EXHIBIT 4.23
XXXXX II, INC.
SECOND AMENDMENT AND CONSENT
TO CREDIT AGREEMENT AND FIRST AMENDMENT
TO HOLDINGS GUARANTY
This SECOND AMENDMENT AND CONSENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO
HOLDINGS GUARANTY (this "Amendment") is dated as of March 9, 1998 and entered
into by and among XXXXX II, INC. ("Company"), the financial institutions listed
on the signature pages hereof ("Lenders") and BT COMMERCIAL CORPORATION, as
Agent for Lenders ("Agent"), and is made with reference to that certain Credit
Agreement dated as of December 16, 1997, as amended by that certain First
Amendment to Credit Agreement dated as of February 10, 1998 (as so amended, the
"Credit Agreement") among Company, Lenders and Agent. Capitalized terms used
herein without definition shall have the same meanings herein as set forth in
the Credit Agreement.
RECITALS
WHEREAS, Borrowers, Lenders and Holdings desire to amend the Credit
Agreement and certain other Loan Documents to permit (i) Holdings to issue
certain promissory notes as partial consideration for an acquisition to be made
by Company, (ii) to modify the time at which each Lender shall be required to
maintain the same Pro Rata Share as under the Xxxxx I Credit Agreement and (iii)
certain other amendments as provided for herein;
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: Definitions
A. Subsection 1.1 of the Credit Agreement is hereby amended by
adding thereto the following definitions, which shall be inserted in the
proper alphabetical order:
"'Alberta Ltd.' means 000000 Xxxxxxx Ltd., an Alberta
corporation."
"'Lakeland Stock Purchase Agreement' means that certain Stock
Purchase Agreement dated as of March __, 1998 by and among Company and
the sellers named on the signature pages thereto."
"'Lakeland U.S.' means Lakeland U.S., Inc., a Delaware
corporation."
B. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the definition of Lakeland Canada in its entirety and substituting
the following therefor:
"means Lakeland Peat Xxxx Ltd., an Alberta corporation and for
purposes of borrowings to be made on the Canadian Funding Date,
Lakeland Canada shall also mean Alberta Ltd., a wholly owned Subsidiary
of Company."
1.2 Amendments to Section 2: Amounts and Terms of Commitments and
Loans
A. Commitments. Subsection 2.1A(ii) of the Credit Agreement is hereby
amended by deleting the reference to "Company" contained in the second to
last sentence and substituting "Lakeland Canada" therefor.
B. Borrowing Mechanics. Subsection 2.1B of the Credit Agreement is
hereby amended (1) by adding the phrase "or Canadian Base Rate Loans" after
(i) "Base Rate Loans" in the second sentence, (2) by replacing "(vi)" and
"(vii)" with "(vii)" and "(viii)", respectively, (3) by inserting the
following clause "(vi) in the case of Canadian Loans not made on the Closing
Date, whether such Loans shall be Canadian Base Rate Loans or Canadian
Eurodollar Rate Loans," in its appropriate numerical position and (4) by
adding the phrase "or Canadian Eurodollar Rate Loans" after the phrase "(in
the case of a Eurodollar Rate Loan)" in the third sentence and after the
phrase "made as Eurodollar Rate Loans" in the fourth sentence.
C. Disbursement of Funds. Subsection 2.1C of the Credit Agreement is
hereby amended by adding the phrase "or Canadian Base Rate Loans, as the
case may be" at the end of the second to last sentence of the last paragraph
of this subsection.
D. Rate of Interest. Subsection 2.2A is hereby amended (1) by
inserting the word "Canadian" before the words "Base Rate" at its first two
occurrences in subsection 2.2A(iii)(a), (2) by inserting the "Canadian"
before the word "Eurodollar Rate" at its first occurrence in subsection
2.2A(iii)(b) and, as applied to the last paragraph of subsection 2.2A, (3)
by inserting the word "Margin" after the words "Applicable Canadian Base
Rate", (4) by replacing the phrase "more favorable to Company" with "more
favorable to a Borrower", (5) by replacing the phrase "Company shall
promptly pay" with "such Borrower shall promptly pay" and (6) by replacing
the phrase "If Company fails" with "If a Borrower fails" at the start of the
second sentence.
E. Interest Periods. Subsection 2.2B is hereby amended by replacing
in the first sentence of subsection 2.2B, (1) the word "Company" with "a
Borrower" and (2) the words "Company's option" with "such Borrower's
option."
F. Commitment Fees. Subsection 2.3A is hereby amended by inserting
the word "Canadian" immediately before the word "Agent" in the first
sentence of subsection 2.3A(iii).
G. General Provisions Regarding Payment. Subsection 2.3C is hereby
amended by inserting the word "Canadian" immediately before the word "such"
in the second sentence of subsection 2.3C(iii).
H. Compensation for Breakage or Non-Commencement of Interest Periods.
Subsection 2.6D is hereby amended by replacing the word "Company" with "the
applicable Borrower" in subsection 2.6D(iv).
1.3 Amendments to Section 4: Conditions to Issuance of Canadian Loans
A. Lakeland Canada Documents. Subsection 4.4A is hereby amended (1)
by inserting the word "Canadian" before every occurrence of the word
"Lender" or "Agent" and, as applied to subsection 4.4A(i) only, (2) by
deleting the first occurrence of the words "good standing" and adding
immediately after the first occurrence of the word "certificate" the
following phrase "of status, compliance or good standing, as applicable."
B. Guarantor Subsidiary Documents. Subsection 4.4B is hereby amended
(1) by inserting the word "Canadian" before every occurrence of the word
"Lender" or "Agent" and, as applied to subsection 4.4A(i) only, (2) by
deleting the first occurrence of the words "good standing" and adding
immediately after the first occurrence of the word "certificate" the
following phrase "of status, compliance or good standing, as applicable."
C. Security Interests in Personal and Mixed Property. Subsection 4.4D
is hereby amended (1) by inserting the phrase "other than any peat related
licenses granted to Lakeland Canada or its Subsidiaries by any governmental
authority, in respect of which Lakeland Canada shall have used its best
efforts to obtain an assignment of such licenses or an acknowledgement of
Agent's security interest in the same" immediately after the word Collateral
in the first sentence of subsection 4.4D, (2) by replacing the word "and"
with "and/or" in subsection 4.4D(ii) and (3) by inserting the word
"Canadian" before "Lenders" in subsection 4.4D(v).
D. Completion of Proceedings. Subsection 4.4I is hereby amended by
adding the following sentence at the end thereof: "To the extent not
satisfied on the Canadian Loan Funding Date and to the extent approved in
writing by Agent, Lakeland Canada may deliver documents and take actions
otherwise required to be delivered or taken on the Canadian Loan Funding
Date within 30 days thereafter or such longer period of time as may be
approved by Agent."
1.4 Amendments to Section 6: Borrower's Affirmative Covenants
Subsection 6.10 is hereby amended by deleting the words "Closing Date"
and substituting "Canadian Loan Funding Date" therefor.
1.5 Amendments to Section 7: Borrower's Negative Covenants
Subsection 7.9 is hereby amended by inserting the clause "or leases
from governmental authorities required for the peat business" immediately
after the word "Subsidiaries" in subsection 7.9(i).
1.6 Amendments to Section 8: Events of Default
Subsection 8.16 is hereby amended by replacing subsection 8.16 with the
following:
"8.16 Conduct of Business Relating to Holdings.
Holdings shall not engage in any business other than (i) owning
the capital stock of Company, Xxxxx Horticulture Inc. and their
respective Subsidiaries, (ii) entering into and performing its
obligations under and in accordance with the Loan Documents and the
Related Agreements to which it is a party, (iii) issuing preferred
stock and/or stock warrants to Abbot Capital 1330 Investors 1, LP and
issuing promissory notes in favor of the sellers of Lakeland Canada in
connection with the acquisition of Lakeland Canada and its Subsidiaries
by Company or (iv) owning as its only assets (a) the capital stock of
Company, Xxxxx Horticulture Inc. and their Subsidiaries and (b) Cash
and Cash Equivalents in an amount not to exceed $100,000 at any one
time for the purpose of paying general operating expenses. Holdings
shall directly engage in any business or activities other than those
activities necessary to discharge its obligations as a holding company
for Company and Xxxxx Horticulture Inc.;"
Section 2. AMENDMENT TO THE HOLDINGS GUARANTY
Amendment to Section 4: Covenants.
Subsection 4.4 of the Holdings Guaranty is hereby amended by replacing
subsection 4.4 with the following:
"4.4 Conduct of Business.
Guarantor shall engage only in the business of (i) owning the
capital stock of Company, Xxxxx Horticulture Inc. and their respective
Subsidiaries, (ii) entering into and performing its obligations under
and in accordance with the Loan Documents and Related Agreements to
which it is a party and (iii) issuing preferred stock and/or stock
warrants to Abbot Capital 1330 Investors 1, LP and issuing promissory
notes in favor of the sellers of Lakeland Canada in connection with the
acquisition of Lakeland Canada and its Subsidiaries by Company.
Guarantor shall own no assets other than (a) the capital stock of
Company, Xxxxx Horticulture Inc. and their Subsidiaries and (b) Cash
and Cash Equivalents in an amount not to exceed $100,000 at any one
time for the purpose of paying its general operating expenses.
Guarantor shall not directly engage in any business and shall limit its
activities to those activities necessary to discharge its obligations
as a holding company for Company and Xxxxx Horticulture Inc."
Section 3. CONSENT
A. Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of Loan Parties contained herein,
Lenders hereby acknowledge and consent that a Master Assignment Agreement by and
among Company, Agent and Lenders reallocating each Lender's Pro Rata Share of
the Commitments to equal such Lender's Pro Rata Share under the Xxxxx I Credit
Agreement will be executed as of the Canadian Loan Funding Date and not by the
Closing Date as originally required under the Credit Agreement (it being
understood that the date for determining the Pro Rata Share of the Commitments
under the Xxxxx I Credit Agreement of LaSalle National Bank and ABN AMRO Bank
N.V., its Canadian lending Affiliate, shall be April 31, 1998 and not the
Canadian Funding Date);
B. Without limiting the generality of the provisions of subsection
10.6 of the Credit Agreement, the consent set forth above shall be limited
precisely as written and nothing in this Section 3 shall be deemed to:
1. constitute a waiver of compliance by Company with respect to any
other term, provision or condition of the Credit Agreement or any other
instrument or agreement referred to therein; or
2. prejudice any right or remedy that Agent or any Lender may now have
(except to the extent that such right or remedy was based upon existing
defaults that will not exist after giving effect to this Section 3) 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 Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
Section 4. CONDITIONS TO EFFECTIVENESS
Section 1, 2 and 3 of this Amendment and Consent 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. On or before the Second Amendment Effective Date, Company shall
deliver to Lenders (or to Agent for Lenders) executed copies of this Amendment.
B. Agent shall have received copies of this Amendment executed by
Requisite Lenders.
C. On or before the Second Amendment Effective Date, all corporate
and other proceedings taken or required to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Agent and such counsel,
and Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Agent may reasonably request.
Section 5. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. Corporate Power and Authority. Company has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "Amended Agreement").
B. Authorization of Agreements. The execution and delivery of this
Amendment and the performance of the Amended Agreement has been duly authorized
by all necessary corporate action on the part of Company.
C. Signature and Incumbency. The signature and incumbency
certificates of officers of Company delivered in connection with the Amendment
correctly reflect, as of the Second Amendment Effective Date, the signature and
incumbency of each officer of Company executing this Amendment.
D. No Conflict. After giving effect to the amendment effected
hereby, the execution and delivery by Company of this Amendment and the
performance by Company do not and will not (i) violate any provision of any law
or any governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Company
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Company or any of
its Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Company or any of its Subsidiaries
(other than Liens created under any of the Loan Documents in favor of Agent on
behalf of Lenders), or (iv) require any approval of stockholders or any approval
or consent of any Person under any Contractual Obligation of Company or any of
its Subsidiaries, except for such approvals or consents which have been obtained
on or before the Second Amendment Effective Date and disclosed in writing to
Lenders.
E. Governmental Consents. The execution and delivery by Company of
this Amendment and the performance by Company of the Amended Agreement do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other governmental
authority or regulatory body.
F. Binding Obligation. This Amendment has been duly executed and
delivered by Company and this Amendment and the Amended Agreement 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.
G. Incorporation of Representations and Warranties From Credit
Agreement. After giving effect to the amendments effected hereby, 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.
H. Absence of Default. After giving effect to the amendments
effected hereby, no event has occurred and is continuing or will result from the
consummation of the transactions contemplated by this Amendment that would
constitute an Event of Default or a Potential Event of Default.
Section 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 costs, fees and
expenses as described in subsection 10.2 of the Credit Agreement incurred by
Agent and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Company.
C. Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. Counterparts; Effectiveness. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
XXXXX II, INC.
By: /s/ Xxxx X. Xxxx
----------------
Title:
LENDERS:
BT COMMERCIAL CORPORATION, as a Domestic
Lender and as Agent
By: signature illegible
-------------------
Title: associate
---------
BT BANK OF CANADA,
as a Canadian Lender
By: /s/ Xxxxx X. Xxxxxx V.P.
------------------------
Title: Vice President
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Title: Vice President/ CFO
-------------------
BANKERS TRUST COMPANY,
as an Issuing Lender
By: signature illegible
Title: principal
---------
S-1
XXXXXX TRUST AND SAVINGS BANK,
as a Domestic Lender
By: /s/ Xxxxx Xxxxxxx
-----------------
Title: Vice President
--------------
FLEET NATIONAL BANK,
as a Domestic Lender
By:
Title:
LASALLE NATIONAL BANK,
as a Domestic Lender
By: /s/ Xxxxxx Xxxxxxxxxx
---------------------
Title: First Vice President
--------------------
NATIONSBANK OF TEXAS, N.A.,
as a Domestic Lender and Canadian Lender
By: signature illegible
-------------------
Title: vice president
--------------
UNION BANK OF CALIFORNIA, N.A.,
as a Domestic Lender and Canadian Lender
By: /s/ Xxxxxx Xxxxxxxx
-------------------
Title: Vice President
--------------
S-2
BANK OF MONTREAL,
as a Canadian Lender
By: /s/ Xxxx XxXxxx
---------------
Title: Senior Account Manager
----------------------
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as a Domestic Lender and Canadian Lender
By: signature illegible
Title: vice president
--------------
S-3
ABN AMRO BANK CANADA, as a Canadian
Lender
By:
Title:
S-4
