EXHIBIT 99.4
XXXXX NURSERIES, INC.
SUN GRO HORTICULTURE CANADA LTD.
SECOND AMENDMENT TO CREDIT
AGREEMENT AND LIMITED WAIVER
This SECOND AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER (this
"AMENDMENT") is dated as of November 28, 2000 and entered into by and among
XXXXX NURSERIES, INC., a California corporation ("COMPANY"), SUN GRO
HORTICULTURE CANADA LTD., a Canadian corporation and successor by amalgamation
to LAKELAND CANADA LTD. ("SUN GRO CANADA"; together with Company, the
"BORROWERS"), 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. (FORMERLY BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION) ("BOFA") as syndication agent (in such capacity,
"SYNDICATION AGENT"), XXXXXX TRUST AND SAVINGS BANK ("XXXXXX") as documentation
agent (in such capacity, "DOCUMENTATION AGENT"), DEUTSCHE BANK CANADA ("DB
CANADA"), successor by amalgamation to BT BANK OF CANADA, as Canadian agent (in
such capacity, "CANADIAN AGENT") and BANKERS TRUST COMPANY ("BTCO"), as
administrative agent for Lenders (in such capacity, "AGENT"), and, for purposes
of Section 5 hereof, the Credit Support Parties (as defined in Section 5
hereof), and is made with reference to that certain Amended and Restated Credit
Agreement dated as of June 26, 1998, by and among Borrowers, Lenders,
Syndication Agent, Documentation Agent, Canadian Agent and Agent, as amended by
that certain First Amendment to Credit Agreement dated as of March 3, 2000 (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, Company desires to amend the Credit Agreement to (a) add
additional revolving loan commitments in the aggregate principal amount of
$30,000,000 which revolving loan commitments will be guarantied by Madison
Dearborn Capital Partners, L.P. ("MDCP"), (b) increase the interest rate on all
Loans, (c) amend the financial covenants, (d) amend the asset sale prepayment
provisions, (e) amend the clean down requirement for Working Capital Revolving
Loans and (f) make other amendments as set forth below, in each case subject to
the terms and conditions contained herein and in the Credit Agreement;
WHEREAS, Borrowers, Lenders and Agent desire to waive compliance by
Borrowers with the clean down requirements for Fiscal Year 2000 and certain
financial covenants for the Fiscal Quarter ended September 30, 2000, contained
in the Credit Agreement and to waive the required deposit of certain insurance
proceeds with Agent;
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
1.1 AMENDMENTS TO SECTION 1: DEFINITIONS.
-------------------------------------
A. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the definitions `APPLICABLE BASE RATE MARGIN', `APPLICABLE EURODOLLAR
RATE MARGIN', `CLASS', `COMMITMENT FEE PERCENTAGE', `CONSOLIDATED AVERAGE DEBT',
`CONSOLIDATED CURRENT LIABILITIES', `CONSOLIDATED EXCESS CASH FLOW',
`CONSOLIDATED LEVERAGE RATIO', `DOMESTIC LOANS', `GUARANTIES', `LOAN PARTY',
`NOTES', `PRO RATA SHARE', `REQUISITE CLASS LENDERS', `REVOLVING LOAN
COMMITMENT', `REVOLVING LOAN EXPOSURE', `REVOLVING LOANS', and `REVOLVING
NOTES', contained therein in their entirety and by respectively substituting the
following therefor:
`APPLICABLE BASE RATE MARGIN' means as of any date of determination,
(i) with respect to the Loans other than the Tranche B Term Loans and Revolving
B Loans, a percentage per annum as set forth below opposite the applicable
Consolidated Leverage Ratio; provided that from the Second Amendment Effective
Date until the delivery of the first Compliance Certificate after the Second
Amendment Effective Date, Company's Consolidated Leverage Ratio shall be deemed
to be 4.75:1.00 and the Applicable Base Rate Margin shall be determined
accordingly; (ii) with respect to the Tranche B Term Loans, 2.75% per annum; and
(iii) with respect to the Revolving B Loans, 2.25% per annum:
DOMESTIC TERM LOANS, CANADIAN TERM LOANS, ACQUISITION LOANS, WORKING
CAPITAL REVOLVING LOANS AND SWING LINE LOANS:
Applicable Base
CONSOLIDATED LEVERAGE RATIO RATE MARGIN
--------------------------- ---------------
Greater than or equal to 4.75:1.00 2.500%
Greater than or equal to 4.50:1.00 2.250%
but less than 4.75:1.00
Greater than or equal to 4.25:1.00 2.000%
but less than 4.50:1.00
Greater than or equal to 4.00:1.00 1.750%
but less than 4.25:1.00
Greater than or equal to 3.75:1.00 1.500%
but less than 4.00:1.00
Greater than or equal to 3.50:1.00 1.250%
but less than 3.75:1.00
Greater than or equal to 3.00:1.00 1.000%
but less than 3.50:1.00
Greater than or equal to 2.75:1.00 0.750%
but less than 3.00:1.00
Greater than or equal to 2.50:1.00 0.625%
but less than 2.75:1.00
Less than 2.50:1.00 0.500%
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`APPLICABLE EURODOLLAR RATE MARGIN' means as of any date of
determination, (i) with respect to the Loans other than the Tranche B Term Loans
and Revolving B Loans, a percentage per annum as set forth below opposite the
applicable Consolidated Leverage Ratio; provided that from the Second Amendment
Effective Date until the delivery of the first Compliance Certificate after the
Second Amendment Effective Date, the Company's Consolidated Leverage Ratio shall
be deemed to be 4.75:1.00 and the Applicable Eurodollar Rate Margin shall be
determined accordingly; (ii) with respect to the Tranche B Term Loans, 3.75% per
annum; and (iii) with respect to the Revolving B Loans, 3.25% per annum:
DOMESTIC TERM LOANS, CANADIAN TERM LOANS, ACQUISITION LOANS AND WORKING
CAPITAL REVOLVING LOANS:
Applicable Eurodollar
CONSOLIDATED LEVERAGE RATIO RATE MARGIN
--------------------------- ---------------------
Greater than or equal to 4.75:1.00 3.500%
Greater than or equal to 4.50:1.00 3.250%
but less than 4.75:1.00
Greater than or equal to 4.25:1.00 3.000%
but less than 4.50:1.00
Greater than or equal to 4.00:1.00 2.750%
but less than 4.25:1.00
Greater than or equal to 3.75:1.00 2.500%
but less than 4.00:1.00
Greater than or equal to 3.50:1.00 2.250%
but less than 3.75:1.00
Greater than or equal to 3.00:1.00 2.000%
but less than 3.50:1.00
Greater than or equal to 2.75:1.00 1.750%
but less than 3.00:1.00
Greater than or equal to 2.50:1.00 1.625%
but less than 2.75:1.00
Less than 2.50:1.00 1.500%
`CLASS' means, as applied to Lenders, each of the six classes of
Lenders consisting of Lenders with (i) Domestic Term Loan Exposure, (ii)
Canadian Term Loan Exposure, (iii) Acquisition Loan Exposure, (iv) Working
Capital Revolving Loan Exposure, (v) Tranche B Term Loan Exposure, and (vi)
Revolving B Loan Exposure.
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`Commitment Fee Percentage' means, as at any date of determination,
with respect to the Revolving Loan Commitments, the percentage per annum set
forth below opposite the applicable Consolidated Leverage Ratio or the
applicable period:
A. WORKING CAPITAL REVOLVING LOAN COMMITMENT:
Commitment Fee
Consolidated Leverage Ratio PERCENTAGE
---------------------------------- -----------------
Greater than or equal to 3.50:1.00 0.50%
Less than 3.50:1.00 0.375%
b. Revolving B Loan Commitment:
Commitment Fee
Period PERCENTAGE
---------------------------------- -----------------
March 15 through June 15 0.50%
of 2001 and 2002
Second Amendment Effective Date 0.15%
through March 14, 2001;
June 16, 2001 through
March 14, 2002
`CONSOLIDATED AVERAGE DEBT' means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided that for purposes of calculating the amount of such Indebtedness
derived from Working Capital Revolving Loans and Revolving B Loans, the average
of the sum of (i) the outstanding Working Capital Revolving Loans and (ii) the
outstanding Revolving B Loans, in each case as of the last day of each month
over a rolling twelve-month period shall be used.
`CONSOLIDATED CURRENT LIABILITIES' means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, excluding the current portion of any Indebtedness,
including without limitation outstanding Working Capital Revolving Loans and
Revolving B Loans to the extent included in Consolidated Current Liabilities.
`CONSOLIDATED EXCESS CASH FLOW' means, for any period, an amount equal
to (i) the sum, without duplication, of the amounts for such period of (a) the
sum of Consolidated EBITDA and non-cash extraordinary losses which are expected
to have a cash impact on Company's financial statements during the term of this
Agreement, and (b) the Consolidated Working Capital Adjustment minus (ii) the
sum, without duplication, of the amounts for such period of (a) voluntary and
scheduled repayments of Indebtedness (excluding repayments of Working Capital
Revolving Loans and Revolving B Loans except to the extent the Working
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Capital Revolving Loan Commitments and Revolving B Loan Commitments are
permanently reduced in connection with such repayments and excluding repayments
of the Acquisition Loans prior to the Acquisition Loan Conversion Date), (b)
Consolidated Capital Expenditures (net of any proceeds of any related financings
with respect to such expenditures), (c) Consolidated Cash Interest Expense, and
(d) the provision for current taxes based on income of Company and its
Subsidiaries and payable in cash with respect to such period.
`CONSOLIDATED LEVERAGE RATIO' means as at any date of determination,
the ratio of Consolidated Average Debt as of the last day of the Fiscal Quarter
immediately preceding the Fiscal Quarter in which such date of determination
occurs to Consolidated EBITDA for the four Fiscal Quarters ending as of such
last day of such immediately preceding Fiscal Quarter.
`DOMESTIC LOANS' means the Acquisition Loans, the Working Capital
Revolving Loans, the Revolving B Loans or the Domestic Term Loans or any
combination thereof.
`GUARANTIES' means the Holdings Guaranty, the Company Guaranty, the
Domestic Subsidiary Guaranty, the Canadian Subsidiary Guaranty and the MDCP
Guaranty.
`LOAN PARTY' means each of the Borrowers, Holdings and any Subsidiary
party to a Loan Document and "Loan Parties" means all such Persons,
collectively.
`NOTES' means one or more of the Domestic Term Notes, the Tranche B
Term Notes, the Canadian Term Notes, the Acquisition Notes, the Working Capital
Revolving Notes, Revolving B Notes, or Swing Line Note or any combination
thereof.
`PRO RATA SHARE' means (i) with respect to all payments, computations
and other matters relating to the Domestic Term Loan Commitment or the Domestic
Term Loan of any Domestic Lender, the percentage obtained by dividing (x) the
Domestic Term Loan Exposure of that Domestic Lender by (y) the aggregate
Domestic Term Loan Exposure of all Domestic Lenders, (ii) with respect to all
payments, computations and other matters relating to the Acquisition Revolving
Loan Commitment or the Acquisition Loan Exposure of any Domestic Lender, the
percentage obtained by dividing (x) the Acquisition Loan Exposure of that
Domestic Lender by (y) the aggregate Acquisition Loan Exposure of all Domestic
Lenders, (iii) with respect to all payments, computations and other matters
relating to the Working Capital Revolving Loan Commitment or the Working Capital
Revolving Loans of any Domestic Lender or any Letters of Credit issued or
participations therein purchased by any Domestic Lender, the percentage obtained
by dividing (x) the Working Capital Revolving Loan Exposure of that Domestic
Lender by (y) the aggregate Working Capital Revolving Loan Exposure of all
Domestic Lenders, (iv) with respect to all payments, computations and other
matters relating to the Canadian Term Loan Commitment or the Canadian Term Loan
of any Canadian Lender, the percentage obtained by dividing (x) the Canadian
Term Loan Exposure of that Canadian Lender by (y) the aggregate Canadian Term
Loan Exposure of all Canadian Lenders, (v) with respect to all payments,
computations and other matters relating to the Tranche B Term Loan Commitment or
the Tranche B Term Loan of any Tranche B Term Loan Lender, the percentage
obtained by dividing (x) the Tranche B Term Loan Exposure of that Tranche B Term
Loan Lender by (y) the aggregate Tranche B Term Loan Exposure of all Tranche B
Term Loan Lenders, (vi) with respect to all payments, computations and other
matters relating to the Revolving B Loan Commitment or the Revolving B Loans of
any
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Domestic Lender, the percentage obtained by dividing (x) Revolving B Loan
Exposure of that Domestic Lender by (y) the aggregate Revolving B Loan Exposure
of all Domestic Lenders, and (vii) for all other purposes with respect to each
Lender, the percentage obtained by dividing (x) the sum of the Domestic Term
Loan Exposure of that Lender plus the Acquisition Loan Exposure of that Lender
plus the Working Capital Revolving Loan Exposure of that Lender plus the
Canadian Term Loan Exposure of that Lender plus the Tranche B Term Loan Exposure
of that Lender plus the Revolving B Loan Exposure of that Lender by (y) the sum
of the aggregate Domestic Term Loan Exposure of all Lenders plus the aggregate
Acquisition Loan Exposure of all Lenders plus the aggregate Working Capital
Revolving Loan Exposure of all Lenders plus the aggregate Canadian Term Loan
Exposure of all Lenders, plus the aggregate Tranche B Term Loan Exposure of all
Lenders plus the aggregate Revolving B Loan Exposure of all Lenders, in any such
case as the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 10.1. The initial Pro Rata Share of each Lender for
purposes of each of clauses (i), (ii), (iii), (iv), (v), (vi) and (vii) of the
preceding sentence is set forth opposite the name of that Lender in Schedule 2.1
annexed hereto.
`REQUISITE CLASS LENDERS' means, at any time of determination (i) for
the Class of Lenders consisting of Domestic Term Loan Lenders, Domestic Term
Loan Lenders having or holding more than 66-2/3% of the aggregate Domestic Term
Loan Exposure of all Domestic Term Loan Lenders, (ii) for the Class of Lenders
consisting of Acquisition Loan Lenders, Acquisition Loan Lenders having or
holding more than 66-2/3% of the aggregate Acquisition Loan Exposure of all
Acquisition Loan Lenders, (iii) for the Class of Lenders consisting of Working
Capital Revolving Loan Lenders, Working Capital Revolving Loan Lenders having or
holding more than 66-2/3% of the aggregate Working Capital Revolving Loan
Exposure of all Working Capital Revolving Loan Lenders, (iv) for the Class of
Lenders consisting of Canadian Lenders, Canadian Lenders having or holding more
than 66-2/3% of the aggregate Canadian Term Loan Exposure of all Canadian
Lenders, (v) for the Class of Lenders consisting of Tranche B Term Loan Lenders,
Tranche B Term Loan Lenders having or holding more than 66-2/3% of the aggregate
Tranche B Term Loan Exposure of all Tranche B Term Loan Lenders and (vi) for the
Class of Lenders consisting of Revolving B Loan Lenders, Revolving B Loan
Lenders having or holding more than 66-2/3% of the aggregate Revolving B Loan
Exposure of all Revolving B Loan Lenders.
`REVOLVING LOAN COMMITMENT' means the Acquisition Revolving Loan
Commitment, Working Capital Revolving Loan Commitment or Revolving B Loan
Commitment or any combination thereof.
`REVOLVING LOAN EXPOSURE' means the Acquisition Loan Exposure, the
Working Capital Revolving Loan Exposure and the Revolving B Loan Exposure or any
combination thereof.
`REVOLVING LOANS' means Acquisition Loans, Working Capital Revolving
Loans and Revolving B Loans or any combination thereof.
`REVOLVING NOTES' means the Acquisition Notes, the Working Capital
Revolving Notes, the Revolving B Notes, or any combination thereof.
6
B. Subsection 1.1 of the Credit Agreement is hereby further amended
by adding thereto the following definitions, which shall be inserted in proper
alphabetical order:
`LAGOON VALLEY PROPERTY' means that certain real property owned by
Company located in Vacaville, California.
`LAKE ELSINORE PROPERTY' means that certain real property to be
purchased and subsequently sold by Company located in Lake Elsinore, California.
`MDCP GUARANTY' means the MDCP Guaranty in an amount up to
$30,000,000, substantially in the form of Exhibit XXVII annexed hereto, as such
MDCP Guaranty may hereafter be amended, supplemented or otherwise modified from
time to time.
`PRO FORMA BASIS' means, for purposes of giving effect to any
transaction during any period on a pro forma basis, that such transaction (and
any other transactions that occurred during such period) shall be deemed to have
occurred as of the first day of the four Fiscal Quarter period most recently
ended immediately prior to the date of such transaction with respect to which
Agent has received the relevant financial information. As used in this
definition, "transaction" shall mean an acquisition permitted under subsection
7.7(v) or a disposition of any assets or operations in an amount for any such
transaction or series of related transactions exceeding $250,000, and the
incurrence, assumption, and/or repayment of any Indebtedness in connection
therewith. Calculations made on a pro forma basis shall be made in accordance
with Regulation S-X of the Securities and Exchange Commission and such
calculations shall be made after giving effect to the incurrence, assumption or
repayment of any Indebtedness in connection with such transaction.
`Revolving B Loan Commitment' means the commitment of a Domestic
Lender to make Revolving B Loans to Company pursuant to subsection 2.1A(vii),
and "REVOLVING B LOAN COMMITMENTS" means such commitments of all Domestic
Lenders in the aggregate.
`REVOLVING B LOAN COMMITMENT TERMINATION DATE' means June 15, 2002.
`REVOLVING B LOAN EXPOSURE' means with respect to any Domestic Lender
as of any date of determination (i) prior to the termination of the Revolving B
Loan Commitments, that Domestic Lender's Revolving B Loan Commitment and (ii)
after the termination of the Revolving B Loan Commitments, the aggregate
outstanding principal amount of the Revolving B Loans of that Domestic Lender.
`REVOLVING B LOAN LENDER' means any Lender having Revolving B Loan
Commitments or having Revolving B Loans outstanding.
`REVOLVING B LOANS' means the Loans made by Domestic Lenders to
Company pursuant to subsection 2.1A(vii).
`REVOLVING B NOTES' means (i) the promissory notes of Company issued
pursuant to subsection 2.1E on the Second Amendment Effective Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Revolving B Loan Commitments and
Revolving B Loans of any Domestic Lenders, in each
7
case substantially in the form of Exhibit IV-G annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
`SECOND AMENDMENT' means the Second Amendment to Credit Agreement and
Limited Waiver dated as of November 10, 2000, by and among Borrowers, Lenders,
Syndication Agent, Documentation Agent, Canadian Agent and Agent.
`SECOND AMENDMENT EFFECTIVE DATE' means November 10, 2000, the date on
which the Second Amendment became effective in accordance with its terms.
1.2 AMENDMENTS TO SECTION 2: AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.
-------------------------------------------------------------------
A. Subsection 2.1A of the Credit Agreement is hereby amended by adding
after the phrase "Swing Line Lender hereby agrees to make the Loans described in
subsection 2.1A(v)" the phrase "and each Revolving B Loan Lender hereby
severally agrees to make the Loans described in subsection 2.1A(vii)".
B. Paragraph (b) of subsection 2.1A(iv) of the Credit Agreement is
hereby amended by deleting the reference to "sixty consecutive days" and
substituting therefor "thirty consecutive days" and deleting the table in its
entirety and substituting the following therefor:
"Fiscal Year 2001 $70,000,000
Fiscal Year 2002 $95,000,000"
C. Subsection 2.1A(v) of the Credit Agreement is hereby amended by
deleting the number "$5,000,000" that appears immediately before the first
proviso and substituting therefor the number "$7,500,000".
D. The first paragraph of subsection 2.1A(v)(c) of the Credit
Agreement is hereby amended by deleting the reference to "sixty consecutive
days" and substituting therefor "thirty consecutive days" and deleting the table
following such first paragraph in its entirety and substituting the following
therefor :
"Fiscal Year 2001 $70,000,000
Fiscal Year 2002 $95,000,000"
E. Subsection 2.1A of the Credit Agreement is hereby amended by adding
at the end thereof a new subsection (vii) as follows:
"(vii) Revolving B Loans. Each Revolving B Loan Lender severally
agrees, subject to the limitations set forth below in the last sentence
hereof, to lend to Company from time to time during the period from the
Second Amendment Effective Date to the Revolving B Loan Commitment
Termination Date an aggregate amount not exceeding its Pro Rata Share of
the aggregate amount of the Revolving B Loan Commitment to be used for the
purposes identified in subsection 2.5F. The amount of each Revolving B Loan
Lender's Revolving B Loan Commitment is set forth opposite its name on
Schedule 2.1
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annexed hereto and the aggregate amount of the Revolving B Loan Commitments
as of the Second Amendment Effective Date is $30,000,000; provided that the
Revolving B Loan Commitment of Lenders shall be adjusted to give effect to
any assignments of the Revolving B Loan Commitment pursuant to subsection
10.1B; and provided further, that the Revolving B Loan Commitment shall be
reduced from time to time by the amount of any reductions thereto made
pursuant to subsections 2.4B(ii) and 2.4B(iii). Each Revolving B Loan
Lender's Revolving B Loan Commitment shall expire on the Revolving B Loan
Commitment Termination Date and all Revolving B Loans and all other amounts
owed hereunder with respect to the Revolving B Loans and the Revolving B
Loan Commitments shall be paid in full no later than that date. Amounts
borrowed under this subsection 2.1A(vii) may be repaid and reborrowed to
but excluding the Revolving B Loan Commitment Termination Date; provided
that from the Second Amendment Effective Date through March 14, 2001 and
from June 16, 2001 through March 14, 2002, the Company may not have any
outstanding Revolving B Loans."
F. Subsection 2.1B of the Credit Agreement is hereby amended by
inserting "and" immediately prior to clause (viii) thereof and by deleting
clause (ix) in its entirety.
G. Subsection 2.1E of the Credit Agreement is hereby amended by adding
a sentence at the end thereof as follows:
"Company shall execute and deliver to each Revolving B Loan Lender on
the Second Amendment Effective Date a Revolving B Loan Note substantially
in the form of Exhibit IV-G annexed hereto to evidence such Revolving B
Loan Lender's Revolving B Loan, in the principal amount of that Revolving B
Loan Lender's Revolving B Loan Commitment and with other appropriate
insertions."
H. Subsection 2.2A of the Credit Agreement is hereby amended by
deleting the last paragraph thereof in its entirety and substituting the
following therefor:
"The Applicable Base Rate Margin or the Applicable Eurodollar Rate
Margin shall be determined in accordance with the definitions of such
terms, in each case for the four fiscal quarters ending as of the last day
of the fiscal quarter immediately preceding the fiscal quarter during which
the determination is being made as set forth in the Compliance Certificate
delivered pursuant to subsection 6.1(iv)(b), any required adjustment to
become automatically effective on the next succeeding Business Day
following receipt by the Agent of such Compliance Certificate. If Company
fails to deliver a Compliance Certificate by the time required by
subsection 6.1(iv)(b), from such time the Compliance Certificate was
required to be delivered until delivery of such Compliance Certificate, the
Applicable Base Rate Margin and the Applicable Eurodollar Rate Margin shall
automatically be adjusted to the highest level set forth for such Base Rate
Loans or Eurodollar Rate Loans, respectively."
I. Subsection 2.2B(v) of the Credit Agreement is hereby amended by
deleting the ";" and adding the following at the end thereof:
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"and no Interest Period with respect to the Revolving B Loans shall
extend beyond June 15, 2001, in the case of Revolving B Loans borrowed in
2001, and beyond June 15, 2002, in the case of Revolving B Loans borrowed
in 2002;"
J. Subsection 2.2B(vii) of the Credit Agreement is hereby amended by
deleting the phrase "15 Interest Periods" and substituting therefor the phrase
"20 Interest Periods".
K. Subsection 2.3 of the Credit Agreement is hereby amended (i) by
deleting the phrase "Pro Rata Share of the Working Capital Revolving Loan
Commitments and the Acquisition Revolving Loan Commitments, as the case may be,"
and by substituting the following therefor:
"Pro Rata Share of the Working Capital Revolving Loan Commitments, the
Acquisition Revolving Loan Commitments, and the Revolving B Loan
Commitments, as the case may be,"; and
(ii) by deleting the "and" before clause (ii), inserting a comma before such
clause (ii) and adding a new clause (iii) as follows:
"and (iii) for the period from and including the Second Amendment
Effective Date to and excluding the Revolving B Loan Commitment Termination
Date equal to the average of the daily excess of the Revolving B Loan
Commitments over the aggregate principal amount of outstanding Revolving B
Loans multiplied by the Commitment Fee Percentage, such commitment fees to
be calculated on the basis of a 360-day year and the actual number of days
elapsed and to be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on the first such
date to occur after the Second Amendment Effective Date, and on the
Revolving B Loan Commitment Termination Date."
L. Subsection 2.4B(ii) of the Credit Agreement is hereby amended by
deleting the "and" immediately before clause (b) and adding a new clause (c)
immediately prior to the proviso in the first sentence thereof, as follows:
"and (c) the Revolving B Loan Commitments in an amount up to the amount by
which the Revolving B Loan Commitments exceed the aggregate outstanding
Revolving B Loans at the time of such proposed termination or reduction,"
M. Subsection 2.4B(iii)(a) of the Credit Agreement is hereby amended
by deleting it in its entirety and substituting the following therefor:
"Prepayments and Reductions From Net Asset Sale Proceeds. (i) No
later than the first Business Day following the date of receipt by the
applicable Borrower or any of its Subsidiaries of Net Asset Sale Proceeds
other than Net Asset Sale Proceeds covered by clauses (ii) and (iii) of
this subsection 2.4B(iii)(a), such Borrower shall prepay the Loans and/or
the Revolving Loan Commitments shall be permanently reduced in an aggregate
amount equal to such Net Asset Sale Proceeds; (ii) Company may retain up to
$3,000,000 in aggregate Net Asset Sale Proceeds from the sale of the Lake
Elsinore Property; and (iii) Company may retain up to $15,000,000 in
aggregate Net Asset Sale Proceeds from the sale
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of its Lagoon Valley Property; provided that Company reinvests such Net
Asset Sale Proceeds within twenty-four months of the receipt of such Net
Asset Sale Proceeds in Replacement Assets (as such term is defined in the
definition of Consolidated Capital Expenditures)."
N. Subsection 2.4B(iii)(f) of the Credit Agreement is hereby amended by
deleting it in its entirety and by substituting the following therefor:
"(f) Prepayments Due to Reductions or Restrictions of Revolving Loan
Commitments. Company shall from time to time prepay first the Swing Line
Loans and second the Working Capital Revolving Loans to the extent
necessary so that the Total Utilization of Working Capital Revolving Loan
Commitments shall not at any time exceed the Working Capital Revolving Loan
Commitments then in effect. Company shall from time to time prepay the
Revolving B Loans to the extent necessary to give effect to the limitations
set forth in the last sentence of subsection 2.1A(vii)."
O. Subsection 2.4B(iv)(a) of the Credit Agreement is hereby amended by
deleting the second and third clauses thereof in their entirety and by inserting
in lieu thereof the following:
"second, to repay outstanding Revolving B Loans to the full extent
thereof, third to repay outstanding Working Capital Revolving Loans to the
full extent thereof,"
P. Subsection 2.4B(iv)(b) of the Credit Agreement is hereby amended by
deleting the phrase "and fourth" and inserting in lieu thereof the following:
"fourth to the extent of any remaining portion of the Applied Amount,
to prepay the Revolving B Loans to the full extent thereof without
permanently reducing the Revolving B Loan Commitments, and fifth,"
Q. Subsection 2.4D(ii) of the Credit Agreement is hereby amended by
deleting the phrases "Subsidiary Guaranty" and "Holdings or the applicable
Subsidiary guarantor" and substituting therefor the phrases "Guaranties" and
"applicable guarantor", respectively.
R. Subsection 2.5 of the Credit Agreement is hereby amended by adding
a subsection 2.5F as follows:
"F. REVOLVING B LOANS. The proceeds of the Revolving B Loans shall
be applied by Company for working capital and general corporate purposes."
1.3 AMENDMENTS TO SECTION 7: COMPANY'S NEGATIVE COVENANTS.
A. Subsection 7.6A of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
"A. MINIMUM INTEREST COVERAGE RATIO. Company shall not permit the
ratio of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense for any
four Fiscal Quarter period ending in the last day of the applicable Fiscal
Quarter set forth below to be less than the correlative ratio indicated:
11
Minimum Interest
Period Coverage Ratio
------ -----------------
3rd Fiscal Quarter, 2000 2.25:1.00
4th Fiscal Quarter, 2000 2.00:1.00
1st Fiscal Quarter, 2001 1.90:1.00
2nd Fiscal Quarter, 2001 1.80:1.00
3rd Fiscal Quarter, 2001 1.80:1.00
4th Fiscal Quarter, 2001 1.83:1.00
1st Fiscal Quarter, 2002 1.86:1.00
2nd Fiscal Quarter, 2002 1.95:1.00
3rd Fiscal Quarter, 2002 2.00:1.00
4th Fiscal Quarter, 2002 3.00:1.00
1st Fiscal Quarter, 2003 3.00:1.00
2nd Fiscal Quarter, 2003 3.25:1.00
3rd Fiscal Quarter, 2003 3.25:1.00
4th Fiscal Quarter, 2003 3.50:1.00
1st Fiscal Quarter, 2004 3.50:1.00
2nd Fiscal Quarter, 2004 3.50:1.00
3rd Fiscal Quarter, 2004 3.50:1.00
4th Fiscal Quarter, 2004
and thereafter 3.50:1.00"
B. Subsection 7.6B of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
"B. MAXIMUM CONSOLIDATED LEVERAGE RATIO. Company shall not permit its
Consolidated Leverage Ratio, calculated on a Pro Forma Basis, as of the
last day of any Fiscal Quarter set forth below for the four Fiscal Quarter
period ending on such day to exceed the correlative ratio indicated:
Maximum Consolidated
Period Leverage Ratio
------ ----------------------
3rd Fiscal Quarter, 2000 4.90:1.00
4th Fiscal Quarter, 2000 5.05:1.00
1st Fiscal Quarter, 2001 5.05:1.00
2nd Fiscal Quarter, 2001 5.05:1.00
3rd Fiscal Quarter, 2001 4.95:1.00
4th Fiscal Quarter, 2001 4.90:1.00
12
1st Fiscal Quarter, 2002 4.90:1.00
2nd Fiscal Quarter, 2002 4.60:1.00
3rd Fiscal Quarter, 2002 4.30:1.00
4th Fiscal Quarter, 2002 3.25:1.00
1st Fiscal Quarter, 2003 3.25:1.00
2nd Fiscal Quarter, 2003 3.00:1.00
3rd Fiscal Quarter, 2003 3.00:1.00
4th Fiscal Quarter, 2003 3.00:1.00
1st Fiscal Quarter, 2004 2.75:1.00
2nd Fiscal Quarter, 2004 2.75:1.00
3rd Fiscal Quarter, 2004 2.75:1.00
4th Fiscal Quarter, 2004
and thereafter 2.75:1.00"
C. Subsection 7.6 of the Credit Agreement is hereby amended by adding
a new subsection 7.6D as follows:
"D. MINIMUM CONSOLIDATED EBITDA. Company shall not permit
Consolidated EBITDA for any four Fiscal Quarter period ending on the last
day of any Fiscal Quarter set forth below to be less than the correlative
amount indicated; provided, however, that in the event a disposition of
assets or operations in an amount in excess of $250,000 (other than a sale
or disposition of the Lagoon Valley Property) occurs in a Fiscal Quarter
included in the period for which Consolidated EBITDA is being determined,
Consolidated EBITDA shall be calculated on a Pro Forma Basis and the number
set forth below shall be reduced by an amount which is equal to 90% of the
Consolidated EBITDA generated by the assets or operations so disposed of
for the four Fiscal Quarter period for which the determination is being
made:
Minimum
Period Consolidated EBITDA
------ -------------------
4th Fiscal Quarter, 2000 $ 75,000,000
1st Fiscal Quarter, 2001 $ 75,000,000
2nd Fiscal Quarter, 2001 $ 75,000,000
3rd Fiscal Quarter, 2001 $ 76,000,000
4th Fiscal Quarter, 2001 $ 77,000,000
1st Fiscal Quarter, 2002 $ 78,000,000
2nd Fiscal Quarter, 2002 $ 80,000,000
3rd Fiscal Quarter, 2002 and thereafter $ 81,000,000"
D. Subsection 7.7(iv) of the Credit Agreement is hereby amended by
deleting the text in such subsection immediately preceding the first proviso in
such subsection and by substituting the following therefor:
13
"subject to subsection 7.13, Company and its Subsidiaries may make
Asset Sales of (I) the Lake Elsinore Property and Lagoon Valley Property;
provided that (x) the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof (as reasonably
determined by the Board of Directors of Company); and (y) the proceeds of
such Asset Sales shall be applied as required by subsection 2.4B(iii)(a);
and (II) assets having a fair market value not in excess of $1,000,000;"
E. Subsection 7.7(v) of the Credit Agreement is hereby amended (i) by
deleting the phrase "Company is in pro forma compliance with its financial
covenants" from clause (c) thereof and by inserting in lieu thereof the phrase
"Company is in compliance with its financial covenants, calculated on a Pro
Forma Basis" and (ii) by deleting "$25,000,000" in clause (e) thereof and
substituting therefor the following: "$3,000,000 and to aggregate acquisitions
after the Second Amendment Effective Date in excess of $10,000,000".
F. Subsection 7.8 of the Credit Agreement is hereby amended by
deleting the table set forth therein in its entirety and substituting the
following therefor:
Maximum
Consolidated Capital
"Period Expenditure
--------------------- --------------------
Fiscal Year, 2000 $39,200,000
Fiscal Year, 2001 and thereafter $15,500,000
G. Subsection 8.5 of the Credit Agreement is hereby amended by
deleting the phrase "Any Borrower or any of its Subsidiaries" and inserting in
substitution therefor the phrase "Any Borrower, any of its Subsidiaries or
MDCP".
H. Subsection 8.13 of the Credit Agreement is hereby amended by
adding immediately after the phrase "or any Loan Party" the words "or MDCP" and
deleting the "; or" at the end of the paragraph and adding the following clause.
", or any "Event of Default" as defined or described in the MDCP
Guaranty shall have occurred and be continuing; or"
I. Subsection 9.6 of the Credit Agreement is hereby amended by
deleting the phrase "without the prior consent of Requisite Lenders," and
substituting therefor the following:
"without the prior written consent of Requisite Lenders, and in the case of
the MDCP Guaranty, Agent shall not enter into or consent to any
termination, release, amendment, modification or waiver of any provision
contained in the MDCP Guaranty without the prior written consent of the
Lenders holding a majority of the Revolving B Loan Exposure,"
14
1.4 Amendment to Section 10: Miscellaneous.
A. Subsection 10.1B (i) of the Credit Agreement is hereby amended (i)
by deleting the reference to "or Exhibit IV-F" contained in the last sentence
thereof in its entirety and substituting therefor the phrase ", Exhibit IV-F or
Exhibit IV-G".
B. Subsection 10.5A of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
"A. Amounts Owed by Company. Lenders other than Canadian Lenders
hereby agree among themselves that if any of them shall, whether by
voluntary payment (other than a voluntary prepayment of Loans made and
applied in accordance with the terms of this Agreement), by realization
upon security, through the exercise of any right of set-off or banker's
lien, by counterclaim or cross action or by the enforcement of any right
under the Loan Documents or otherwise (other than with respect to the MDCP
Guaranty as to which the provisions of this subsection 10.5A shall apply
only as among the Revolving B Loan Lenders and not with respect to Lenders
other than the Revolving B Loan Lenders), or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive
payment or reduction of a proportion of the aggregate amount of principal,
interest, amounts payable in respect of Letters of Credit, fees and other
amounts then due and owing to that Lender hereunder or under the other Loan
Documents (collectively, the "Aggregate Amounts Due" to such Lender) which
is greater than the proportion received by any other Lender in respect of
the Aggregate Amounts Due to such other Lender, then such Lender receiving
such proportionately greater payment shall (i) notify Agent and each other
such Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have
purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to such other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all such Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is
thereafter recovered from such Lender upon the bankruptcy or reorganization
of Company or otherwise, those purchases shall be rescinded and the
purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without
interest. Company expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may exercise any and
all rights of banker's lien, set-off or counterclaim with respect to any
and all monies owing by Company to that holder with respect thereto as
fully as if that holder were owed the amount of the participation held by
that holder."
1.6 Substitution of Schedules.
A. Schedule 2.1 to the Credit Agreement is hereby amended by deleting
said Schedule 2.1 in its entirety and substituting in place thereof a new
Schedule 2.1 in the form of Annex G annexed hereto.
15
1.7 AMENDMENTS AND ADDITIONS TO EXHIBITS.
------------------------------------
A. Notice of Borrowing. Exhibit I to the Credit Agreement is hereby
amended by deleting it in its entirety and substituting therefor a new Exhibit I
in the form of Annex A annexed hereto.
B. Notice of Continuation/Conversion. Exhibit II to the Credit
Agreement is hereby amended by deleting it in its entirety and substituting
therefor a new Exhibit II in the form of Annex D hereto.
C. Revolving Note. The Exhibits to the Credit Agreement are hereby
amended by adding a new Exhibit IV-G in the form of Annex C annexed hereto.
D. Notice of Commencement of Clean Down Period. Exhibit V to the
Credit Agreement is hereby amended by deleting Exhibit V in its entirety and
substituting therefor a new Exhibit V in the form of Annex H hereto.
E. Assignment Agreement. Exhibit IX to the Credit Agreement is
hereby amended by deleting it in its entirety and substituting therefor a new
Exhibit IX in the form of Annex B hereto.
F. MDCP Guaranty. The Exhibits to the Credit Agreement are hereby
amended by adding a new Exhibit XXVII in the form of Annex E hereto.
Section 2. WAIVERS
A. Maximum Consolidated Leverage Ratio. Subject to the terms and
conditions set forth herein and in reliance on the representations and
warranties of Company herein contained, Lenders hereby waive compliance with the
Consolidated Leverage Ratio for the Fiscal Quarter ending September 30, 2000 as
set forth in subsection 7.6B of the Credit Agreement; provided however, that
Company's Consolidated Leverage Ratio for the Fiscal Quarter ending September
30, 2000 determined in accordance with subsection 7.6B shall not exceed
4.90:1.00.
B. Fiscal Year 2000 Clean Down. Lenders hereby waive compliance with
the clean down provisions contained in subsections 2.1A(iv)(b) and 2.1A(v)(c) of
the Credit Agreement for Fiscal Year 2000.
C. Insurance. Lenders hereby waive compliance with the provisions in
subsection 6.4(ii)(a)(B) that require Company to deposit in a cash collateral
account with Agent any insurance proceeds received in excess of $1,000,000 with
respect to any insurance proceeds received with respect to the Sun Gro plant in
Seba Beach, Alberta, Canada (the "Sun Gro Plant") as a result of damages
occurring to the Sun Gro Plant on November 4, 2000; provided that Company
delivers to Agent (i) a certificate certifying that Company intends to use all
such insurance proceeds received to expeditiously effect the repair and
restoration of the Sun Gro Plant and setting forth in the certificate the
expected cost and time period to complete such repairs and restorations, and
(ii) from time to time, such progress reports demonstrating Company's continued
expeditious repair and restoration of the Sun Gro Plant as may be requested by
Agent; and provided further, that the Company applies such insurance proceeds,
within one business day of
16
receipt of such insurance proceeds, to reduce the Revolving Loans, but without
any permanent reduction of the Revolving Loan Commitments and thereafter
maintains availability under the Revolving Loan Commitments in an amount equal
to such insurance proceeds until such insurance proceeds are applied to the
repair or restoration of the Sun Gro Plant.
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 "SECOND
AMENDMENT EFFECTIVE DATE"):
A. Company Documents. On or before the Second 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 Second Amendment
Effective Date:
1. Certified copies of the Certificate or Articles of Incorporation
of Company, together with a good standing certificate from the Secretary of
State of its jurisdiction of incorporation and each other state in which
Company is qualified as a foreign corporation to do business and, to the
extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes from
the appropriate taxing authority of each of such jurisdictions, each dated
a recent date prior to the Second Amendment Effective Date;
2. Copies of the Bylaws of Company, certified as of the Second
Amendment Effective Date by Company's corporate secretary or an assistant
secretary;
3. Resolutions of its Board of Directors approving and authorizing
the execution, delivery, and performance of this Amendment, the Revolving B
Loan Commitments, the Revolving B Notes and the other Loan Documents to be
executed on the Second Amendment Effective Date, such resolutions certified
as of the Second Amendment Effective Date by its corporate secretary or an
assistant secretary as being in full force and effect without modification
or amendment;
4. Signature and incumbency certificates of its officers executing
this Amendment, the Revolving B Notes and other Loan Documents to be
executed on the Second Amendment Effective Date; and
5. Executed copies of this Amendment, the Revolving B Notes and the
other Loan Documents to be executed on the Second Amendment Effective Date.
B. MDCP Guaranty Documents. On or before the Second Amendment
Effective Date, MDCP or the general partner of MDCP, as appropriate, shall have
delivered to Agent the following, each, unless otherwise noted, dated the Second
Amendment Effective Date:
1. Certified copies of the organizational documents of such Person,
together with a good standing certificate from the Secretary of State of
its jurisdiction of organization, each dated a recent date prior to the
Second Amendment Effective Date;
17
2. Resolutions of the Board of Directors of such Person (or, if such
Person is a limited partnership, of the general partner of such Person)
approving and authorizing the execution, delivery and performance of the
Loan Documents to which it is a party, certified as of the Second Amendment
Effective Date by the corporate secretary or an assistant secretary of such
Person (or such general partner, as the case may be) as being in full force
and effect without modification or amendment;
3. Signature and incumbency certificates of the officers of such
Person (or, if such Person is a limited partnership, of the general partner
of such Person) executing the Loan Documents to which it is a party;
4. Executed originals of the MDCP Guaranty;
5. A certificate of the general partner of MDCP certifying as to the
compliance of the MDCP Guaranty with the terms and conditions of the MDCP
Limited Partnership Agreement, such certificate to be in form and substance
reasonably satisfactory to Agent; and
6. Such other documents as Agent may reasonably request.
C. Execution of Amendment by Lenders. On or before the Second
Amendment Effective Date, Requisite Lenders and all Revolving B Loan Lenders
shall have executed and delivered copies of this Amendment to Agent.
D. Legal Opinions. On or before the Second Amendment Effective Date,
Lenders shall have received originally executed copies of one or more favorable
written opinions of counsel for Company, substantially in the form of Annex F
annexed hereto, dated as of the Second Amendment Effective Date, and as to such
other matters as Agent acting on behalf of Lenders may reasonably request.
E. Fees. On or before the Second Amendment Effective Date, Company
shall pay (x) to each Revolving B Loan Lender an upfront fee of 1.125% of the
aggregate amount of such Lender's Revolving B Loan Commitment; (y) to each
Lender which executes and delivers this Amendment on or before the Second
Amendment Effective Date an amendment fee in an amount equal to 0.375% of the
aggregate amount of such Lender's Term Loans and Revolving Loan Commitments
under the Credit Agreement (as in effect immediately prior to this Amendment);
and (y) to Agent such other fees as have been mutually agreed upon in writing by
Company and Agent.
F. No Material Adverse Effect. Since December 31, 1999, no Material
Adverse Effect (in the opinion of Agent) shall have occurred with respect to
Company.
G. Representations and Warranties; Performance of Agreements.
Company shall have delivered to Agent an Officers' Certificate, in form and
substance satisfactory to Agent, to the effect that the representations and
warranties herein and in Section 5 of the Credit Agreement are true, correct and
complete in all material respects on and as of the Second Amendment Effective
Date to the same extent as though made on and as of that date (or, to the extent
such representations and warranties specifically relate to an earlier date, that
such
18
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company shall have performed
in all material respects all agreements and satisfied all conditions which this
Amendment or the Credit Agreement provides shall be performed or satisfied by it
on or before the Second Amendment Effective Date except as otherwise disclosed
to and agreed to in writing by Agent and Requisite Lenders.
H. Amendment of the Subordinated Note Indenture. On or before the
Second Amendment Effective Date, the Subordinated Note Indenture will have been
amended to include all outstanding Loans and Commitments under the Credit
Agreement, after giving effect to the Revolving B Loan Commitments, as
"Permitted Indebtedness" under clause (ii) of the definition thereof.
I. Other Proceedings. On or before the Second 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.
Section 4. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Borrowers represent and
warrant 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, to issue the
Revolving B Notes and to carry out the transactions contemplated by, and perform
its obligations under, the Credit Agreement as amended by this Amendment (the
"Amended Agreement") and the Revolving B Notes.
B. Authorization of Agreements. The execution and delivery of this
Amendment, the Revolving B Notes, the performance of the Amended Agreement and
the Revolving B Notes, and the payment of the Revolving B Notes 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 Revolving B Notes and the performance by Company of the
Amended Agreement and the Revolving B Notes 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,
19
except for such approvals or consents which will be obtained on or before the
Second Amendment Effective Date and disclosed in writing to Lenders.
D. Governmental Consents. The execution and delivery by Company of
this Amendment and the Revolving B Notes and the performance by Company of this
Amendment and the Revolving B Notes 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 and the Revolving B Notes have
been duly executed and delivered by Company and are the legally valid and
binding obligations of Company, enforceable against Company 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.
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 Second 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.
G. Absence of Default. After giving effect to the waivers contained
in Section 2 of this Amendment, 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
Each Borrower is a party to certain Collateral Documents, in each case
as amended through the Second Amendment Effective Date, pursuant to which such
Borrower has created Liens in favor of Agent on certain Collateral to secure the
Obligations. Each of the Borrowers, Xxxxx Horticulture, Inc. and Sun Gro
Horticulture Inc. (collectively, the "Credit Support Parties") is a party to
certain Guaranties and Collateral Documents, in each case as amended through the
Second Amendment Effective Date, pursuant to which such Credit Support Party has
(i) guarantied the Obligations and (ii) 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,"
20
"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 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 Second 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 Second 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.
21
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.
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.
22
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.
BORROWERS:
XXXXX NURSERIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------
Title: C.F.O.
------
SUN GRO HORTICULTURE CANADA LTD.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------
Title: C.F.O.
------
CREDIT SUPPORT PARTIES:
XXXXX HORTICULTURE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------
Title: C.F.O.
------
SUN GRO HORTICULTURE INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------
Title: C.F.O.
------
23
LENDERS:
BANKERS TRUST COMPANY,
as a Domestic Lender, Tranche B Term Loan
Lender, Agent and Issuing Lender
By: /s/ Xxxx Xx Xxxxx
-----------------
Name: Xxxx Xx Xxxxx
-------------
Title: Assistant Vice President
------------------------
DEUTSCHE BANK AG, NEW YORK BRANCH, as
Issuing Lender
By:
---------------------------
Title:
------------------------
DEUTSCHE BANK CANADA,
as Canadian Agent
By:
---------------------------
Title:
------------------------
MONUMENT CAPITAL LIMITED,
as Assignee
By: ALLIANCE CAPITAL MANAGEMENT L.P., as
Investment Manager
By: ALLIANCE CAPITAL MANAGEMENT
CORPORATION, as General Partner
By: /s/ Sverker M.M. Johansson
--------------------------
Name: Sverker M.M. Johansson
----------------------
Title: Vice President
--------------
24
OAK MOUNTAIN LIMITED,
as Assignee
By: Alliance Capital Management L.P., as
Investment Manager
By: Alliance Capital Management
Corporation, as General Partner
By: /s/ Sverker M.M. Johansson
--------------------------
Name: Sverker M.M. Johansson
----------------------
Title: Vice President
--------------
AIMCO CDO SERIES 2000-A,
as a Lender
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxxx X. Xxxxxx
------------------
Title: Authorized Signatory
--------------------
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
----------------
Title: Authorized Signatory
--------------------
ALLSTATE LIFE INSURANCE COMPANY,
as a Lender
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
----------------
Title: Authorized Signatory
--------------------
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxxx X. Xxxxxx
------------------
Title: Authorized Signatory
--------------------
25
BANK OF AMERICA, NATIONAL TRUST & SAVINGS
ASSOCIATION,
as a Lender and as Syndication Agent
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
---------------------------------
Title: Vice President
---------------------------------
BANK OF MONTREAL,
as a Lender
By: /s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
---------------------------------
Title: Senior Manager, Corporate Finance
---------------------------------
BANK OF NOVA SCOTIA,
as a Lender
By: /s/ X. X. Xxxxxxxx
---------------------------------
Name: X. X. Xxxxxxxx
---------------------------------
Title: Director
---------------------------------
BAY VIEW FINANCIAL CORPORATION,
as a Lender
By:
---------------------------------
Title:
---------------------------------
BLACK DIAMOND CLO 2000-1 LTD.,
as a Lender
By: /s/ Xxxxx Xxxx
---------------------------------
Name: Xxxxx Xxxx
---------------------------------
Title: Director
---------------------------------
S-4
BOEING CAPITAL CORPORATION,
as a Lender
By: Not Legible
----------------------------
Name: Not Legible
----------------------------
Title: Senior Documentation Officer
----------------------------
CANADIAN IMPERIAL BANK OF COMMERCE, as a
Lender
By: /s/ Xxxxx Xxxx
----------------------------
Name: Xxxxx Xxxx
----------------------------
Title: Authorized Signatory
----------------------------
KZH CYPRESSTREE-1 LLC,
as a Lender
By: CHASE MANHATTAN BANK
By: /s/ Xxxxxxxx Xxxx
-----------------------
Name: Xxxxxxxx Xxxx
-----------------------
Title: Authorized Agent
-----------------------
KZH SHOSHONE LLC,
as a Lender
By: CHASE MANHATTAN BANK
By: /s/ Xxxxxxxx Xxxx
-----------------------
Name: Xxxxxxxx Xxxx
-----------------------
Title: Authorized Agent
-----------------------
S-5
CREDIT AGRICOLE INDOSUEZ,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
---------------------------
Title: Vice President, Manager
---------------------------
By: /s/ Xxxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxxx X. Xxxx
---------------------------
Title: Senior Relationship Manager
---------------------------
CYPRESSTREE INVESTMENT FUND, LLC,
as a Lender
By: CYPRESSTREE INVESTMENT MANAGEMENT CO.,
INC.
By: Not Legible
----------------------
Name: Not Legible
----------------------
Title: Principal
----------------------
CYPRESSTREE INVESTMENT PARTNERS I, LLC, as a
Lender
By: CYPRESSTREE INVESTMENT MANAGEMENT CO.,
INC.
By: Not Legible
-----------
Name: Not Legible
-----------
Title: Principal
---------
S-6
CYPRESSTREE--NORTH AMERICAN SENIOR FLOATING
RATE FUND,
as a Lender
By: CYPRESSTREE INVESTMENT MANAGEMENT CO.,
INC.
By: Not Legible
-----------
Name: Not Legible
-----------
Title: Principal
---------
CYPRESSTREE SENIOR FLOATING RATE FUND, as a
Lender
By: CYPRESSTREE INVESTMENT MANAGEMENT CO.,
INC.
By: Not Legible
-----------
Name: Not Legible
-----------
Title: Principal
---------
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN
BRANCHES,
as a Lender
By: Not Legible
-----------
Name: Not Legible
-----------
Title: Vice President
--------------
By: Not Legible
-----------
Name: Not Legible
-----------
Title: Assistant Treasurer
-------------------
FLEET NATIONAL BANK,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------
Title: Vice President
--------------
S-7
FRANKLIN FLOAT RATE TRUST,
as a Lender
By: /s/ Xxxxxxxx Xxxxxx
-------------------
Name: Xxxxxxxx Xxxxxx
---------------
Title: Vice President
--------------
FREMONT INVESTMENT & LOAN,
as a Lender
By: /s/ Xxxxxxx Xxxxxxx
-------------------
Name: Xxxxxxx Xxxxxxx
---------------
Title: Vice President
--------------
HARCH CLO I LIMITED,
as a Lender
By: HARCH CAPITAL MANAGEMENT, INC.
By:___________________
Title:________________
XXXXXX TRUST AND SAVINGS BANK,
as a Lender and Documentation Agent
By: Not Legible
-----------
Name: Not Legible
-----------
Title: Managing Director
-----------------
PACIFICA PARTNERS I, L.P.,
as a Lender
By: IMPERIAL CREDIT ASSET MANAGEMENT,
as Investment Manager
By: /s/ Xxxx X. Xxxxx
-----------------
Name: Xxxx X. Xxxxx
-------------
Title: Vice President
--------------
S-8
ARCHIMEDES FUNDING III, LTD.
By: ING CAPITAL ADVISORS LLC, as Collateral
Manager
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
-------------
Title: Vice President & Portfolio
--------------------------
Manager
-------
SEQUILS - ING I (HBDGM) LTD.
By: ING CAPITAL ADVISORS, INC., as
Collateral Manager
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
-------------
Title: Vice President & Portfolio
--------------------------
Manager
-------
SWISS LIFE US RAINBOW LTD.
By: ING CAPITAL ADVISORS, INC. ., as
Investment Manager
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
-------------
Title: Vice President & Portfolio
--------------------------
Manager
-------
LASALLE BANK NATIONAL ASSOCATION,
as a Lender
By: Not Legible
-----------
Name: Not Legible
-----------
Title: Officer
-------
S-9
MASSACHUSETTS MUTUAL-
MAPLEWOOD (CAYMAN)LIMITED,
as a Lender
By: MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as Investment Manager
By: /s/ Xxxxxx X. Xxxx
------------------
Name: Xxxxxx X. Xxxx
--------------
Title: Second Vice President and
-------------------------
Associate General Counsel
-------------------------
MASSACHUSETTS MUTUAL - SIMSBURY CLO,
LIMITED, as a Lender
By: MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as Collateral Manager
By: /s/ Xxxxxx X. Xxxx
------------------
Name: Xxxxxx X. Xxxx
--------------
Title: Second Vice President and
-------------------------
Associate General Counsel
-------------------------
NATIONAL BANK OF CANADA,
as a Lender
By: /s/ Xxxxxxx X. Xxxx
-------------------
Name: Xxxxxxx X. Xxxx
---------------
Title: Vice President
--------------
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
-------------
Title: Vice President
--------------
NATIONAL CITY BANK,
as a Lender
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
----------------
Title: Assistant Vice President
------------------------
S-10
XXXXXXXXXXX HARBOURVIEW CDO II LTD., as a
Lender
By: Not Legible
-----------
Name: Not Legible
-----------
Title: A.V.P.
------
PPM SPYGLASS FUNDING TRUST,
as a Lender
By: /s/ Xxx X. Xxxxxx
-----------------
Name: Xxx X. Xxxxxx
-------------
Title: Authorized Agent
----------------
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH,
as a Lender
By: Not Legible
-----------
Name: Not Legible
-----------
Title: Executive Director
------------------
By: Not Legible
-----------
Name: Not Legible
-----------
Title:
-----------
XXXXX XXX & XXXXXXX CLO I LTD.,
as a Lender
By: XXXXX XXX & FARNHAM INCORPORATED, as
Portfolio Manager
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
----------------
Title: Senior Vice President &
-----------------------
Portfolio Manager
-----------------
S-11
XXXXX XXX FLOATING RATE LIMITED LIABILITY
COMPANY, as a Lender
By: XXXXX XXX & FARNHAM INCORPORATED, as
Advisor
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
----------------
Title: Senior Vice President
---------------------
Xxxxx Xxx & Xxxxxxx
-------------------
Incorporated, as Advisor to
---------------------------
the Xxxxx Xxx Floating Rate
---------------------------
Limited Liability Company
-------------------------
COLUMBUS LOAN FUNDING LTD.,
as a Lender
By: TRAVELERS ASSET MANAGEMENT
INTERNATIONAL COMPANY LLC
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
----------------
Title: Second Vice President
---------------------
TRAVELERS CORPORATE LOAN FUND, INC., as a
Lender
By: TRAVELERS ASSET MANAGEMENT
INTERNATIONAL COMPANY LLC
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
----------------
Title: Second Vice President
---------------------
THE TRAVELERS INSURANCE COMPANY, as a Lender
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
----------------
Title: Second Vice President
---------------------
X-00
XXXXX XXXX XX XXXXXXXXXX
as a Lender
By: Not Legible
-----------
Name: Not Legible
-----------
Title: Vice President
--------------
XXXXX FARGO BANK, NA,
as a Lender
By: /s/ Xxxx X. Xxxxx
-----------------
Name: Xxxx X. Xxxxx
-------------
Title: Senior Vice President
---------------------
S-13
ANNEX A
-------
EXHIBIT I
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Amended and Restated Credit Agreement dated
as of June 26, 1998, as amended, supplemented or otherwise modified to the date
hereof (said Amended and Restated Credit Agreement, as so amended, supplemented
or otherwise modified, being the "CREDIT AGREEMENT", the terms defined therein
and not otherwise defined herein being used herein as therein defined), by and
among Xxxxx Nurseries, Inc., a California corporation ("COMPANY"), and Sun Gro
Horticulture Canada Ltd., a Canadian corporation ("SUN GRO CANADA" and together
with Company the "BORROWERS"), the financial institutions listed therein as
Lenders ("LENDERS"), Deutsche Bank Canada as Canadian agent ("CANADIAN AGENT"),
Bank of America, N.A. (formerly Bank of America National Trust and Savings
Association) as syndication agent ("SYNDICATION AGENT"), Xxxxxx Trust and
Savings Bank as documentation agent ("DOCUMENTATION AGENT") and Bankers Trust
Company as administrative agent ("AGENT"), this represents [Company's] [Sun Gro
Canada's] request to borrow from Lenders, in accordance with their applicable
Pro Rata Shares, as follows:
1. Date of borrowing: ___________________, _________
------------------
2. Amount of borrowing: $ ___________________
--------------------
3. Type of Loans: a. Working Capital Revolving Loan
-------------- b. Acquisition Loan
c. Swing Line Loan
d. Sun Gro Canada Term Loan
e. Domestic Term Loan
f. Tranche B Term Loan
g. Revolving B Loan
4. Interest rate option: a. Base Rate Loan(s)
--------------------- b. Eurodollar Rate Loans with an initial
Interest Period of ____________ month(s)
c. Canadian Base Rate Loans
d. Canadian Eurodollar Rate Loans with an
initial Interest Period of ________
month(s)
The proceeds of such Loans are to be credited to the account of the applicable
Borrower at the Domestic Funding and Payment Office or at the Canadian Funding
and Payment Office, as applicable.
ANNEX A-1
The undersigned officer, to the best of his or her knowledge, and
[Company][Sun Gro Canada] certify that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete in
all material respects on and as of the date hereof to the same extent as
though made on and as of the date hereof, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case such representations and warranties were true, correct and
complete in all material respects on and as of such earlier date;
(ii) No event has occurred and is continuing or would result from the
consummation of the borrowing contemplated hereby that would constitute an
Event of Default or a Potential Event of Default;
(iii) Each Borrower has performed in all material respects all
agreements and satisfied all conditions which the Credit Agreement provides
shall be performed or satisfied by it on or before the date hereof; and
(iv) After giving effect to the requested Loans, the Total Utilization
of Working Capital Revolving Loan Commitments will not exceed the Working
Capital Revolving Loan Commitments.
DATED: ____________________
[XXXXX NURSERIES, INC.]
[SUN GRO HORTICULTURE CANADA LTD.]
By: __________________________
Title: __________________________
ANNEX A-2
ANNEX B
-------
EXHIBIT IX
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "AGREEMENT") is dated as of _________,
____ and is entered into by and between the parties designated as Assignor
("ASSIGNOR") and Assignee ("ASSIGNEE") above the signatures of such parties on
the Schedule of Terms attached hereto and hereby made an integral part hereof
(the "SCHEDULE OF TERMS") and relates to that certain Amended and Restated
Credit Agreement described in the Schedule of Terms (said Amended and Restated
Credit Agreement, as amended, supplemented or otherwise modified to the date
hereof and as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "CREDIT AGREEMENT", the terms defined therein and
not otherwise defined herein being used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. ASSIGNMENT AND ASSUMPTION.
-------------------------
(a) Effective upon the Assignment Settlement Date specified in Item 4
of the Schedule of Terms (the "ASSIGNMENT SETTLEMENT DATE"), Assignor hereby
sells and assigns to Assignee, without recourse, representation or warranty
(except as expressly set forth herein), and Assignee hereby purchases and
assumes from Assignor, that percentage interest in all of Assignor's rights and
obligations as a Lender arising under the Credit Agreement and the other Loan
Documents with respect to Assignor's Commitments and outstanding Loans, if any,
which represents, as of the Assignment Settlement Date, the percentage interest
specified in Item 3 of the Schedule of Terms of all rights and obligations of
Lenders arising under the Credit Agreement and the other Loan Documents with
respect to the Commitments and any outstanding Loans (the "ASSIGNED SHARE").
Without limiting the generality of the foregoing, the parties hereto hereby
expressly acknowledge and agree that any assignment of all or any portion of
Assignor's rights and obligations relating to Assignor's Working Capital
Revolving Loan Commitment shall include (i) in the event Assignor is an Issuing
Lender with respect to any outstanding Letters of Credit (any such Letters of
Credit being "ASSIGNOR LETTERS OF CREDIT"), the sale to Assignee of a
participation in the Assignor Letters of Credit and any drawings thereunder as
contemplated by subsection 3.1C of the Credit Agreement and (ii) the sale to
Assignee of a ratable portion of any participations previously purchased by
Assignor pursuant to said subsection 3.1C with respect to any Letters of Credit
other than the Assignor Letters of Credit.
(b) In consideration of the assignment described above, Assignee
hereby agrees to pay to Assignor, on the Assignment Settlement Date, the
principal amount of any outstanding Loans included within the Assigned Share,
such payment to be made by wire transfer of immediately available funds in
accordance with the applicable payment instructions set forth in Item 5 of the
Schedule of Terms.
ANNEX B-1
(c) Assignor hereby represents and warrants that Item 3 of the
Schedule of Terms correctly sets forth the amount of the Working Capital
Revolving Loan Commitment, Acquisition Loan Commitment, the Canadian Term Loan,
the Domestic Term Loan, the Tranche B Term Loan Commitment and the Revolving B
Loan Commitment, as the case may be, and the Pro Rata Share of Assignee after
giving effect to the assignment and assumption described above.
(d) Assignor and Assignee hereby agree that, upon giving effect to the
assignment and assumption described above, (i) Assignee shall be a party to the
Credit Agreement and shall have all of the rights and obligations under the Loan
Documents, and shall be deemed to have made all of the covenants and agreements
contained in the Loan Documents, arising out of or otherwise related to the
Assigned Share, and (ii) Assignor shall be absolutely released from any of such
obligations, covenants and agreements assumed or made by Assignee in respect of
the Assigned Share. Assignee hereby acknowledges and agrees that the agreement
set forth in this Section 1(d) is expressly made for the benefit of Borrowers,
Agent, Assignor and the other Lenders and their respective successors and
permitted assigns.
(e) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect the assignment by
Assignor and the assumption by Assignee of Assignor's rights and obligations
with respect to the Assigned Share, (ii) any other assignments by Assignor of a
portion of its rights and obligations with respect to the Working Capital
Revolving Loan Commitment, Acquisition Loan Commitment, Canadian Term Loan,
Domestic Term Loan, the Tranche B Term Loan Commitment, the Revolving B Loan
Commitment and any outstanding Loans shall have no effect on the Working Capital
Revolving Loan Commitment, the Acquisition Loan Commitment, the Canadian Term
Loan, the Domestic Term Loan, the Tranche B Term Loan Commitment, the Revolving
B Loan Commitment, the outstanding Loans and the Pro Rata Share of Assignee set
forth in Item 3 of the Schedule of Terms or on the interest of Assignee in any
outstanding Loans corresponding thereto, and (iii) from and after the Assignment
Settlement Date, Agent shall make all payments under the Credit Agreement in
respect of the Assigned Share (including without limitation all payments of
principal and accrued but unpaid interest, commitment fees and letter of credit
fees with respect thereto) (A) in the case of any such interest and fees that
shall have accrued prior to the Assignment Settlement Date, to Assignor, and (B)
in all other cases, to Assignee; provided that Assignor and Assignee shall make
payments directly to each other to the extent necessary to effect any
appropriate adjustments in any amounts distributed to Assignor and/or Assignee
by Agent under the Loan Documents in respect of the Assigned Share in the event
that, for any reason whatsoever, the payment of consideration contemplated by
Section 1(b) occurs on a date other than the Assignment Settlement Date.
SECTION 2. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
--------------------------------------------------
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the Assigned Share, free and clear of any adverse claim.
(b) Assignor shall not be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of any of the Loan Documents or for any representations, warranties,
recitals or statements made therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or
ANNEX B-2
certificates or any other documents furnished or made by Assignor to Assignee or
by or on behalf of any Borrower or any of its Subsidiaries to Assignor or
Assignee in connection with the Loan Documents and the transactions contemplated
thereby or for the financial condition or business affairs of any Borrower or
any other Person liable for the payment of any Obligations, nor shall Assignor
be required to ascertain or inquire as to the performance or observance of any
of the terms, conditions, provisions, covenants or agreements contained in any
of the Loan Documents or as to the use of the proceeds of the Loans or the use
of the Letters of Credit or as to the existence or possible existence of any
Event of Default or Potential Event of Default.
(c) Assignee represents and warrants that it is an Eligible Assignee;
that it has experience and expertise in the making of loans such as the Loans;
that it has acquired the Assigned Share for its own account and not with any
present intention of selling all or any portion of such interest; and that it
has received, reviewed and approved a copy of the Credit Agreement (including
all Exhibits and Schedules thereto).
(d) Assignee represents and warrants that it has received from
Assignor such financial information regarding Borrowers and their Subsidiaries
as is available to Assignor and as Assignee has requested, that it has made its
own independent investigation of the financial condition and affairs of
Borrowers and their Subsidiaries in connection with the assignment evidenced by
this Agreement, and that it has made and shall continue to make its own
appraisal of the creditworthiness of Borrowers and their Subsidiaries. Assignor
shall have no duty or responsibility, either initially or on a continuing basis,
to make any such investigation or any such appraisal on behalf of Assignee or to
provide Assignee with any other credit or other information with respect
thereto, whether coming into its possession before the making of the initial
Loans or at any time or times thereafter, and Assignor shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Assignee.
(e) Each party to this Agreement represents and warrants to the other
party hereto that it has full power and authority to enter into this Agreement
and to perform its obligations hereunder in accordance with the provisions
hereof, that this Agreement has been duly authorized, executed and delivered by
such party and that this Agreement constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity.
SECTION 3. MISCELLANEOUS.
-------------
(a) Each of Assignor and Assignee hereby agrees from time to time,
upon request of the other such party hereto, to take such additional actions and
to execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except by an instrument in writing signed by the party
(including, if applicable, any party required to evidence its consent to or
acceptance of this Agreement) against whom enforcement of such change, waiver,
discharge or termination is sought.
ANNEX B-3
(c) Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States or Canadian mail with
postage prepaid and properly addressed. For the purposes hereof, the notice
address of each of Assignor and Assignee shall be as set forth on the Schedule
of Terms or, as to either such party, such other address as shall be designated
by such party in a written notice delivered to the other such party. In
addition, the notice address of Assignee set forth on the Schedule of Terms
shall serve as the initial notice address of Assignee for purposes of subsection
10.8 of the Credit Agreement.
(d) In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
(e) THIS AGREEMENT 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.
(f) This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
(g) This Agreement may be executed in one or more 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.
(h) This Agreement shall become effective upon the date (the
"EFFECTIVE DATE") upon which all of the following conditions are satisfied: (i)
the execution of a counterpart hereof by each of Assignor and Assignee, (ii) the
execution of a counterpart hereof by Company as evidence of its consent hereto
to the extent required under subsection 10.1B(i) of the Credit Agreement, (iii)
the receipt by Agent of the processing and recordation fee referred to in
subsection 10.1B(i) of the Credit Agreement, (iv) in the event Assignee is a
Non-US Lender (as defined in subsection 2.7B(iii)(a) of the Credit Agreement),
the delivery by Assignee to Agent of such forms, certificates or other evidence
with respect to United States federal income tax withholding matters as Assignee
may be required to deliver to Agent pursuant to said subsection 2.7B(iii)(a),
(v) in the event Assignee is a Canadian Lender, the delivery by Assignee to
Agent of such forms, certificates or other evidence as Assignee may be required
to deliver to Agent pursuant to subsection 2.7B(iii)(a)(2), (vi) the execution
of a counterpart hereof by Agent as evidence of its acceptance hereof in
accordance with subsection 10.1B(ii) of the Credit
ANNEX B-4
Agreement, (vii) the receipt by Agent of originals or telefacsimiles of the
counterparts described above and authorization of delivery thereof, and (viii)
the recordation by Agent in the Register of the pertinent information regarding
the assignment effected hereby in accordance with subsection 10.1B(ii) of the
Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized, such execution being made as of the Effective Date in the applicable
spaces provided on the Schedule of Terms.
[Remainder of page intentionally left blank]
ANNEX B-5
SCHEDULE OF TERMS
1. Borrower(s): _________________________
2. Name and Date of Credit Agreement: Amended and Restated Credit Agreement
dated as of June 26, 1998 by and among Xxxxx Nurseries, Inc., a California
corporation, Sun Gro Horticulture Canada Ltd., a Canadian corporation, the
financial institutions listed therein as Lenders, Deutsche Bank Canada as
Canadian agent ("CANADIAN AGENT"), Bank of America, N.A. (formerly Bank of
America National Trust and Savings Association) as syndication agent
("SYNDICATION AGENT"), Xxxxxx Trust and Savings Bank as documentation agent
("DOCUMENTATION AGENT") and Bankers Trust Company as administrative agent
for Lenders.
3. Amounts:
Re: Re:
Re: Working Re: Canadian Domestic Re: Re:
Capital Revolving Acquisition Term Term Tranche B Term Revolving B
Loans Loans Loans Loans Loans Loans
------------------ ------------ ---------- ---------- --------------- ------------
(a) Aggregate Commitments $________ $________ $________ $________ $________ $________
of all Lenders:
(b) Assigned Share/Pro Rata ______% ______% ______% ______% ______% ______%
Share:
(c) Amount of Assigned $________ $________ $________ $________ $________ $________
Share of Commitments:
(d) Amount of Assigned $________ $________ $________ $________ $________ $________
Share of Loans:
4. Assignment Settlement Date: ____________, _____
5. Payment Instructions:
ASSIGNOR: ASSIGNEE:
_____________________________ ______________________
_____________________________ ______________________
_____________________________ ______________________
Attention: __________________ Attention: __________________
Reference: _________________ Reference: _________________
6. Notice Addresses:
ASSIGNOR: ASSIGNEE:
___________________________ ______________________
___________________________ ______________________
___________________________ ______________________
___________________________ ______________________
ANNEX B-6
7. Signatures:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: By:
---------------------- ----------------------
Title: Title:
------------------- -------------------
Consented to in accordance with Accepted in accordance with
subsection 10.1B(i) of the Credit subsection 10.1B(ii) of the Credit
Agreement Agreement
XXXXX NURSERIES, INC. BANKERS TRUST COMPANY,
as Agent
By: By:
---------------------- ----------------------
Title: Title:
------------------- -------------------
ANNEX X-0
XXXXX X
XXXXXXX XX-X
[XXXX XX XXXXXXXXX X NOTE]
XXXXX NURSERIES, INC.
PROMISSORY NOTE DUE JUNE 15, 2002
_________ , ____
$ November __, 2000
FOR VALUE RECEIVED, Xxxxx Nurseries, Inc., a California corporation
("COMPANY"), promises to pay to the order of [$____________] ("PAYEE") or its
registered assigns, on or before June 15, 2002, the lesser of (x)
[$____________] ($[1]) and (y) the unpaid principal amount of all advances made
by Payee to Company as Revolving B Loans under the Credit Agreement referred to
below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Amended and Restated Credit Agreement dated as of June 26, 1998 by and among
Xxxxx Nurseries, Inc., a California corporation, Sun Gro Horticulture Canada
Ltd., a Canadian corporation, the financial institutions listed therein as
Lenders, Deutsche Bank Canada as Canadian agent, Bank of America, N.A. (formerly
Bank of America National Trust and Savings Association) as syndication agent,
Xxxxxx Trust and Savings Bank as documentation agent, and Bankers Trust Company
as administrative agent (said Amended and Restated Credit Agreement, as amended
to the date hereof and as it may be further amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
This Note is one of Company's "Revolving B Notes" in an aggregate
original principal amount of $30,000,000. This Note is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Revolving B Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds at the
Domestic Funding and Payment Office or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement. Unless and until an Assignment Agreement effecting the
assignment or transfer of this Note shall have been accepted by Agent and
recorded in the Register as provided in subsection 10.1B(ii) of the Credit
Agreement, Company and Agent shall be entitled to deem and treat Payee as the
owner and holder of this Note and the Loan evidenced hereby. Payee hereby
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the
ANNEX C-1
obligations of Company hereunder with respect to payments of principal of or
interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE
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.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
ANNEX C-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
XXXXX NURSERIES, INC.,
a California corporation
By: __________________________
Title: ________________________
ANNEX C-3
ANNEX D
-------
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Amended and Restated Credit Agreement dated
as of June 26, 1998, as amended, supplemented or otherwise modified to the date
hereof (said Amended and Restated Credit Agreement, as so amended, supplemented
or otherwise modified, being the "CREDIT AGREEMENT", the terms defined therein
and not otherwise defined herein being used herein as therein defined), by and
among Xxxxx Nurseries, Inc., a California corporation ("COMPANY"), Sun Gro
Horticulture Canada Ltd., a Canadian corporation ("SUN GRO CANADA" and together
with Company the "BORROWERS"), the financial institutions listed therein as
Lenders ("LENDERS"), Deutsche Bank Canada as Canadian agent ("CANADIAN AGENT"),
Bank of America, N.A. (formerly Bank of America National Trust and Savings
Association) as syndication agent ("SYNDICATION AGENT"), Xxxxxx Trust and
Savings Bank as documentation agent ("DOCUMENTATION AGENT") and Bankers Trust
Company as administrative agent ("AGENT"), this represents [Company's] [Sun Gro
Canada's] request to convert or continue Loans as follows:
1. Date of conversion/continuation: __________________, _______
------------------------------------------
2. Amount of Loans being converted/continued: $___________________
------------------------------------------
3. Type of Loans being a. Working Capital Revolving Loans
converted/continued: b. Acquisition Loan
----------------------
c. Swing Line Loan
d. Canadian Term Loan
e. Domestic Term Loan
f. Tranche B Term Loan
g. Revolving B Loan
4. Nature of conversion/continuation:
---------------------------------
a. Conversion of Base Rate Loans to Eurodollar Rate Loans
b. Conversion of Canadian Base Rate Loans to Canadian Eurodollar Rate
Loans
c. Conversion of Eurodollar Rate Loans to Base Rate Loans
d. Conversion of Canadian Eurodollar Rate Loans to Canadian Base Rate
Loans
e. Continuation of Eurodollar Rate Loans as such
f. Continuation of Canadian Eurodollar Rate Loans as such
5. If Loans are being continued as or converted to Eurodollar Rate Loans
or Canadian Eurodollar Rate Loans, as applicable, the duration of the new
Interest Period that commences on the conversion/continuation date:
______________ month(s)
ANNEX D-1
In the case of a conversion to, or continuation of, Eurodollar Rate
Loans or Canadian Eurodollar Rate Loans, the undersigned officer, to the best of
his or her knowledge, and [Company] [Sun Gro Canada] certify that no Event of
Default or Potential Event of Default has occurred and is continuing under the
Credit Agreement.
DATED: _____________________ [XXXXX NURSERIES, INC.]
[SUN GRO HORTICULTURE CANADA LTD.]
By: __________________________
Title: __________________________
ANNEX D-2
ANNEX E
-------
[FORM OF MDCP GUARANTY]
SEE ATTACHMENT
ANNEX E-1
ANNEX F
-------
[FORM OF OPINION OF XXXXXXXX & XXXXX OPINION]
----------------------------------------------
November __, 2000
Bankers Trust Company,
as Administrative Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
The Lenders Listed on
Schedule A hereto
Re: Second Amendment to Credit Agreement and Limited Waiver dated as of
November __, 2000 to Amended and Restated Credit Agreement dated as
of June 26, 1998, among Xxxxx Nurseries, Inc., Sun Gro Horticulture
Canada Ltd., the Lenders listed therein, Bank of America National
Trust and Savings Association, as Syndication Agent, Xxxxxx Trust
and Savings Bank, as Documentation Agent, Deutsche Bank Canada, as
Canadian Agent, and Bankers Trust Company, as Administrative Agent
Ladies and Gentlemen:
We have acted as special counsel to Xxxxx Nurseries Inc., a California
corporation ("COMPANY") and to Madison Dearborn Capital Partners, L.P., a
Delaware limited partnership ("MDCP") and to Madison Dearborn Partners, L.P., a
Delaware limited partnership, as the general partner of MDCP (the "GENERAL
PARTNER"), in connection with the Second Amendment to Credit Agreement and
Limited Waiver (the "AMENDMENT") dated as of November __, 2000 among the
Company, Sun Gro Horticulture Canada Ltd., a Canadian corporation ("SUN GRO
CANADA" and together with Company, the "BORROWERS"), the Lenders listed on
Schedule A hereto (the "LENDERS"), Bank of America National Trust and Savings
Association as syndication agent (in such capacity, "SYNDICATION AGENT"), Xxxxxx
Trust and Savings Bank as documentation agent (in such capacity, "DOCUMENTATION
AGENT"), Deutsche Bank Canada as Canadian agent (in such capacity, "CANADIAN
AGENT") and Bankers Trust Company ("BTCO"), as administrative agent for Lenders
(in such capacity, "ADMINISTRATIVE AGENT"), to that certain Amended and Restated
Credit Agreement dated as of June 26, 1998, as amended by a First Amendment to
Credit Agreement dated as of March 3, 2000, in each case by and among Company,
Lenders, Canadian Agent, Syndication Agent, Documentation Agent and
Administrative Agent (the "CREDIT AGREEMENT"). This opinion is rendered to you
in compliance with Section 3D of the Amendment. The Credit
ANNEX F-1
Agreement, as amended by the Amendment, is hereinafter referred to as the
"AMENDED CREDIT AGREEMENT." Capitalized terms used herein without definition
have the same meanings as in the Amended Credit Agreement. The Company, MDCP and
the General Partner are sometimes hereinafter collectively referred to as the
"TRANSACTION PARTIES."
In our capacity as such counsel, we have examined originals, or copies
identified to our satisfaction as being true copies, of such records, documents
or other instruments as in our judgment are necessary or appropriate to enable
us to render the opinions expressed below. These records, documents and
instruments included the following:
(a) The Articles of Incorporation of Company, as amended to date;
(b) The Bylaws of Company, as amended to date;
(c) All records of proceedings and actions of the Board of Directors
of Company relating to the Amendment, the Credit Agreement, the Revolving B
Notes and the other documents executed and delivered on the date hereof and
the transactions contemplated thereby;
(d) The Amended Credit Agreement;
(e) The Amendment;
(f) The Revolving B Notes executed and delivered by Company in
connection with the Amendment;
(g) the [First Amendment] to the Indenture dated as of October 19,
1995, governing the 11 3/4% Senior Subordinated Notes due 2005 (the "SUB
DEBT AMENDMENT");
(h) the Agreement of Limited Partnership of MDCP (the "MDCP
PARTNERSHIP AGREEMENT") and the Agreement of Limited Partnership of the
General Partner, in each case as amended to the date hereof (collectively,
the "GOVERNING DOCUMENTS");
(i) the MDCP Guaranty; and
(j) the [Certificate of General Partner].
The documents referred to in clauses (d), (e), (f), (g), (i) and (j) above are
sometimes hereinafter collectively referred to as the "TRANSACTION DOCUMENTS."
We have been furnished with, and with your consent have relied
exclusively upon, certificates of officers of Transaction Parties with respect
to certain factual matters, including the identification of certain instruments
and other agreements that are material to Transaction Parties and their
respective Subsidiaries (the "MATERIAL AGREEMENTS"), and the material orders,
writs, judgments, injunctions and decrees of any court or governmental authority
which are binding on Transaction Parties and their respective Subsidiaries or
their respective properties (the "JUDICIAL ORDERS"). We have also obtained and
relied upon such certificates and assurances from public officials as we have
deemed necessary or appropriate for the purpose of rendering this opinion.
ANNEX F-2
We have assumed the genuineness of all signatures other than those of officers
of Transaction Parties, the legal capacity of all natural persons executing
documents, the authenticity of all documents submitted to us as original
documents, and the conformity to original documents of all documents submitted
to us as copies.
We have made such factual and legal examinations and inquiries as we
have deemed advisable for the purpose of rendering the opinions expressed below,
except where a statement is qualified as to knowledge, in which case we have
made no or limited inquiry as specified below. We are opining herein as to the
effect on the subject transactions of only United States federal law, the laws
of the State of New York, the General Corporation Law of the State of California
and the Delaware Revised Uniform Limited Partnership Act (the "PARTNERSHIP
ACT"). In addition, except as expressly covered in this opinion, we are not
expressing any opinion as to the effect of compliance by Lenders with any state
or federal laws or regulations applicable to the transactions because of the
nature of their businesses. We express no opinion with respect to state
securities or "blue sky" laws or state or federal antifraud, antitrust or
environmental laws.
On the basis of the foregoing, and in reliance thereon, and subject to
the limitations, qualifications and exceptions set forth below, we are of the
opinion that:
1. Company is a corporation validly existing and in good standing
under the laws of its jurisdiction of incorporation. Each of MDCP and the
General Partner is validly existing and in good standing as a limited
partnership under the Partnership Act.
2. Each Transaction Party has all requisite corporate or partnership
power and authority, as the case may be, to execute and deliver the Transaction
Documents to which it is a party and to carry out the transactions contemplated
by, and perform its obligations under, the Transaction Documents to which it is
a party.
3. The execution, delivery and performance of the Transaction
Documents to which it is a party have been duly authorized by all necessary
corporate action on the part of each Transaction Party. The Transaction
Documents to which it is a party have been duly executed and delivered by each
Transaction Party and the Transaction Documents constitute the legally valid and
binding obligations of each Transaction Party thereto, enforceable against such
Transaction Party in accordance with their respective terms.
4. Neither the execution and delivery of the Transaction Documents to
which it is a party by each Transaction Party nor the consummation of the
transactions contemplated by the Transaction Documents nor compliance with the
terms and conditions of the Transaction Documents on or prior to the date hereof
(A) conflicts with, results in a breach or violation of, or constitutes a
default under, any of the terms, conditions or provisions of (x) the Articles of
Incorporation or Bylaws of Company or any of its Subsidiaries or of the
Governing Documents of MDCP or the General Partner or (y) any term of any
Material Agreement or Judicial Order, or (z) any present Federal, New York or
California statute, rule or regulation or the Partnership Act binding on any
Transaction Party or any of their respective Subsidiaries, or (B) results in the
creation of any Lien upon any of the properties or assets of any Transaction
Party or any of their respective Subsidiaries under any agreement or order
referred to in clause (y) above (other than Liens created pursuant to the
Collateral Documents).
ANNEX F-3
5. No governmental consents, approvals, authorizations,
registrations, declarations or filings are required by any Transaction Party in
connection with the execution and delivery by any Transaction Party of the
Transaction Documents to which it is a party and the performance by any
Transaction Party of the Transaction Documents to which it is a party.
6. The making of the Loans and the application of the proceeds
thereof as provided in the Amended Credit Agreement do not violate Regulation T,
U or X of the Board of Governors of the Federal Reserve System.
7. It is not necessary in connection with the execution and delivery
of the Revolving B Notes to Lenders to register the Revolving B Notes under the
Securities Act of 1933, as amended, or to qualify any indenture in respect
thereof under the Trust Indenture Act of 1939, as amended.
8. The Loans and all other monetary obligations of Company under the
Amended Credit Agreement, including, without limitation, under the Revolving B
Notes and the other Loan Documents, constitute "Senior Debt" and "Designated
Senior Debt" as defined in the Subordinated Note Indenture and are senior to the
Company's obligations under the Subordinated Note Indenture to the extent set
forth therein. The Loans and all other monetary obligations of Holdings and the
Domestic Subsidiaries of the Company under such Amended Credit Agreement and the
other Loan Documents constitute "Guarantor Senior Debt" and "Designated Senior
Debt" as defined in the Subordinated Note Indenture and are senior to Holdings'
and such other Domestic Subsidiary's obligations under the Subordinated Note
Indenture to the extent set forth therein.
9. To our knowledge, there is no action, suit, investigation,
litigation or proceeding to which any Transaction Party is a party pending or
threatened before any court, governmental agency or arbitrator that purports to
affect the legality, validity or enforceability of the Transaction Documents or
the consummation today of the transactions contemplated thereby.
10. The Company is not an "investment company" or a company
"controlled by" an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
11. The provisions of the Amended Credit Agreement do not violate any
law, statute or regulation of the State of New York relating to usury.
12. The provisions in the Amendment, the Amended Credit Agreement, the
MDCP Guaranty and the Revolving B Notes relating to New York choice of law and
selection of courts sitting in the State of New York for the non-exclusive venue
for claims and actions relating to the Amendment, the Amended Credit Agreement,
the MDCP Guaranty and the Revolving B Notes are enforceable under New York law.
The opinions set forth in paragraph 3 above are subject, with respect
to the enforceability of any document referred to therein, to (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or limiting creditors' rights generally, and the
discretion of the court before which any proceeding therefor may be brought; (b)
limitations and exceptions which may arise under general principles of equity
ANNEX F-4
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), including limitations as to the availability of specific
equitable remedies (such as the remedy of specific performance); and (c) public
policy considerations which may limit the rights of Agent or Lenders to obtain
indemnification.
Our opinions in paragraphs 4 and 5 above as to the compliance with
certain statutes, rules and regulations, and as to the lack of any required
consents or approvals of, authorizations by, or registrations, declarations or
filings with, certain governmental authorities, are based upon a review of those
statutes, rules and regulations which, in our experience, are normally
applicable to transactions of the type contemplated by the Transaction
Documents.
For purposes of our opinion expressed in paragraph 7, we have assumed,
with your consent, that each Lender is taking the Revolving B Notes payable to
it for its own account in the ordinary course of its commercial banking business
and not with a view to or for sale in connection with any distribution of the
Revolving B Notes.
To the extent that the obligations of the Transaction Parties may be
dependent upon such matters, we have assumed for purposes of this opinion, other
than with respect to the Transaction Parties, that each additional party to the
agreements and contracts referred to herein is duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation; that each such other party has the requisite corporate or other
organizational power and authority to perform its obligations under such
agreements and contracts, as applicable; and that such agreements and contracts
have been duly authorized, executed and delivered by, and each of them
constitutes the legal, valid and binding obligation of, such other parties, as
applicable, enforceable against such other parties in accordance with their
respective terms.
This opinion is rendered only to Agent and Lenders and is solely for
their benefit in connection with the above transactions. This opinion may not be
relied upon by Agent or Lenders for any other purpose, or quoted to or relied
upon by any other person, firm or corporation for any purpose without our prior
written consent.
Very truly yours,
ANNEX F-5
SCHEDULE A
[list Lenders]
ANNEX F-6
ANNEX G
-------
Schedule 2.1
------------
See Attachment
ANNEX G-1
ANNEX H
-------
EXHIBIT V
[FORM OF NOTICE OF COMMENCEMENT OF CLEAN DOWN PERIOD]
NOTICE OF COMMENCEMENT OF CLEAN DOWN PERIOD
Pursuant to that certain Amended and Restated Credit Agreement dated
as of June 26, 1998, as amended, supplemented or otherwise modified to the date
hereof (said Amended and Restated Credit Agreement, as so amended, supplemented
or otherwise modified, being the "CREDIT AGREEMENT", the terms defined therein
and not otherwise defined herein being used herein as therein defined), by and
among Xxxxx Nurseries, Inc., a California corporation ("COMPANY") and Sun Gro
Horticulture Canada Ltd., a Canadian corporation ("SUN GRO CANADA" and together
with Company the "BORROWERS"), the financial institutions listed therein as
Lenders ("LENDERS"), Deutsche Bank Canada as Canadian agent ("CANADIAN AGENT"),
Bank of America, N.A. (formerly Bank of America National Trust and Savings
Association) as syndication agent ("SYNDICATION AGENT"), Xxxxxx Trust and
Savings Bank as documentation agent ("DOCUMENTATION AGENT") and Bankers Trust
Company as administrative agent ("AGENT"), this represents Company's notice to
Lenders that, as of the date of this notice, Company plans to commence a thirty
(30) day clean down period in accordance with sections 2.1A(iv)(b) and
2.1A(v)(c) of the Credit Agreement.
The undersigned officer, to the best of his or her knowledge, and
Company certify that:
(i) The date of the signing of this notice is ______________, ____
(the "SIGNING DATE"); and
(ii) As of the Signing Date, the aggregate outstanding Working Capital
Revolving Loans and Swing Line Loans do not exceed $__________, and Company
intends that this condition shall continue to exist for a period of thirty
(30) days following the Signing Date.
DATED:_________________________ XXXXX NURSERIES, INC.
By:________________________________
Title:_______________________________
ANNEX H-1
