EXHIBIT 10.2
WAIVER REGARDING
FINANCIAL COVENANTS
This WAIVER (this "WAIVER") is dated as of October 13, 2005, and
entered into by and among XXXXX NURSERIES, INC., a California corporation
("COMPANY"), and XXXXX SGUS INC., a Nevada corporation ("XXXXX SGUS" and,
together with Company, individually a "BORROWER" and collectively the
"BORROWERS"), the financial institutions party hereto, and DEUTSCHE BANK TRUST
COMPANY AMERICAS, as administrative agent for Lenders (in such capacity,
"AGENT"), and, for purposes of Section 6 hereof, the Guarantors, and is made
with reference to that certain Credit Agreement dated as of September 30, 2003,
as amended by a First Amendment to Credit Agreement dated as of June 30, 2005
(as so amended, the "CREDIT AGREEMENT"), by and among Borrowers, the financial
institutions party thereto (each individually referred to herein as a "LENDER"
and collectively as "LENDERS"), and the Agent. Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the
Credit Agreement.
RECITALS
WHEREAS, Borrowers have requested Lenders to waive compliance with
Sections 8.1(a) and 8.1(b) of the Credit Agreement for the third Fiscal Quarter
in Fiscal Year 2005 and Lenders are prepared to waive such compliance subject to
Borrowers' compliance with the terms and conditions set forth in this Waiver;
WHEREAS, Borrowers have advised Lenders that they wish to reduce the
aggregate Revolving Loan Commitments from $145,000,000 to $120,000,000, such
reduction to reduce the Revolving Loan Commitment of each Lender proportionately
to its Proportionate Share;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. NOTICE OF REDUCTION OF REVOLVING LOAN COMMITMENTS AND WAIVER
A. NOTICE OF COMMITMENT REDUCTION. The Borrowers hereby
irrevocably notify Agent that, effective upon the earlier to occur of the
consummation of the Farm A Sale or the repayment in full of the Term Loan, the
Borrowers hereby reduce the aggregate Revolving Loan Commitments to
$120,000,000, such Revolving Loan Commitment reduction to reduce the Revolving
Loan Commitment of each Lender proportionately to its Proportionate Share.
B. WAIVER. Subject to the terms and conditions set forth
herein and in reliance on the representations and warranties of Borrowers herein
contained, Lenders hereby waive compliance with the provisions of Sections
8.1(a) and 8.1(b) of the Credit Agreement for the third Fiscal Quarter in Fiscal
Year 2005; PROVIDED that the Farm A Sale shall be consummated by no later than
November 30, 2005, for Net Asset Sale Proceeds of not less than $40,000,000.
SECTION 2. LIMITATION OF WAIVER
Without limiting the generality of the provisions of Section
11.10 of the Credit Agreement, the waiver set forth above shall be limited
precisely as written and relates solely to the noncompliance by Borrowers with
the provisions of Sections 8.1(a) and 8.1(b)of the Credit Agreement in the
manner and to the extent described above, and nothing in this Waiver shall be
deemed to:
(a) constitute a waiver of compliance by Borrowers
with respect to (i) Sections 8.1(a) and 8.1(b) of the Credit
Agreement in any other instance or (ii) any other term,
provision or condition of the Credit Agreement or any other
instrument or agreement referred to therein (whether in
connection with the Farm A Sale or otherwise); or
(b) prejudice any right or remedy that Agent or any
Lender may now have (except to the extent such right or remedy
was based upon existing defaults that will not exist after
giving effect to this Waiver) or may have in the future under
or in connection with the Credit Agreement or any other
instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions
and conditions of the Credit Agreement and the other Credit Documents shall
remain in full force and effect and in all other respects are hereby ratified
and confirmed.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Waiver,
Borrowers hereby represent and warrant that after giving effect to this Waiver:
(a) as of the date hereof, there exists no Default or
Event of Default under the Credit Agreement;
(b) all representations and warranties contained in
the Credit Agreement and the other Credit Documents are true,
correct and complete in all material respects on and as of the
date hereof 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; and
(c) as of the date hereof, Borrowers have performed
all agreements to be performed by Borrowers as set forth in
the Credit Agreement.
SECTION 4. COUNTERPARTS; EFFECTIVENESS
This Waiver 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
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counterpart so that all signature pages are physically attached to the same
document. This Waiver shall become effective as of the date hereof upon the
execution of counterparts hereof by Borrowers and Guarantors and by Lenders
constituting Majority Lenders and receipt by Borrowers and Agent of written or
telephonic notification of such execution and authorization of delivery thereof.
SECTION 5. GOVERNING LAW
THIS WAIVER 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.
SECTION 6. ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS
Each Guarantor hereby acknowledges that it has read this
Waiver and consents to the terms thereof and further hereby confirms and agrees
that, notwithstanding the effectiveness of this Waiver, the obligations of
Guarantor under the Holdings Guaranty and the Subsidiary Guaranty, as the case
may be, shall not be impaired or affected and the Holdings Guaranty and the
Subsidiary Guaranty, as the case may be, is, and shall continue to be, in full
force and effect and is hereby confirmed and ratified in all respects.
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWERS:
XXXXX NURSERIES, INC.,
as Borrower and Funds Administrator
By: /s/ XXXXXXX X. XXXXXXXX
Title: Chief Financial Officer
XXXXX SGUS, INC.,
as Borrower
By: /s/ XXXXXXX X. XXXXXXXX
Title: Chief Financial Officer
GUARANTORS:
XXXXX HORTICULTURE, INC.,
as Guarantor
By: /s/ XXXXXXX X. XXXXXXXX
Title: Chief Financial Officer
XXXXX FERTILIZER INC.,
as Guarantor
By: /s/ XXXXXXX X. XXXXXXXX
Title: Chief Financial Officer
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LENDERS:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Agent and Lender
By: /S/ XXXXXX XXXXXXXXX
Name: Xxxxxx Xxxxxxxxx
Title: Director
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Lender
By: /S/ XXXXX XXXXXXXX
Name: Xxxxx Xxxxxxxx
Title: Vice President
BANK OF AMERICA, N.A.,
as Lender
By: /S/ XXXXX XXXXX
Name: Xxxxx Xxxxx
Title: Vice President
GMAC COMMERCIAL FINANCE LLC,
as Lender
By: /S/ XXXXX XXXXXXXX
Name: Xxxxx Xxxxxxxx
Title: Vice President
XXXXXX, X.X.,
as Lender
By: /S/ XXXXXX XXXXXXX
Name: Xxxxxx Xxxxxxx
Title: Vice President
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LA SALLE BUSINESS CREDIT, LLC,
as Lender
By: /S/ XXXXXXXX X. XXXXXX
Name: Xxxxxxxx X. Xxxxxx
Title: First Vice President
NATIONAL CITY BANK,
as Lender
By: /S/ XXX XXXXXXX
Name: Xxx Xxxxxxx
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By: /S/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Vice President
XXXXX FARGO BANK, N.A.,
as Lender
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
XXXXXXX BUSINESS CREDIT CORPORATION,
as Lender
By: /S/ XXXXXXXXXXX XXXX
Name: Xxxxxxxxxxx Xxxx
Title: Vice President
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