EXHIBIT 10.1
XXXXX NURSERIES, INC.
FOURTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT
This FOURTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT (this
"AMENDMENT") is dated as of December 27, 2006 and entered into by and among
XXXXX NURSERIES, INC., a California corporation ("COMPANY" or "BORROWER"), 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 5 hereof, the Credit Support Parties (as defined in Section
5 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 Borrower, 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 Company has advised Agent and Lenders that Company has
dissolved (i) Xxxxx SGUS Inc., a Nevada corporation ("XXXXX SGUS"), and a
Borrower under the Credit Agreement, and (ii) Xxxxx Fertilizer Inc., a Florida
corporation ("XXXXX FERTILIZER"), and a Guarantor under the Credit Agreement,
because Xxxxx SGUS and Xxxxx Fertilizer had no substantial assets or liabilities
other than under the Credit Agreement;
WHEREAS, in the Third Amendment and Limited Waiver to Credit Agreement
dated as of August 8, 2006 among the Company, certain of its affiliates, the
Agent and the Lenders party thereto, the Revolving Loan Commitments were reduced
to $100,000,000 and, based on the Company's financial condition, certain
covenants were added which temporarily reduced the availability under the Credit
Agreement and the Company's ability to borrow up to the entire amount of the
Revolving Loan Commitments;
WHEREAS, the Company has requested that the Credit Agreement be amended as
provided herein, including providing for increased availability under the Credit
Agreement in the event certain conditions are met; and
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. Section 1.1 of the Credit Agreement is hereby amended by deleting
the definition of "2006 Required Asset Sales" and by inserting in lieu thereof
the following:
"2006 REQUIRED ASSET SALES" means the sales of the assets identified
on the 2006 Required Asset Sale Schedule dated as of July 6, 2006, as amended
and restated as of December 27, 2006, which amended and restated schedule has
been previously delivered by Borrower to Agent and Lenders.
1.2 AMENDMENTS TO ARTICLE 8: NEGATIVE COVENANTS.
A. Section 8.1(c) of the Credit Agreement shall be amended by deleting
it in its entirety and by inserting in lieu thereof the following:
"(c) MAXIMUM UTILIZATION. (i) Subject to the succeeding clause (ii),
the Borrower shall not permit Total Revolving Utilization at any time to exceed
the maximum Total Revolving Utilization for corresponding Fiscal Quarter as set
forth on the Maximum Projected Utilization Schedule dated as of July 6, 2006 and
previously delivered by Borrower to Agent and Lenders; and (ii) the foregoing
clause (i) shall no longer apply upon Borrower's delivery of a Compliance
Certificate to Agent demonstrating Borrower's compliance with the Fixed Charge
Coverage Ratio set forth in SECTION 8.1(A) for the twelve-month period ending
December 31, 2007, or for any twelve-month period ending thereafter. Upon the
effectiveness of clause (ii), Borrower shall not permit Total Revolving
Utilization to exceed the lesser of (x) the aggregate of all Lenders' Revolving
Loan Commitments or (y) subject to SECTION 2.2(B), the Borrowing Base."
B. RESTRICTIONS ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Section 8.5(g) of the Credit Agreement shall be amended by adding at the
beginning thereof the following:
"(i) Borrower and its Subsidiaries shall sell the assets described in
items (1) and (3) of the 2006 Required Asset Sale Schedule by January 31, 2007,
and shall sell the assets described in item (2) of the 2006 Required Asset Sale
Schedule by March 31, 2007, in each case on the terms and conditions set forth
in the 2006 Required Asset Sale Schedule; and (ii)."
SECTION 2. LIMITED WAIVER
Subject to the terms and conditions set forth herein and in reliance
on the representations and warranties of Borrower herein contained, Lenders
hereby waive compliance with the provisions of Section 8.1(a) of the Credit
Agreement for the fourth Fiscal Quarter in Fiscal Year 2006.
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 Borrower with the provisions
of Section 8.1(a) 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 Borrower with respect to
(i) Section 8.1(a) 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; 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. CONDITIONS TO EFFECTIVENESS
Sections 1 and 2 of this Amendment shall become effective as of
December 27, 2006 (the "FOURTH AMENDMENT EFFECTIVE DATE") only upon the
satisfaction of all of the following conditions precedent:
A. BORROWER DOCUMENTS. Borrower shall deliver to Lenders on or before
the Fourth Amendment Effective Date the following, each, unless otherwise noted,
dated as of the Fourth Amendment Effective Date:
1. Signature and incumbency certificates of its officers executing
this Amendment; and
2. Copies of this Amendment executed by Borrower 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. 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 4. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Borrower represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. 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 Borrower.
C. NO CONFLICT. The execution and delivery by Borrower of this
Amendment and the performance by 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 Borrower or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of Borrower or any of its Subsidiaries or
any order, judgment or decree of any court or other agency of government binding
on 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 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 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 Borrower or any of its Subsidiaries, except for
such approvals or consents which will be obtained on or before the Fourth
Amendment Effective Date and disclosed in writing to Lenders.
D. GOVERNMENTAL CONSENTS. The execution and delivery by Borrower of
this Amendment and the performance by 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 Borrower and is the legally valid and binding obligations of
Borrower, enforceable against 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.
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 Fourth Amendment Effective Date and on and as of the
date of the execution of this Amendment by Borrower 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 5. ACKNOWLEDGEMENT AND CONSENT
Each of the Borrower and Xxxxx Horticulture, Inc. (collectively, the
"CREDIT SUPPORT PARTIES") is a party to certain Guaranties and Collateral
Documents, in each case as amended through the Fourth 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 Fourth 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 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 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
CREDIT DOCUMENTS.
(i) On and after the Fourth 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. 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 Borrower.
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. Borrower agrees that from time to time, at the
expense of Borrower, 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.
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.
BORROWER:
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
ADDITIONAL CREDIT SUPPORT PARTIES:
XXXXX HORTICULTURE, INC.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
LENDERS:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Agent and Lender
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Director
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By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
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Title: Director
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Bank of America, N.A., as Lender
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
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Title: Vice President
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THE CIT GROUP/BUSINESS CREDIT, INC., as Lender
By: /s/ Xxxx Xxx
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Name: Xxxx Xxx
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Title: Vice President
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LASALLE BUSINESS CREDIT, LLC, as Lender
By: /s/ Xxxxx Walthe
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Name: Xxxxx Walthe
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Title: First Vice President
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COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.
"RABOBANK INTERNATIONAL" NEW YORK BRANCH, as Lender
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
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Title: Vice President
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By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Vice President
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PNC BANK, NATIONAL ASSOCIATION, as Lender
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: Vice President
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XXXXX FARGO BANK, N.A., as Lender
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Senior Vice President
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