /s/ Xxxx XxXxxx
------------------------------------
Title: Senior Account Manager
---------------------------------
S-4
ABN AMRO BANK CANADA, as a
Canadian Lender
By: _______________________________
Title: ____________________________
S-5
