EXHIBIT 10.1
SIXTH AMENDMENT
TO CREDIT AND SECURITY AGREEMENT
SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT, dated as of
June 30, 2004 (the "Amendment"), among FRANK'S NURSERY & CRAFTS, INC., a
Delaware corporation ("Borrower"), and KIMCO CAPITAL CORP., as lender
("Lender"):
W I T N E S S E T H:
WHEREAS, Borrower and Lender are parties to that certain
Credit and Security Agreement, dated as of May 20, 2002, (as amended by that
certain First Amendment and Waiver to Credit and Security Agreement, dated as of
January 23, 2003, that certain Second Amendment to Credit and Security
Agreement, dated as of July 7, 2003, that certain Third Amendment to Credit and
Security Agreement, dated as of October 30, 2003, that certain Fourth Amendment
to Credit and Security Agreement, dated as of January 16, 2004, and that certain
Fifth Amendment to Credit and Security Agreement, dated as of January 21, 2004,
and as the same may be further amended, modified or supplemented from time to
time, the "Credit Agreement"); and
WHEREAS, Borrower has requested that Lender commit to extend
Overline Revolving Credit Loans in an amount that exceeds the current maximum of
Overline Revolving Credit Loans by $15,000,000 (the "Incremental Loan Amount");
and
WHEREAS, the parties have agreed, subject to and upon the
terms and conditions set forth herein, to amend the Credit Agreement as set
forth herein in order to provide for such additional Revolving Credit Loans;
NOW, THEREFORE, for good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to such terms in
the Credit Agreement, as amended hereby.
2. Consent. In reliance upon the representations and
warranties of the Borrower set forth in Section 5 below, subject to the
satisfaction of the conditions set forth in Section 6 below and subject to
Congress Financial Corporation ("Congress") entering into an intercreditor
agreement with the Lender within 30 days of the execution of this Amendment,
such intercreditor agreement to be in form and substance reasonably acceptable
to Lender, the Lender hereby consents to the execution and delivery of that
certain Fifth Amendment to the Loan and Security Agreement, dated as of May 20,
2002, as amended, among Congress, Borrower and the lenders party thereto (the
"Congress
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Loan Agreement"), including the creation of the junior subordinated liens as
provided for in Section 1.97 of the Congress Loan Agreement.
3. Amendments to Credit Agreement. The Credit Agreement is,
effective as of the Sixth Amendment Effective Date, hereby amended as follows:
(i) Section 1.2(c) is hereby amended and restated in its entirety
as follows:
"(c) The Lender agrees upon the terms and subject to the conditions
herein set forth, to make available to Borrower, commencing on the
Sixth Amendment Effective Date and ending on the Overline Credit
Termination Date, Revolving Credit Loans (each an "Overline Revolving
Credit Loan" and collectively, the "Overline Revolving Credit Loans")
in an aggregate amount not to exceed $40,000,000. Subject to the
foregoing and within the foregoing limits, Borrower may borrow, repay
(and subject to the provisions of Sections 1.8 and 1.9 of the Credit
Agreement, prepay) and reborrow Overline Revolving Credit Loans from
time to time prior to the Overline Credit Termination Date, subject to
the terms, provisions and limitations set forth herein. The Overline
Revolving Credit Loans shall be made without regard to whether, after
giving effect thereto, the aggregate principal amount of the Revolving
Credit Loans outstanding at such time exceeds the Revolving Credit
Commitment; provided, however, that the Incremental Loan Amount shall
only be available in the 9th and 10th Accounting Periods and shall not
exceed $1,000,000 at the end of the 9th Accounting Period and
$6,000,000 at the end of the 10th Accounting Period, unless otherwise
consented to by the Lender. Notwithstanding anything in this Agreement
to the contrary (including, without limitation, the provisions of
Section 1.4(c)), upon the occurrence of the Overline Credit Termination
Date, all Overline Revolving Credit Loans outstanding at such time
shall immediately become due and payable and Borrower shall permanently
repay all such Overline Revolving Credit Loans as of such date,
together with all accrued and unpaid interest due on such Loans, and
the commitment of Lender to provide Overline Revolving Credit Loans
pursuant to this Section 1.2(c) shall permanently terminate. All
Overline Revolving Credit Loans shall constitute Revolving Credit Loans
as such term is used in this Credit Agreement, and the Overline
Revolving Credit Loans and all amounts due in connection therewith
(including, without limitation, interest thereon) shall constitute
Obligations under this Credit Agreement and shall be secured by the
Collateral and the Non-Realty Collateral to the same extent as all
other Obligations hereunder.";
(ii) Section 1.14 is hereby amended and restated in its entirety as
follows:
The Loans shall be used to finance Borrower's obligations under the
Plan of Reorganization, to pay Fees and other expenses incurred in
connection with this Credit Agreement and for general corporate
purposes in
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accordance with the provisions of this Credit Agreement; provided, that
the Overline Revolving Credit Loans may only be used to fund
expenditures in accordance with the Financing Projections and,
notwithstanding any other provision of this Agreement, Lender shall
have no obligation to make Overline Revolving Credit Loans other than
in accordance with the Financing Projections.
4. Further Assurances. In consideration for the Overline
Revolving Credit Loans and the other consideration provided for in this
Amendment, as security for the due and punctual payment of the Obligations
(including the Overline Revolving Credit Loans provided for in this Amendment
and including interest accruing on and after the filing of any petition in
bankruptcy or of reorganization of Borrower, whether or not post filing interest
is allowed in such proceeding):
(i) Borrower hereby agrees to grant, mortgage, pledge, assign,
transfer, set over, convey and deliver to Lender, promptly upon the request of
Lender, a security interest in and lien upon all right, title and interest of
the Borrower in any all real property, owned or leased, in which Borrower may at
any time hereafter acquire or have an interest; and
(ii) Borrower agrees that at any time and from time to time, at
Borrower's expense, Borrower will promptly execute and deliver all further
instruments and documents, and take all further action that Lender may
reasonably request, in order to perfect and protect the security interests
granted in respect of the Obligations or to enable Lender to exercise and
enforce its rights, powers and remedies with respect to the Collateral, the
Inventory Collateral, the Supplemental Collateral and any other collateral that
may secure the Obligations in the future.
5. Representations and Warranties. Borrower represents and
warrants to, and agrees with, Lender that:
(i) Borrower has the corporate power and authority to (x) execute,
deliver and perform, as applicable, its obligations under this Amendment and any
other documents contemplated hereby or thereby to which it is or will be a party
and (y) grant to Lender a lien and security interest in the Supplemental
Collateral;
(ii) the execution, delivery and performance of this Amendment (a) have
been duly authorized by all necessary corporate action on the part of Borrower,
(b) will not constitute a violation of any provision of any Applicable Law or
any order of any Governmental Authority applicable to Borrower or any of its
properties or assets, (c) will not violate any provision of the Certificate of
Incorporation, By-Laws, or any other organizational document of, or other
similar instrument to which Borrower is a party or by which Borrower or any of
its properties or assets are bound or to which Borrower is subject, (d) subject
to amendment or waiver of the Working Capital Facility, will not be in conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under, or create any right to terminate, any indenture,
agreement, bond, note, mortgage, deed of trust, or other instrument to which
Borrower is a party or by
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which Borrower or any of its properties or assets are bound or to which Borrower
is subject and (e) will not result in the creation or imposition of (or the
obligation to create or impose) any Lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of Borrower other than pursuant
to the Credit Agreement (as amended) or the other Fundamental Documents (as
amended);
(iii) upon its execution and delivery by Borrower, this Amendment and
each Fundamental Document amended pursuant hereto shall constitute or continue
to constitute the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of equity, irrespective of
whether such enforceability is considered in a proceeding at law or in equity;
(iv) as of the Sixth Amendment Effective Date, there are no outstanding
Defaults or Events of Default under the Credit Agreement;
(v) Borrower is not in violation of any Applicable Law (including,
without limitation, any Environmental Law) or any restrictions of record or
agreements affecting the Collateral, the Inventory Collateral or the
Supplemental Collateral, except for violations which in the aggregate could not
reasonably be expected to have a Material Adverse Effect;
(vi) The Overline Revolving Credit Loans and all obligations related
thereto constitute Obligations under the Credit Agreement and the other
Fundamental Documents, including, without limitation, the Security Documents;
and
(vii) All representations and warranties set forth in the Credit
Agreement and the other Fundamental Documents, including as set forth in Article
2 of the Credit Agreement, are true and correct in all material respects on and
as of the Sixth Amendment Effective Date with the same effect as if made on and
as of such date, except to the extent such representations and warranties
expressly relate to an earlier date.
6. Conditions to Effectiveness. This Amendment shall become
effective on the date (the "Sixth Amendment Effective Date") upon which Lender
notifies Borrower that it is satisfied that each of the following conditions
have been met:
(i) Lender shall have received an executed counterpart of this
Amendment bearing the signature of Borrower;
(ii) Borrower shall have delivered to Lender the Financing
Projections and Lender shall have approved the same;
(iii) Borrower shall have delivered to Lender such other
documents and information as Lender may reasonably request, including,
without limitation, Security Documents relating to any collateral;
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(iv) Lender's counsel shall be satisfied that either (a) the
execution of this Amendment and incurrence of by Borrower of the
Overline Revolving Credit Loans and other Obligations hereunder in no
way constitutes an event of default or an event which with the giving
of notice or the passage of time, or both, would constitute an event of
default under the Working Capital Facility or any other agreement,
instrument or document executed in connection with the Working Capital
Facility, or (b) Congress shall have waived any such event;
(v) Lender shall have received the written opinion of a)
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx, LLP, counsel to Borrower, dated the
Sixth Amendment Effective Date and addressed to Lender with respect to
such matters relating to this Amendment as may be requested by Lender
and its counsel, which opinion shall be in form and substance
satisfactory to Lender and its counsel, and b) Borrower's in-house
counsel, dated the Sixth Amendment Effective Date and addressed to
Lender with respect to such matters relating to this Amendment, the
Credit Agreement and the Fundamental Documents as may be requested by
Lender and its counsel, which opinion shall be in form and substance
satisfactory to Lender and its counsel;
(vi) The Lender shall have received reimbursement or other
payment of all reasonable legal fees and expenses of Lender (including,
without limitation, the fees and disbursements of Wachtell, Lipton,
Xxxxx & Xxxx), incurred in connection with the negotiation,
preparation, execution and delivery of this Amendment and all other
documents to be delivered in connection herewith, it being understood
and agreed that the obligations of Borrower set forth in Section 7.4 of
the Credit Agreement shall extend to the negotiation, preparation,
execution and delivery of this Amendment and all other documents to be
delivered herewith;
(vii) The representations and warranties set forth herein and
in Article 2 of the Credit Agreement and in any other Fundamental
Documents then in existence shall be true and correct in all material
respects, and no Default or Event of Default shall have occurred and be
continuing;
(viii) Lender shall have received a closing certificate signed
by an Authorized Officer of Borrower, substantially in the form of
Exhibit B hereto; and
(ix) Borrower shall have executed and delivered to Lender's
counsel one or more amendments to the Mortgages as requested by Lender,
which amendments shall be in form and substance consistent with the
terms of this Amendment and satisfactory to Lender, and such other
documents, agreements and instruments as may be required by Lender.
7. Commitment Fee. Borrower hereby agrees that, in
consideration of this Amendment, it shall pay to the Lender a commitment fee
equal to 2.5% of the Incremental Loan Amount (the "Commitment Fee"); provided,
that the Commitment Fee shall be paid as follows: upon the occurrence of the
Sixth Amendment Effective Date, an amount equal to the Commitment Fee shall be
deemed to have been advanced to the
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Borrower under the Credit Agreement, shall be added to the outstanding principal
Obligations in respect of Revolving Credit Loans under the Credit Agreement and
shall accrue interest (and otherwise be subject to the Credit Agreement) as if
such amount were actually advanced to Borrower as a Revolving Credit Loan. The
Commitment Fee shall be non-refundable and shall be fully earned upon the Sixth
Amendment Effective Date.
8. Limitations. This Amendment shall be limited precisely as
written and shall not be deemed (a) to be a consent granted pursuant to, or a
waiver or modification of any other term or condition of the Credit Agreement or
any of the instruments or agreements referred to therein or (b) to prejudice any
right or rights which Lender may now have or have in the future under or in
connection with the Credit Agreement or any of the instruments or agreements
referred to therein. Whenever the Credit Agreement is referred to in the Credit
Agreement or any of the instruments, agreements or other documents or papers
executed or delivered in connection therewith, such reference shall be deemed to
mean the Credit Agreement as modified by this Amendment.
9. Counterparts. This Amendment may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. A facsimile signature shall serve as the functional equivalent of a
manual executed signature for all purposes.
10. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the conflicts of law principles thereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Amendment to Credit and Security Agreement to be duly executed as of the day and
the year first written.
BORROWER:
FRANK'S NURSERY & CRAFTS, INC.
By: /s/ Xxxxxxx X. XxXxxxx
----------------------------
Xxxxxxx X. XxXxxxx
Vice President Legal and Secretary
LENDER:
KIMCO CAPITAL CORP.
By: /s/ Xxx Xxxxxxx
----------------------------
Xxx Xxxxxxx
Vice President of Retailer Service
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SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT
EXHIBIT B
CERTIFICATE
The undersigned, an executive officer of Frank's Nursery & Crafts, Inc., a
Delaware corporation (the "Borrower"), hereby certifies, in such officer's
representative capacity on behalf of Borrower (and not individually), that:
1. This Certificate is being delivered to Kimco Capital Corp.
("Lender"), pursuant to Section 6(viii) of the Sixth Amendment to
Credit and Security Agreement, dated as of June 30, 2004, between
Borrower and Lender (the "Sixth Amendment").
2. The representations and warranties of the Borrower contained in
Section 5 of the Sixth Amendment that are qualified as to
materiality or material adverse effect are true and correct in all
respects, and the representations and warranties of the Borrower
contained in Section 5 of the Sixth Amendment that are not so
qualified are true and correct in all material respects, in each
case as of the date hereof, other than such representations and
warranties that are made as of an earlier date, which were true and
correct as of such earlier date. The covenants and agreements
contained in the Sixth Amendment to be complied with by the Borrower
on or prior to the date hereof have been complied with in all
material respects.
Each capitalized term used but not defined herein has the meaning assigned
to it in the Sixth Amendment.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
June 30, 2004.
FRANK'S NURSERY & Crafts, Inc.
By: /s/ Xxxxxxx XxXxxxx
-------------------
Xxxxxxx XxXxxxx
Vice President Legal
and Secretary
