EXHIBIT 10.21
XXXXX NURSERIES, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT")
is dated as of February 3, 2006 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 4 hereof, the Credit
Support Parties (as defined in Section 4 hereof), and is made with reference to
that certain Credit Agreement dated as of September 30, 2003, as amended to the
date hereof (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, the Borrowers have requested that the Credit
Agreement be amended as provided herein;
WHEREAS, the Agent and the Lenders party hereto have agreed to
amend the Credit Agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 1.1: GENERAL DEFINITIONS.
A. Subsection 1.1 of the Credit Agreement is hereby amended by
adding the following definition thereto in appropriate alphabetical order:
"`XXXXXXX SOUTH RELOCATION EXPENDITURES' means up to $10,000,000.00 in
aggregate Capital Expenditures related to the relocation of certain
operations of the Borrowers in California from Irvine to Xxxxxxx
South."
B. Subsection 1.1 of the Credit Agreement is hereby further
amended by deleting the definition of "Fixed Charge Coverage Ratio" therefrom in
its entirety and by substituting therefor the following:
"`FIXED CHARGE COVERAGE RATIO' shall mean, for any period, the ratio of
(i) EBITDA MINUS Capital Expenditures other than the Xxxxxxx South
Relocation Expenditures MINUS income and franchise taxes paid in cash
other than taxes payable as a result of the Farm A Sale and the sale of
Borrowers' Lagoon Valley Property, in each case for such period, to
(ii) Fixed Charges for such period."
1.2 AMENDMENTS TO SECTION 8: NEGATIVE COVENANTS.
A. Subsection 8.1(a) of the Credit Agreement shall be amended
by deleting all text commencing with and including the line "1st Fiscal Quarter,
Fiscal Year 2006" from the table set forth therein through to the end of such
table in its entirety and substituting therefor the following:
MINIMUM FIXED CHARGE
"FISCAL QUARTER COVERAGE RATIO
--------------- --------------
1st Fiscal Quarter, Fiscal Year 2006 0.90:1.00
2nd Fiscal Quarter, Fiscal Year 2006 0.55:1.00
3rd Fiscal Quarter, Fiscal Year 2006 0.55:1.00
4th Fiscal Quarter, Fiscal Year 2006 1.00:1.00
1st Fiscal Quarter, Fiscal Year 2007 and each
Fiscal Quarter thereafter 1.10:1.00"
B. Subsection 8.1(b) of the Credit Agreement shall be amended
by deleting it in its entirety and substituting therefor "Intentionally
Omitted."
SECTION 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective as of
February 3, 2006 (the "AMENDMENT EFFECTIVE DATE") only upon the satisfaction of
all of the following conditions precedent:
A. BORROWER DOCUMENTS. Borrowers shall deliver to Lenders on
or before the Amendment Effective Date the following, each, unless otherwise
noted, dated as of the Amendment Effective Date:
1. Signature and incumbency certificates of their officers
executing this Amendment; and
2. Copies of this Amendment executed by Borrowers and the
Credit Support Parties.
B. EXECUTION OF AMENDMENT BY LENDERS. Majority Lenders shall
have executed and delivered copies of this Amendment to Agent.
C. FEES. Borrowers shall pay to each Lender which executes and
delivers this Amendment to Agent on or before 5:00 PM New York City time on the
Amendment Effective Date an amendment fee in an amount equal to 0.125% of the
aggregate amount of such Lender's Revolving Exposure under the Credit Agreement
(as in effect immediately prior to this Amendment).
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D. OTHER PROCEEDINGS. 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 3. 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. Each Borrower has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations under,
the Credit Agreement as amended by this Amendment (the "Amended Agreement").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of each Borrower.
C. NO CONFLICT. The execution and delivery by Borrowers of
this Amendment and the performance by each Borrower of the Amended Agreement do
not and will not: (i) violate any provision of any law or any governmental rule
or regulation applicable to any Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of any Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on any Borrower 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 Material Contract of any Borrower 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 any Borrower or any of its Subsidiaries
(other than Liens created under any of the Credit 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 Material Contract of any Borrower or any of
its Subsidiaries, except for such approvals or consents which will be obtained
on or before the Amendment Effective Date and disclosed in writing to Lenders.
D. GOVERNMENTAL CONSENTS. The execution and delivery by each
Borrower of this Amendment and the performance by each Borrower of this
Amendment do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body (other than filings or recordings
required by the transactions contemplated hereunder).
E. BINDING OBLIGATION. This Amendment has been duly executed
and delivered by each Borrower and is the legally valid and binding obligations
of each Borrower, enforceable against each Borrower in accordance with its
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
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F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 6 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Amendment Effective Date and on and as of the date of
the execution of this Amendment by Borrowers 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. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
SECTION 4. ACKNOWLEDGEMENT AND CONSENT
Each of the Borrowers, Xxxxx Horticulture, Inc. and Xxxxx
Fertilizer, Inc. (collectively, the "CREDIT SUPPORT PARTIES") is a party to
certain Guaranties and Collateral Documents, in each case as amended through the
Amendment Effective Date, pursuant to which such Credit Support Party has
guarantied the Obligations and created Liens in favor of Agent on certain
Collateral to secure the obligations of such Credit Support Party under the
Credit Agreement, the Collateral Documents and the Guaranties to which such
Credit Support Party is a 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 Credit Documents
effected pursuant to this Amendment. Each Credit Support Party hereby confirms
that each Credit Support Document to which it is a party or otherwise bound and
all Collateral encumbered thereby will continue to guaranty or secure, as the
case may be, to the fullest extent possible the payment and performance of all
"Obligations," "Guarantied Obligations" and "Secured Obligations," as the case
may be (in each case as such terms are defined in the applicable Credit Support
Document), including without limitation the payment and performance of all such
"Obligations," "Guarantied Obligations" or "Secured Obligations," as the case
may be, in respect of the Obligations of Company now or hereafter existing under
or in respect of the Amended Agreement.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Amendment Effective Date to the same extent as though made on and as
of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
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Each Credit Support Party (other than Company) acknowledges
and agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by the terms of the
Credit Agreement or any other Credit 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 Credit Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
SECTION 5. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER CREDIT DOCUMENTS.
(i) On and after the 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 Credit 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 Credit 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 Credit Documents.
B. FEES AND EXPENSES. Each Borrower acknowledges that all
reasonable costs, fees and expenses incurred by Agent and its counsel with
respect to this Amendment and the documents and transactions contemplated hereby
shall be for the account of Borrowers.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
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F. FURTHER ASSURANCES. Each Borrower agrees that from time to
time, at the expense of Borrowers, each Borrower will promptly execute and
deliver any additional amendments and related documents that Agent may
reasonably request, in order to effectuate this Amendment and the transactions
contemplated hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BORROWERS:
XXXXX NURSERIES, INC.,
as Borrower, Credit Support Party and
Funds Administrator
By: /S/ XXXXXXX XXXXXXXX
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Name: Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
XXXXX SGUS INC.,
as Borrower and Credit Support Party
By: /S/ XXXXXXX XXXXXXXX
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
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ADDITIONAL CREDIT SUPPORT PARTIES:
XXXXX HORTICULTURE, INC.
By: /S/ XXXXXXX XXXXXXXX
----------------------------------------
Name Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
XXXXX FERTILIZER INC.
By: /S/ XXXXXXX XXXXXXXX
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
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LENDERS:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Agent and Lender
By: /S/ XXXXX XXXXXXX
----------------------------------------
Name: XXXXX XXXXXXX
Title: DIRECTOR
By: /S/ XXXX XXXXX
----------------------------------------
Name: XXXX XXXXX
Title: VICE PRESIDENT
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COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A. "RABOBANK INTERNATIONAL" NEW YORK BRANCH,
as Lender
By: /S/ XXXXXXX XXXXXXX
--------------------------------------
Name: XXXXXXX XXXXXXX
Title: VICE PRESIDENT
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BANK OF AMERICA, N.A., as Lender
By: /S/ XXXXX XXXXX
--------------------------------------
Name: XXXXX XXXXX
Title: VICE PRESIDENT
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XXXXXXXX XXXX XXXX, as Lender
By: /S/ XXX XXXXXXX
--------------------------------------
Name: XXX XXXXXXX
Title: VICE PRESIDENT
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THE CIT GROUP/BUSINESS CREDIT, INC., as Lender
By: /S/ XXXX X. XXXX
--------------------------------------
Name: XXXX X. XXXX
Title: VICE PRESIDENT
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XXXXXX X.X., as Lender
By: /S/ XXXXXX X. XXXXXXX
--------------------------------------
Name: XXXXXX X. XXXXXXX
Title: VICE PRESIDENT
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XXXXXXX BUSINESS CREDIT CORP, as Lender
By: /S/ XXXXXXXXXXX XXXX
--------------------------------------
Name: XXXXXXXXXXX XXXX
Title: VICE PRESIDENT
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XXXXX FARGO BANK, N.A., as Lender
By: /S/ XXXXX X. XXXXX
--------------------------------------
Name: XXXXX X. XXXXX
Title: SENIOR VICE PRESIDENT
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LASALLE BUSINESS CREDIT, LLC, as Lender
By: /S/ XXXXXXXX X. XXXXXX
--------------------------------------
Name: XXXXXXXX X. XXXXXX
Title: FIRST VICE PRESIDENT
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PNC BANK, NATIONAL ACCOCIATION, as Lender
By: /S/ XXXXXXX X. XXXX
--------------------------------------
Name: XXXXXXX X. XXXX
Title: VICE PRESIDENT
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GMAC COMMERCIAL FINANCE LLC, as Lender
By: /S/ XXXXX XXXXXXXX
--------------------------------------
Name: XXXXX XXXXXXXX
Title: VICE PRESIDENT
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