EXHIBIT 10.28
THIRD AMENDMENT TO CREDIT
AGREEMENT AND CONSENT
This THIRD AMENDMENT TO CREDIT AGREEMENT AND CONSENT (this
"AMENDMENT") is dated as of February 1, 2002 and entered into by and among XXXXX
NURSERIES, INC., a California corporation ("COMPANY"), SUN GRO HORTICULTURE
CANADA LTD., a Canadian corporation and successor by amalgamation to LAKELAND
CANADA LTD. ("SUN GRO CANADA"; together with Company, the "BORROWERS"), the
financial institutions listed on the signature pages hereof (each individually
referred to herein as a "LENDER" and collectively as "LENDERS"), BANKERS TRUST
COMPANY ("BTCO"), as administrative agent for Lenders (in such capacity,
"Agent"), DEUTSCHE BANK CANADA ("DB CANADA"), successor by amalgamation to BT
BANK OF CANADA, as Canadian agent (in such capacity, "CANADIAN AGENT"), BANK OF
AMERICA, N.A. (formerly Bank of America National Trust and Savings Association)
("BOFA") as syndication agent (in such capacity, "SYNDICATION AGENT"), and
XXXXXX TRUST AND SAVINGS BANK ("XXXXXX") as documentation agent (in such
capacity, "DOCUMENTATION AGENT", collectively with the Agent and the Syndication
Agent, the "AGENTS"), and, for purposes of Section 6 hereof, the Credit Support
Parties (as defined in Section 6 hereof), and is made with reference to that
certain Amended and Restated Credit Agreement dated as of June 26, 1998, by and
among Borrowers, Lenders, Syndication Agent, Documentation Agent, Canadian Agent
and Agent, as amended by that certain First Amendment to Credit Agreement dated
as of March 3, 2000 and that certain Second Amendment to Credit Agreement and
Limited Waiver dated as of November 28, 2000 (as so amended, the "CREDIT
AGREEMENT"). Capitalized terms used herein without definition shall have the
same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, the Loan Parties have requested that the Credit Agreement be
amended as provided herein;
WHEREAS, 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 THAT BECOME EFFECTIVE ON THE THIRD
AMENDMENT EFFECTIVE DATE
Effective on the Third Amendment Effective Date (hereinafter defined), the
Credit Agreement is hereby amended in accordance with this Section 1.
1.1 AMENDMENTS TO SECTION 1: DEFINITIONS.
A. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the definitions "COMMITMENT FEE PERCENTAGE" and "CONSOLIDATED EBITDA"
contained therein in their entireties and by substituting the following
therefor:
"COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, with respect to the Revolving Loan Commitments, the
percentage per annum set forth below opposite the applicable
Consolidated Leverage Ratio or the applicable period:
a. WORKING CAPITAL REVOLVING LOAN COMMITMENT:
COMMITMENT FEE
CONSOLIDATED LEVERAGE RATIO PERCENTAGE
--------------------------- ----------
Greater than or equal to 3.50:1.00 0.50%
Less than 3.50:1.00 0.375%
b. REVOLVING B LOAN COMMITMENT:
COMMITMENT FEE
PERIOD PERCENTAGE
------ ----------
Third Amendment Effective Date
through June 15, 2002 0.50%
June 16, 2001 through but not including
Third Amendment Effective Date 0.15%
"CONSOLIDATED EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on
income, (iv) total depreciation expense, (v) total amortization
expense, and (vi) other non-cash items reducing Consolidated Net Income
excluding any such charges constituting an extraordinary item or loss
or any such charge which requires an accrual of or a reserve for cash
charges for any future period LESS other non-cash items increasing
Consolidated Net Income, all of the foregoing as determined on a
consolidated basis for Company and its Subsidiaries in conformity with
GAAP; PROVIDED, HOWEVER, the portion of Consolidated EBITDA for any
applicable period attributable to Subsidiaries of the Company that are
not Domestic Subsidiaries shall not exceed 30% of total Consolidated
EBITDA for such period.
B. Subsection 1.1 of the Credit Agreement is hereby further
amended by adding thereto the following definitions, which shall be inserted in
proper alphabetical order:
"SUN GRO SALE" shall have the meaning assigned thereto in the
Third Amendment.
"THIRD AMENDMENT" means the Third Amendment to Credit
Agreement and Consent dated as of the Third Amendment Effective Date,
by and among Borrowers, Lenders, Syndication Agent, Documentation
Agent, Canadian Agent and Agent.
"THIRD AMENDMENT EFFECTIVE DATE" means February 1, 2002, the
date on which the Third Amendment became effective in accordance with
its terms.
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1.2 AMENDMENTS TO SECTION 2: AMOUNTS AND TERMS OF COMMITMENTS AND
LOANS.
A. Subsection 2.1A(vii) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
(vii) REVOLVING B LOANS. Each Revolving B Loan Lender
severally agrees, subject to the limitations set forth below in the
last sentence hereof, to lend to Company from time to time during the
period from the Second Amendment Effective Date to the Revolving B Loan
Commitment Termination Date an aggregate amount not exceeding its Pro
Rata Share of the aggregate amount of the Revolving B Loan Commitment
to be used for the purposes identified in subsection 2.5F. The amount
of each Revolving B Loan Lender's Revolving B Loan Commitment is set
forth opposite its name on Schedule 2.1 annexed hereto and the
aggregate amount of the Revolving B Loan Commitments as of the Second
Amendment Effective Date is $30,000,000; provided that the Revolving B
Loan Commitment of Lenders shall be adjusted to give effect to any
assignments of the Revolving B Loan Commitment pursuant to subsection
10.1B; and provided further, that the Revolving B Loan Commitment shall
be reduced from time to time by the amount of any reductions thereto
made pursuant to subsections 2.4B(ii) and 2.4B(iii). Each Revolving B
Loan Lender's Revolving B Loan Commitment shall expire on the Revolving
B Loan Commitment Termination Date and all Revolving B Loans and all
other amounts owed hereunder with respect to the Revolving B Loans and
the Revolving B Loan Commitments shall be paid in full no later than
that date. Amounts borrowed under this subsection 2.1A(vii) may be
repaid and reborrowed to but excluding the Revolving B Loan Commitment
Termination Date; provided that from the Second Amendment Effective
Date through March 14, 2001 and from June 16, 2001 through the Third
Amendment Effective Date, the Company may not have any outstanding
Revolving B Loans.
B. The first paragraph of subsection 2.1C(ii) of the Credit Agreement
is hereby amended by deleting it in its entirety and substituting the following
therefor:
(ii) Promptly after receipt by Agent of a Notice of Borrowing
pursuant to subsection 2.1B (or telephonic notice in lieu thereof) for
any Tranche B Term Loans, Agent shall notify each Tranche B Term Loan
Lender of the proposed borrowing. Each Tranche B Term Loan Lender shall
make the amount of its Tranche B Term Loan available to Agent, in same
day funds in Dollars, at the Domestic Funding and Payment Office, not
later than 12:00 Noon (New York City time) on the applicable Funding
Date. Promptly after receipt by Agent of a Notice of Borrowing pursuant
to subsection 2.1B (or telephonic notice in lieu thereof) for any
Loans, Agent shall notify each Domestic Lender (in the case of a
Domestic Loan) or each Canadian Lender (in the case of a Canadian Term
Loan) of the proposed borrowing. Each Lender shall make the amount of
its Loan available to Agent (in the case of a Domestic Loan) or
Canadian Agent (in the case of a Canadian Term Loan), in same day funds
in Dollars, at the Domestic Funding and Payment Office, not later than
12:00 Noon (New York City time) (in the case of a Domestic Loan) or at
the Canadian Funding and Payment Office, not later than 12:00 Noon
(Toronto time) (in the case of a Canadian Term Loan) on the applicable
Funding Date. Except as provided in subsection 3.3B with respect to
Working Capital Revolving Loans used to reimburse any Issuing Lender
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for the amount of a drawing under a Letter of Credit issued by it, upon
satisfaction or waiver of the conditions precedent specified in
subsections 4.1 (in the case of Loans made on the Closing Date), 4.3
(in the case of Acquisition Loans), 4.5 (in the case of Revolving B
Loans) and, subject to the provisions set forth in the immediately
preceding paragraph, 4.2 (in the case of all Loans), Agent or Canadian
Agent, as the case may be, shall make the proceeds of such Loans
available to the applicable Borrower on the applicable Funding Date by
causing an amount of same day funds in Dollars equal to the proceeds of
all such Loans received by Agent or Canadian Agent, as the case may be,
from Lenders to be credited to the account of the applicable Borrower
at the Domestic Funding and Payment Office or at the Canadian Funding
and Payment Office, as applicable.
C. Subsection 2.4B(iii)(a) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
(a) PREPAYMENTS AND REDUCTIONS FROM NET ASSET SALE PROCEEDS.
(i) No later than the first Business Day following (X) the date at
which the applicable Borrower or its Subsidiaries determines such Net
Asset Sale Proceeds shall not be reinvested in property or assets used
in the business of the Borrower or its Subsidiaries and (Y) the first
Business Day which is nine months (360 days in the case of Net Asset
Sale Proceeds from the Sun Gro Sale that are not required to
immediately prepay the Loans pursuant to Section 3A of the Third
Amendment) after the date of receipt by the applicable Borrower or any
of its Subsidiaries of Net Asset Sale Proceeds other than Net Asset
Sale Proceeds covered by clause (ii) of this subsection 2.4B(iii)(a),
such Borrower shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate amount equal
to such Net Asset Sale Proceeds, PROVIDED THAT so long as no Event of
Default shall have occurred and be continuing, such Net Asset Sale
Proceeds (including Net Asset Sale Proceeds received from the Sun Gro
Sale that, pursuant to the Third Amendment, are not immediately
required to be applied to the prepayment of the Loans), to the extent
reinvested in property or assets used in the business of the Borrower
and its Subsidiaries within the nine-month period (or 360-day period,
as the case may be) are not required to be applied to prepay the Loans
and/or reduce the Revolving Loan Commitments under this subsection
2.4B(iii)(a); and (ii) Company may retain up to (X) $3,000,000 in
aggregate Net Asset Sale Proceeds from the sale of the Lake Elsinore
Property and (Y) $15,000,000 in aggregate Net Asset Sale Proceeds from
the sale of its Lagoon Valley Property, provided that Company reinvests
such Net Asset Sale Proceeds within twenty-four months of the receipt
of such Net Asset Sale Proceeds in Replacement Assets (as such term is
defined in the definition of Consolidated Capital Expenditures).
1.3 AMENDMENTS TO SECTION 3: LETTERS OF CREDIT.
Subsection 3.1A(ii) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
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(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $7,500,000;
1.4 AMENDMENTS TO SECTION 4: CONDITIONS TO LOANS AND LETTERS OF CREDIT.
A. Subsections 4.2B(v) and 4.2B(vi) of the Credit Agreement are
renumbered as subsections 4.2B(vi) and 4.2B(vii) respectively, and a new
subsection 4.2B(v) is hereby added to the Credit Agreement to read as follows:
(v) The sum of Cash constituting collected and available
balances in all Deposit Accounts and Cash Equivalents of Borrowers and
their Subsidiaries MINUS the aggregate amount of all payments
reasonably expected to be made by Borrowers and their Subsidiaries
within three Business Days of the Funding Date does not exceed
$15,000,000 or such larger amount as may be approved by Agent;
B. A new subsection 4.5 is hereby added to the Credit Agreement to read
as follows:
4.5 CONDITIONS TO REVOLVING B LOANS.
The obligations of Lenders to make the Revolving B Loans on
each Funding Date are, in addition to the conditions precedent
specified in subsections 4.1 and 4.2, subject to the Agent's receipt
prior to that Funding Date of a Notice of Borrowing certifying (with
supporting calculations) that the borrowing of such Revolving B Loan is
permitted by the indebtedness incurrence test in Section 4.12 of the
Subordinated Note Indenture and will constitute "Senior Debt" for
purposes thereof.
1.5 AMENDMENTS TO SECTION 7: BORROWERS' NEGATIVE COVENANTS.
A. Subsection 7.1(iv) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
(iv) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any
wholly-owned Subsidiary of Company may become and remain liable with
respect to Indebtedness to Company or any other wholly-owned Subsidiary
of Company; PROVIDED that (a) all such intercompany Indebtedness shall
be evidenced by promissory notes that are pledged to Agent pursuant to
the terms of the applicable Collateral Document, (b) all such
intercompany Indebtedness owed by any Borrower to any of its
Subsidiaries shall be subordinated in right of payment to the payment
in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement, and (c)
any payment by any Subsidiary of any Borrower under any guaranty of the
Obligations shall result in a PRO TANTO reduction of the amount of any
intercompany Indebtedness owed by such Subsidiary to such Borrower or
to any of its Subsidiaries for whose benefit such payment is made;
PROVIDED, FURTHER, that no such intercompany Indebtedness shall be
5
owing at any time from any Canadian Subsidiary to Company or any
Domestic Subsidiary other than the existing intercompany Indebtedness
described in Schedule 7.1 annexed hereto;
B. A new subsection 7.17 is hereby added to the Credit Agreement and
shall read as follows:
7.17 NO FOREIGN SUBSIDIARIES.
Company shall not, and shall not permit any of its
Subsidiaries to, create, acquire or permit to exist any Subsidiary
which is not a Domestic Subsidiary other than (a) those in existence on
January 1, 2002 and (b) Subsidiaries created solely for the purpose of
consummating the Sun Gro Sale provided that after giving effect to the
Sun Gro Sale, such Persons are not Subsidiaries of the Company.
1.6 SUBSTITUTION OF SCHEDULES.
SCHEDULE 5.1 to the Credit Agreement is hereby amended by deleting said
SCHEDULE 5.1 in its entirety and substituting in place thereof a new SCHEDULE
5.1 in the form of ANNEX A annexed hereto.
1.7 AMENDMENTS TO EXHIBITS.
NOTICE OF BORROWING. EXHIBIT I to the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefore a new EXHIBIT I in the
form of ANNEX B hereto.
SECTION 2. AMENDMENTS TO THE CREDIT AGREEMENT THAT BECOME EFFECTIVE UPON
CONSUMMATION OF THE SUN GRO SALE (HEREINAFTER DEFINED)
Provided that this Amendment has been executed and delivered by (i) the
Requisite Lenders, (ii) all Canadian Lenders, (iii) all Lenders having Working
Capital Revolving Loan Commitments, (iv) all Lenders having Domestic Term Loans
outstanding, (v) all Lenders having Acquisition Loans outstanding and (vi) all
Revolving B Loan Lenders, upon the consummation, if ever, of the Sun Gro Sale,
the Credit Agreement shall be further amended in accordance with this Section 2.
For purposes of the preceding sentence, the execution and delivery of this
Amendment by a Lender shall be binding upon any successor or assignee of such
Lender.
2.1 AMENDMENTS TO SECTION 1: DEFINITIONS.
A. Subsection 1.1 of the Credit Agreement is hereby amended by deleting
the definitions "ACQUISITION LOANS", "ACQUISITION NOTES", "APPLICABLE BASE RATE
MARGIN", "APPLICABLE EURODOLLAR RATE MARGIN", "CASH EQUIVALENTS", "CLASS",
"COMMITMENT FEE PERCENTAGE", "DOMESTIC LOANS", "DOMESTIC TERM LOANS", "DOMESTIC
TERM NOTES", "MDCP", "PRO RATA SHARE", "REQUISITE CLASS LENDERS", "REVOLVING B
LOAN COMMITMENT TERMINATION DATE", "REVOLVING LOAN COMMITMENT TERMINATION DATE",
"REVOLVING LOAN EXPOSURE", "REVOLVING LOANS" and "REVOLVING NOTES" contained
therein in their entireties and by respectively substituting the following
therefor:
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"ACQUISITION LOANS" means the Loans made by Domestic Lenders
to Company pursuant to subsection 2.1A(iii). Immediately upon
consummation of the Sun Gro Sale, all outstanding Acquisition Loans
shall be reclassified automatically into Domestic Term Loans as
provided in Section 3A of the Third Amendment.
"ACQUISITION NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E(i)(b) on the Closing Date and (ii)
any promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Acquisition
Revolving Loan Commitments and Acquisition Loans of any Domestic
Lenders prior to the consummation of the Sun Gro Sale, in each case
substantially in the form of EXHIBIT IV-B annexed hereto, as they may
be amended, supplemented or otherwise modified from time to time.
"APPLICABLE BASE RATE MARGIN" means as of any date of
determination, (i) with respect to the Loans other than the Tranche B
Term Loans and Revolving B Loans, a percentage per annum as set forth
below opposite the applicable Consolidated Leverage Ratio; (ii) with
respect to the Tranche B Term Loans, (a) if the Consolidated Leverage
Ratio is less than 4.75:1.00, 2.75% per annum and (b) otherwise, 3.00%;
and (iii) with respect to the Revolving B Loans, 2.25% per annum:
DOMESTIC TERM LOANS, WORKING CAPITAL REVOLVING LOANS AND SWING
LINE LOANS:
APPLICABLE BASE
CONSOLIDATED LEVERAGE RATIO RATE MARGIN
--------------------------- ---------------
Greater than or equal to 4.75:1.00 3.000%
Greater than or equal to 4.50:1.00
but less than 4.75:1.00 2.750%
Greater than or equal to 4.25:1.00
but less than 4.50:1.00 2.500%
Greater than or equal to 4.00:1.00
but less than 4.25:1.00 2.250%
Greater than or equal to 3.75:1.00
but less than 4.00:1.00 2.000%
Greater than or equal to 3.50:1.00
but less than 3.75:1.00 1.750%
Greater than or equal to 3.00:1.00
but less than 3.50:1.00 1.500%
Greater than or equal to 2.75:1.00
but less than 3.00:1.00 1.250%
Greater than or equal to 2.50:1.00
but less than 2.75:1.00 1.125%
Less than 2.50:1.00 1.000%
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From the date of the occurrence of the Sun Gro Sale until the
delivery of the first Compliance Certificate after such date, Company's
Consolidated Leverage Ratio shall be deemed to be the Consolidated
Leverage Ratio determined pursuant to Section 4F of the Third
Amendment, and the Applicable Base Rate Margin shall be determined
accordingly.
"APPLICABLE EURODOLLAR RATE MARGIN" means as of any date of
determination, (i) with respect to the Loans other than the Tranche B
Term Loans and Revolving B Loans, a percentage per annum as set forth
below opposite the applicable Consolidated Leverage Ratio; (ii) with
respect to the Tranche B Term Loans, (a) if the Consolidated Leverage
Ratio is less than 4.75:1.00, 3.75% per annum and (b) otherwise, 4.00%;
and (iii) with respect to the Revolving B Loans, 3.25% per annum:
DOMESTIC TERM LOANS AND WORKING CAPITAL REVOLVING LOANS:
APPLICABLE
EURODOLLAR
CONSOLIDATED LEVERAGE RATIO RATE MARGIN
--------------------------- ------------
Greater than or equal to 4.75:1.00 4.000%
Greater than or equal to 4.50:1.00
but less than 4.75:1.00 3.750%
Greater than or equal to 4.25:1.00
but less than 4.50:1.00 3.500%
Greater than or equal to 4.00:1.00
but less than 4.25:1.00 3.250%
Greater than or equal to 3.75:1.00
but less than 4.00:1.00 3.000%
Greater than or equal to 3.50:1.00
but less than 3.75:1.00 2.750%
Greater than or equal to 3.00:1.00
but less than 3.50:1.00 2.500%
Greater than or equal to 2.75:1.00
but less than 3.00:1.00 2.250%
Greater than or equal to 2.50:1.00
but less than 2.75:1.00 2.125%
Less than 2.50:1.00 2.000%
From the date of the occurrence of the Sun Gro Sale until the
delivery of the first Compliance Certificate after such date, Company's
Consolidated Leverage Ratio shall be deemed to be the Consolidated
Leverage Ratio determined pursuant to Section 4F of the Third
Amendment, and the Applicable Eurodollar Rate Margin shall be
determined accordingly.
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"CASH EQUIVALENTS" means, as at any date of determination, (a)
marketable securities (1) issued or directly and unconditionally
guaranteed as to interest and principal by the United States Government
or (2) issued by any agency of the United States the obligations of
which are backed by the full faith and credit of the United States, in
each case maturing within one year after such date; (b) marketable
direct obligations issued by any state of the United States of America
or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, the
highest rating obtainable from either Standard & Poor's Ratings Group
("S&P") or Xxxxx'x Investors Service, Inc. ("MOODY'S"); (c) commercial
paper maturing no more than one year from the date of creation thereof
and having, at the time of the acquisition thereof, a rating of at
least A-1 from S&P or at least P-1 from Moody's; (d) certificates of
deposit or bankers' acceptances maturing within one year after such
date and issued or accepted by any Lender or by any commercial bank
organized under the laws of the United States of America or any state
thereof or the District of Columbia that (1) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (2) has Tier 1 capital (as defined in such
regulations) of not less than $100,000,000; and (e) shares of any money
market mutual fund that (1) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (a) and
(b) above, (2) has net assets of not less than $500,000,000, and (3)
has the highest rating obtainable from either S&P or Moody's.
"CLASS" means, as applied to Lenders, each of the four classes
of Lenders consisting of Lenders with (i) Domestic Term Loan Exposure,
(ii) Working Capital Revolving Loan Exposure, (iii) Tranche B Term Loan
Exposure, and (iv) Revolving B Loan Exposure.
"COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, with respect to the Revolving Loan Commitments, the
percentage per annum set forth below opposite the applicable
Consolidated Leverage Ratio or the applicable period:
a. WORKING CAPITAL REVOLVING LOAN COMMITMENT:
COMMITMENT FEE
--------------
CONSOLIDATED LEVERAGE RATIO PERCENTAGE
Greater than or equal to 3.50:1.00 0.50%
Less than 3.50:1.00 0.375%
b. REVOLVING B LOAN COMMITMENT:
COMMITMENT FEE
PERIOD PERCENTAGE
------ ----------
Third Amendment Effective Date
through June 15, 2002;
February 1, 2003 through June 15, 2003; and
February 1, 2004 through June 15, 2004 0.50%
June 16, 2001 through but not including
Third Amendment Effective Date;
June 16, 2002 through January 31, 2003; and
June 16, 2003 through January 31, 2004 0.15%
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"DOMESTIC LOANS" means the Working Capital Revolving Loans,
the Revolving B Loans or the Domestic Term Loans or any combination
thereof.
"DOMESTIC TERM LOANS" means (i) the Term Loans purchased or
made by Domestic Lenders to Company pursuant to subsection 2.1A(i) and
(ii) immediately upon consummation of the Sun Gro Sale, all Acquisition
Loans outstanding on such date, which, pursuant to Section 3A of the
Third Amendment, are reclassified automatically as Domestic Term Loans
upon the consummation of the Sun Gro Sale.
"DOMESTIC TERM NOTES" means (i) the promissory notes of
Company issued pursuant to subsection 2.1E(i)(a) on the Closing Date,
(ii) the Acquisition Notes and (iii) any promissory notes issued by
Company pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Domestic Term Loan Commitments or
Domestic Term Loans of any Lenders, in each case substantially in the
form of EXHIBIT IV-A annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"MDCP" means (i) Madison Dearborn Capital Partners, L.P., a
Delaware limited partnership or (ii) if the MDCP II Guaranty has become
effective, Madison Dearborn Capital Partners II, L.P., a Delaware
limited partnership.
"MDCP GUARANTY" means the (i) MDCP Guaranty in an amount up to
$30,000,000, substantially in the form of Exhibit XXVII annexed hereto,
as such MDCP Guaranty may hereafter be amended, supplemented or
otherwise modified from time to time or (ii) upon its effectiveness,
the MDCP II Guaranty.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Domestic Term Loan
Commitment or the Domestic Term Loan of any Domestic Lender, the
percentage obtained by DIVIDING (x) the Domestic Term Loan Exposure of
that Domestic Lender BY (y) the aggregate Domestic Term Loan Exposure
of all Domestic Lenders, (ii) with respect to all payments,
computations and other matters relating to the Working Capital
Revolving Loan Commitment or the Working Capital Revolving Loans of any
Domestic Lender or any Letters of Credit issued or participations
therein purchased by any Domestic Lender, the percentage obtained by
DIVIDING (x) the Working Capital Revolving Loan Exposure of that
Domestic Lender BY (y) the aggregate Working Capital Revolving Loan
Exposure of all Domestic Lenders, (iii) with respect to all payments,
computations and other matters relating to the Tranche B Term Loan
Commitment or the Tranche B Term Loan of any Tranche B Term Loan
Lender, the percentage obtained by DIVIDING (x) the Tranche B Term Loan
Exposure of that Tranche B Term Loan Lender BY (y) the aggregate
Tranche B Term Loan Exposure of all Tranche B Term Loan Lenders, (iv)
with respect to all payments, computations and other matters relating
to the Revolving B Loan Commitment or the Revolving B Loans of any
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Domestic Lender, the percentage obtained by DIVIDING (x) Revolving B
Loan Exposure of that Domestic Lender BY (y) the aggregate Revolving B
Loan Exposure of all Domestic Lenders, and (v) for all other purposes
with respect to each Lender, the percentage obtained by DIVIDING (x)
the sum of the Domestic Term Loan Exposure of that Lender PLUS the
Working Capital Revolving Loan Exposure of that Lender PLUS the Tranche
B Term Loan Exposure of that Lender PLUS the Revolving B Loan Exposure
of that Lender BY (y) the sum of the aggregate Domestic Term Loan
Exposure of all Lenders PLUS the aggregate Working Capital Revolving
Loan Exposure of all Lenders PLUS the aggregate Tranche B Term Loan
Exposure of all Lenders PLUS the aggregate Revolving B Loan Exposure of
all Lenders, in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to subsection 10.1.
"REQUISITE CLASS LENDERS" means, at any time of determination
(i) for the Class of Lenders consisting of Domestic Term Loan Lenders,
Domestic Term Loan Lenders having or holding more than 66-2/3% of the
aggregate Domestic Term Loan Exposure of all Domestic Term Loan
Lenders, (ii) for the Class of Lenders consisting of Working Capital
Revolving Loan Lenders, Working Capital Revolving Loan Lenders having
or holding more than 66-2/3% of the aggregate Working Capital Revolving
Loan Exposure of all Working Capital Revolving Loan Lenders, (iii) for
the Class of Lenders consisting of Tranche B Term Loan Lenders, Tranche
B Term Loan Lenders having or holding more than 66-2/3% of the
aggregate Tranche B Term Loan Exposure of all Tranche B Term Loan
Lenders and (iv) for the Class of Lenders consisting of Revolving B
Loan Lenders, Revolving B Loan Lenders having or holding more than
66-2/3% of the aggregate Revolving B Loan Exposure of all Revolving B
Loan Lenders.
"REVOLVING B LOAN COMMITMENT TERMINATION DATE" means June 15,
2004.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means December
31, 2004.
"REVOLVING LOAN EXPOSURE" means the Working Capital Revolving
Loan Exposure and the Revolving B Loan Exposure or any combination
thereof.
"REVOLVING LOANS" means Working Capital Revolving Loans and
Revolving B Loans or any combination thereof.
"REVOLVING NOTES" means the Working Capital Revolving Notes
and the Revolving B Notes or any combination thereof.
B. Subsection 1.1 of the Credit Agreement is hereby further
amended by deleting the definition "ACQUISITION LOAN EXPOSURE".
C. Subsection 1.1 of the Credit Agreement is hereby further
amended by adding thereto the following definitions, which shall be inserted in
proper alphabetical order:
"MDCP II GUARANTY" means a guaranty agreement to be executed
by Madison Dearborn Capital Partners II, L.P., a Delaware limited
partnership, in favor of the Agent for the benefit of the Revolving B
Loan Lenders in an amount up to $30,000,000, substantially in the form
11
of Exhibit XXVII annexed hereto, as such guaranty agreement may
hereafter be amended, supplemented or otherwise modified from time to
time.
"MDCP II GUARANTY CONDITIONS" means the receipt by the Agent
of
(i) an executed original of the MDCP II Guaranty;
(ii) certified copies of the organization documents
of Madison Dearborn Capital Partners II, L.P. ("MDCP II"),
together with a good standing certificate from the secretary
of state of its jurisdiction of organization, each dated a
recent date prior to the date of the MDCP II Guaranty;
(iii) resolutions of the general partner of MDCP II
approving and authorizing the execution, delivery and
performance of the MDCP II Guaranty, certified as of the date
of the MDCP II Guaranty by such general partner as being in
full force and effect without modification or amendment;
(iv) signature and incumbency certificates of the
officers of the general partner of MDCP II executing the MDCP
II Guaranty;
(v) a certificate of the general partner of MDCP II
(A) certifying as to the compliance of the MDCP II Guaranty
with the terms and conditions of the limited partnership
agreement of MDCP II, (B) affirming that the representations
and warranties in Section 3 of the MDCP II Guaranty are true
and correct with respect to MDCP II as of the date of the MDCP
II Guaranty and (C) certifying that no Event of Default (as
defined in the MDCP II Guaranty) will exist after giving
effect to the MDCP II Guaranty, such certificate to be in form
and substance reasonably satisfactory to the Agent; and
(vi) a legal opinion of counsel to MDCP II in form
and substance reasonably satisfactory to Agent.
"XXXXXX BRIDGE SALE" shall have the meaning assigned thereto
in the Third Amendment.
2.2 AMENDMENTS TO SECTION 2: AMOUNTS AND TERMS OF COMMITMENTS AND
LOANS.
A. Subsection 2.1A(vii) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
(vii) REVOLVING B LOANS. Each Revolving B Loan Lender
severally agrees, subject to the limitations set forth below in the
last sentence hereof, to lend to Company from time to time during the
period from the Second Amendment Effective Date to the Revolving B Loan
Commitment Termination Date an aggregate amount not exceeding its Pro
Rata Share of the aggregate amount of the Revolving B Loan Commitment
to be used for the purposes identified in subsection 2.5F. The amount
12
of each Revolving B Loan Lender's Revolving B Loan Commitment is set
forth opposite its name on Schedule 2.1 annexed hereto and the
aggregate amount of the Revolving B Loan Commitments as of the Second
Amendment Effective Date is $30,000,000; provided that the Revolving B
Loan Commitment of Lenders shall be adjusted to give effect to any
assignments of the Revolving B Loan Commitment pursuant to subsection
10.1B; and provided further, that the Revolving B Loan Commitment shall
be reduced from time to time by the amount of any reductions thereto
made pursuant to subsections 2.4B(ii) and 2.4B(iii). Each Revolving B
Loan Lender's Revolving B Loan Commitment shall expire on the Revolving
B Loan Commitment Termination Date and all Revolving B Loans and all
other amounts owed hereunder with respect to the Revolving B Loans and
the Revolving B Loan Commitments shall be paid in full no later than
that date. Amounts borrowed under this subsection 2.1A(vii) may be
repaid and reborrowed to but excluding the Revolving B Loan Commitment
Termination Date; provided that from June 16, 2002 through January 31,
2003 and from June 16, 2003 through January 31, 2004, the Company may
not have any outstanding Revolving B Loans.
B. Subsection 2.4A of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN
COMMITMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED PAYMENTS OF TERM LOANS.
(i) SCHEDULED PAYMENTS OF DOMESTIC TERM LOANS. Company shall
make principal payments on the Domestic Term Loans in installments on
the dates and in the amounts set forth below:
------------------------------ ----------------------------
Scheduled Repayment of
Date Domestic Term Loans
------------------------------ ----------------------------
6/30/03 $3,500,000
------------------------------ ----------------------------
9/30/03 $7,000,000
------------------------------ ----------------------------
12/31/03 $7,000,000
------------------------------ ----------------------------
6/30/04 $5,000,000
------------------------------ ----------------------------
9/30/04 $10,000,000
------------------------------ ----------------------------
12/31/04 not more than
$20,295,716.38*
------------------------------ ----------------------------
*To the extent that the Net Asset Sale Proceeds of the
Sun Gro Sale exceed $113,250,000 (such excess amount,
the "Excess Amount") and/or to the extent that the
Xxxxxx Bridge Sale has occurred, such scheduled
repayments shall be reduced to the extent that such
Excess Amount and the Net Asset Sale Proceeds from the
Xxxxxx Bridge Sale are applied to prepay the Domestic
Term Loans and the Acquisition Loans pursuant to Section
3A of the Third Amendment.
; provided that the scheduled installments of principal of the Domestic Term
Loans set forth above shall be reduced in connection with any voluntary or
13
mandatory prepayments of the Domestic Term Loans in accordance with subsection
2.4B(iv); and provided, further that the Domestic Term Loans and all other
amounts owed hereunder with respect to the Domestic Term Loans shall be paid in
full no later than December 31, 2004, and the final installment payable by
Company in respect of the Domestic Term Loans on such date shall be in an
amount, if such amount is different from that specified above, sufficient to
repay all amounts owing by Company under this Agreement with respect to the
Domestic Term Loans.
(ii) [RESERVED].
(iii) SCHEDULED PAYMENTS OF TRANCHE B TERM LOANS. Company
shall make principal payments on the Tranche B Term Loans in
installments on the dates and in the amounts set forth below:
--------------------------- ---------------------------------
Date Scheduled Repayment of Tranche
B Term Loans
--------------------------- ---------------------------------
12/31/04 not more than $52,590,533.62*
--------------------------- ---------------------------------
*To the extent that the Net Asset Sale Proceeds of the
Sun Gro Sale exceed $113,250,000 (such excess amount,
the "Excess Amount") and/or to the extent that the
Xxxxxx Bridge Sale has occurred, such scheduled
repayments shall be reduced to the extent that such
Excess Amount and the Net Asset Sale Proceeds from the
Xxxxxx Bridge Sale are applied to prepay the Tranche B
Term Loans pursuant to Section 3A of the Third
Amendment.
; provided that the scheduled installments of principal of the Tranche B Term
Loans set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the applicable Tranche B Term Loans in accordance with
subsection 2.4B(iv); and provided, further that the Tranche B Term Loans and all
other amounts owed hereunder with respect to the Tranche B Term Loans shall be
paid in full no later than December 31, 2004, and the final installment payable
by the Company in respect of the Tranche B Term Loans on such date shall be in
an amount if such amount is different from that specified above, sufficient to
repay all amounts owing by Company under this Agreement with respect to the
Tranche B Term Loans.
C. Subsection 2.4B(iii)(e) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
(e) PREPAYMENTS AND REDUCTIONS FROM CONSOLIDATED EXCESS CASH
FLOW. In the event that there shall be Consolidated Excess Cash Flow
for any Fiscal Year, the applicable Borrower shall, no later than 90
days after the end of such Fiscal Year, prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an aggregate
amount equal to 50% of such Consolidated Excess Cash Flow; PROVIDED,
HOWEVER, that no prepayment pursuant to this subsection 2.4B(iii)(e)
shall be required with respect to Consolidated Excess Cash Flow for
Fiscal Year 2001.
D. Subsections 2.4(B)(iv)(a), 2.4(B)(iv)(b) and 2.4(B)(iv)(c) of the
Credit Agreement are hereby amended by deleting them in their entireties and
substituting the following therefor:
14
(iv) APPLICATION OF PREPAYMENTS AND UNSCHEDULED REDUCTIONS OF REVOLVING
LOAN COMMITMENTS.
(a) APPLICATION OF VOLUNTARY PREPAYMENTS BY TYPE OF LOANS AND
ORDER OF MATURITY. Any voluntary prepayments pursuant to subsection
2.4B(i) shall be applied as specified by the Borrower in the applicable
notice of prepayment; provided that in the event Company fails to
specify the Loans to which any such prepayment shall be applied, such
prepayment shall be applied first to repay outstanding Swing Line Loans
to the full extent thereof, second, to repay outstanding Revolving B
Loans to the full extent thereof, third to repay outstanding Working
Capital Revolving Loans to the full extent thereof, and fourth to repay
outstanding Domestic Term Loans and the Tranche B Term Loans on a pro
rata basis (in accordance with the respective outstanding principal
amounts thereof). Any voluntary prepayments of the Term Loans pursuant
to subsection 2.4(B)(i) (whether the application thereof is specified
by Company or not) shall be applied to prepay the Domestic Term Loans
and the Tranche B Term Loans on a pro rata basis (in accordance with
the respective outstanding principal amounts thereof) and to reduce the
scheduled installments of principal of the Term Loans set forth in
subsection 2.4A(i) and 2.4A(iii) in inverse order of maturity.
(b) APPLICATION OF MANDATORY PREPAYMENTS BY TYPE OF LOANS. Any
amount (the "APPLIED AMOUNT") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Loan
Commitments pursuant to subsection 2.4B(iii) shall be applied first (x)
in the event of a prepayment pursuant to subsection 2.4B(iii)(a) or
(b), to prepay the Domestic Term Loans and the Tranche B Term Loans on
a pro rata basis to the full extent thereof, and (y) in the event of a
prepayment pursuant to subsection 2.4B(iii)(c), (d) or (e), to prepay
the Domestic Term Loans and the Tranche B Term Loans on a pro rata
basis to the full extent thereof, second, to the extent of any
remaining portion of the Applied Amount, to prepay the Swing Line Loans
to the full extent thereof without permanently reducing the Swing Line
Loan Commitments by the amount of such prepayment, third to the extent
of any remaining portion of the Applied Amount, to prepay the Revolving
B Loans to the full extent thereof without permanently reducing the
Revolving B Loan Commitments, and fourth, to the extent of any
remaining portion of the Applied Amount, to prepay the Working Capital
Revolving Loans to the full extent thereof but without permanently
reducing the Working Capital Revolving Loan Commitments by the amount
of such prepayment.
(c) APPLICATION OF MANDATORY PREPAYMENTS OF TERM LOANS BY
ORDER OF MATURITY. Any mandatory prepayments of the Term Loans pursuant
to subsection 2.4B(iii) shall be applied to reduce the scheduled
installments of principal of the Term Loans set forth in subsections
2.4A(i) and 2.4A(iii) in inverse order of maturity. In the case of any
such mandatory prepayment of the Tranche B Term Loans with respect to
which Company has given Agent written notification, prior to Agent's
receipt of such mandatory prepayment, that Company has elected to give
each Lender of Tranche B Term Loans the option to waive their rights to
receive such prepayment (a "WAIVABLE MANDATORY PREPAYMENT"), Agent
shall, upon receipt of such Waivable Mandatory Prepayment, notify each
15
Lender of Tranche B Term Loans of such receipt and of the amount of
such Waivable Mandatory Prepayment to be applied to such Lender's
Tranche B Term Loan and of the designation of such Waivable Mandatory
Prepayment as such by Company, PROVIDED FURTHER that Company shall use
its reasonable efforts to notify Tranche B Term Loan Lenders of such
Waivable Mandatory Prepayment three Business Days prior to the payment
to Agent of such Waivable Mandatory Prepayment (it being understood
that Company shall have no liability for failing to so notify Tranche B
Term Loan Lenders). In the event any Tranche B Term Loan Lender desires
to waive such Lender's right to receive such Waivable Mandatory
Prepayment, (A) such Lender shall so advise Agent in writing no later
than the close of business on the date it receives such notice from
Administrative Agent and (B) upon receipt of such written advice from
such Lender, Agent shall apply 100% of the amount so waived by such
Lender to prepay the Domestic Term Loans on a pro rata basis to the
full extent thereof.
2.3 AMENDMENTS TO SECTION 6: BORROWERS' AFFIRMATIVE COVENANTS.
Subsection 6.9B of the Credit Agreement is hereby amended by deleting
it in its entirety and substituting the following therefor:
B. [RESERVED.]
2.4 AMENDMENTS TO SECTION 7: BORROWERS' NEGATIVE COVENANTS.
A. Subsection 7.4(vi) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
(vi) Company may become and remain liable with respect to
Contingent Obligations under Currency Agreements pursuant to which
Company obtains foreign currency from another Person (the
"COUNTERPARTY") in exchange for Dollars; PROVIDED that (a) the
aggregate notional amount for all such Currency Agreements outstanding
at any one time shall not exceed the equivalent of $10,000,000, (b) the
aggregate amount of foreign currency required to be delivered on any
one day by one or more Counterparties under all such Currency
Agreements outstanding at any one time shall not exceed the equivalent
of $5,000,000; (c) the tenor of any such Currency Agreement shall not
exceed twenty-four (24) months, and (d) the expiration date of any such
Currency Agreement under which any Lender or any Lender or any of its
Affiliates is the counterparty shall not be later than the date of
termination of the Working Capital Revolving Loan Commitments;
B. Subsection 7.6 of the Credit Agreement is hereby amended by deleting
it in its entirety and substituting the following therefor:
7.6 FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO. Company shall not permit the ratio
of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense for any four
Fiscal Quarter period ending in the last day of the applicable Fiscal Quarter
set forth below to be less than the correlative ratio indicated:
16
MINIMUM INTEREST
PERIOD COVERAGE RATIO
------ --------------
4th Fiscal Quarter, 2001 1.83:1.00
1st Fiscal Quarter, 2002 1.65:1.00
2nd Fiscal Quarter, 2002 1.65:1.00
3rd Fiscal Quarter, 2002 1.90:1.00
4th Fiscal Quarter, 2002 2.00:1.00
1st Fiscal Quarter, 2003 2.00:1.00
2nd Fiscal Quarter, 2003 2.00:1.00
3rd Fiscal Quarter, 2003 2.00:1.00
4th Fiscal Quarter, 2003 2.10:1.00
1st Fiscal Quarter, 2004 2.10:1.00
2nd Fiscal Quarter, 2004 and thereafter 2.25:1.00
For purposes of this subsection 7.6A, (a) Consolidated Interest Expense
shall be reduced by an amount equal to the product of (i) the principal
amount of Term Loans and Acquisition Loans prepaid in connection with
the Sun Gro Sale and the Xxxxxx Bridge Sale TIMES (ii) the sum of (A)
the Adjusted Eurodollar Rate PLUS (B) the Applicable Eurodollar Rate
Margin for Domestic Term Loans, Canadian Term Loans, Acquisition Loans,
Working Capital Revolving Loans and Swingline Loans in effect at the
time the Sun Gro Sale is consummated TIMES (iii) a fraction, the
numerator of which is the number of calendar days ending during such
four Fiscal Quarter period and prior to the date that the Sun Gro Sale
is consummated and the denominator of which is 365 and (b) Consolidated
EBITDA shall be calculated on a Pro Forma Basis (after giving effect to
the Sun Gro Sale) for each of the four Fiscal Quarters ended subsequent
to the Sun Gro Sale.
B. MAXIMUM CONSOLIDATED LEVERAGE RATIO. Company shall not permit its
Consolidated Leverage Ratio, calculated on a Pro Forma Basis, as of the last day
of any Fiscal Quarter set forth below for the four Fiscal Quarter period ending
on such day to exceed the correlative ratio indicated:
MAXIMUM CONSOLIDATED
PERIOD LEVERAGE RATIO
------ --------------
4th Fiscal Quarter, 2001 4.90:1.00
1st Fiscal Quarter, 2002 4.80:1.00
2nd Fiscal Quarter, 2002 5.10:1.00
3rd Fiscal Quarter, 2002 5.05:1.00
4th Fiscal Quarter, 2002 4.85:1.00
1st Fiscal Quarter, 2003 4.85:1.00
2nd Fiscal Quarter, 2003 4.85:1.00
3rd Fiscal Quarter, 2003 4.75:1.00
4th Fiscal Quarter, 2003 4.50:1.00
1st Fiscal Quarter, 2004 4.50:1.00
2nd Fiscal Quarter, 2004 and thereafter 4.20:1.00
17
C. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit
Consolidated Net Worth at any time during any of the periods set forth below to
be less than the correlative amount indicated:
MINIMUM
PERIOD CONSOLIDATED NET WORTH
------ ----------------------
4th Fiscal Quarter, 2001 $90,000,000
1st Fiscal Quarter, 2002 $96,000,000
2nd Fiscal Quarter, 2002 $105,000,000
3rd Fiscal Quarter, 2002 $105,000,000
4th Fiscal Quarter, 2002 $105,000,000
1st Fiscal Quarter, 2003 $105,000,000
2nd Fiscal Quarter, 2003 $115,000,000
3rd Fiscal Quarter, 2003 $115,000,000
4th Fiscal Quarter, 2003 $115,000,000
1st Fiscal Quarter, 2004 $115,000,000
2nd Fiscal Quarter, 2004 and thereafter $125,000,000
For purposes of this subsection 7.6C, Consolidated Net Worth
shall be calculated without giving effect to any accelerated
amortization of goodwill required under FASB 142.
D. MINIMUM CONSOLIDATED EBITDA. Company shall not permit Consolidated
EBITDA for any four Fiscal Quarter period ending on the last day of any Fiscal
Quarter set forth below to be less than the correlative amount indicated;
provided, however, that in the event a disposition of assets or operations in an
amount in excess of $250,000 (other than a sale or disposition of the Lagoon
Valley Property) occurs in a Fiscal Quarter included in the period for which
Consolidated EBITDA is being determined, Consolidated EBITDA shall be calculated
on a Pro Forma Basis and, except with respect to the Sun Gro Sale, the number
set forth below shall be reduced by an amount which is equal to 90% of the
Consolidated EBITDA generated by the assets or operations so disposed of for the
four Fiscal Quarter period for which the determination is being made:
MINIMUM
PERIOD CONSOLIDATED EBITDA
------ -------------------
4th Fiscal Quarter, 2001 $77,000,000
1st Fiscal Quarter, 2002 $51,500,000
2nd Fiscal Quarter, 2002 $51,500,000
3rd Fiscal Quarter, 2002 $52,000,000
4th Fiscal Quarter, 2002 $53,500,000
1st Fiscal Quarter, 2003 $53,500,000
2nd Fiscal Quarter, 2003 $53,500,000
3rd Fiscal Quarter, 2003 $53,500,000
4th Fiscal Quarter, 2003 $55,500,000
1st Fiscal Quarter, 2004 $55,500,000
2nd Fiscal Quarter, 2004 and thereafter $60,000,000
18
C. Subsection 7.8 of the Credit Agreement is hereby amended by deleting
it in its entirety and substituting the following therefor:
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Each Borrower shall not, and shall not permit its Subsidiaries to, make
or incur Consolidated Capital Expenditures, in any period indicated below, in an
aggregate amount in excess of the corresponding amount (the "MAXIMUM
CONSOLIDATED CAPITAL EXPENDITURES AMOUNT") set forth below opposite such period;
PROVIDED that the Maximum Consolidated Capital Expenditures Amount for any
period shall be increased by an amount equal to the excess (the "CARRY FORWARD
AMOUNT"), if any, (PROVIDED however, that in no event shall the Carry Forward
Amount exceed 10% of the Maximum Consolidated Capital Expenditures Amount for
such previous period) of the Maximum Consolidated Capital Expenditures Amount
for the previous period over the actual amount of Consolidated Capital
Expenditures for such previous period:
MAXIMUM CONSOLIDATED
PERIOD CAPITAL EXPENDITURE
------ -------------------
Fiscal Year, 2001 $15,500,000
Fiscal Year, 2002 $9,250,000
Fiscal Year, 2003 $11,000,000
Fiscal Year, 2004 and thereafter $12,000,000
2.5 AMENDMENTS TO SECTION 8: EVENTS OF DEFAULT.
Subsection 8.13 of the Credit Agreement is hereby amended by deleting
it in its entirety and substituting the following therefor:
8.13 INVALIDITY OF ANY GUARANTY.
(i) Any Guaranty for any reason, other than the satisfaction
in full of all Obligations, ceases to be in full force and effect
(other than in accordance with its terms) or is declared to be null and
void, or (ii) any Loan Party or MDCP denies that it has any further
liability, including without limitation with respect to future advances
by Lenders, under any Loan Document to which it is a party, or gives
notice to such effect, or (iii) any "Event of Default" as defined or
19
described in the MDCP Guaranty shall have occurred and be continuing,
or (iv) no later than January 4, 2003 or January 4, 2004, respectively,
the term of the Madison Dearborn Capital Partners, L.P. limited
partnership has not been extended through January 4, 2004 or January 4,
2005, respectively, and the MDCP II Guaranty Conditions have not been
satisfied; or
SECTION 3. CONSENTS
A. SUN GRO SALE. Notwithstanding any provision in the Loan Documents to
the contrary, (including, without limitation, subsection 7.1, subsection 7.3,
subsection 7.7, subsection 7.13 and subsection 8.12 of the Credit Agreement),
the Lenders party hereto consent to a transaction (the "SUN GRO SALE")
consisting of several steps, the end result of which will be the disposition by
the Loan Parties, directly or indirectly, of all of the assets and liabilities
(and, as necessary, together with the common stock of) Sun Gro Horticulture and
Sun Gro Canada to a Canadian income trust fund in exchange for proceeds received
by such trust from the sale of trust units to the public subject to satisfaction
of each of the following conditions:
(i) the Net Asset Sale Proceeds received by the Loan Parties
shall be cash in an amount not less than $105,000,000;
(ii) Company shall have delivered to the Agent an Officer's
Certificate stating that the Sun Gro Sale has been consummated in
compliance with the provisions of the Subordinated Note Indenture
(including, without limitation, Section 4.16 thereof) and, after giving
effect to the Sun Gro Sale, no "Default" or "Event of Default" exists
under the Subordinated Note Indenture;
(iii) immediately upon receipt thereof by the Loan Parties,
the first $105,000,000 of the Net Asset Sale Proceeds from the Sun Gro
Sale shall be applied in the following manner:
(a) first, to the payment in full of the Canadian
Term Loans; and
(b) second, to the payment of the Domestic Term
Loans, the Acquisition Loans and the Tranche B Term Loans, on
a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) and to reduce the
scheduled installments of principal of such Loans in direct
order of maturity,
whereupon the Canadian Borrower, the Canadian Subsidiary
Guarantors and Sun Gro Horticulture (to the extent the Sun Gro Sale
includes the sale of the capital stock of Sun Gro Horticulture) shall
be released from their respective obligations under the Loan Documents
and the Agent shall deliver to or at the direction of the Loan Parties,
at their expense, such documentation as is reasonably necessary to
evidence the release of the Agent's security interests in the capital
stock and assets of the Loan Parties transferred to the Canadian income
trust fund in connection with the Sun Gro Sale;
20
(iv) immediately upon receipt thereof by the Loan Parties, any
Net Asset Sale Proceeds in excess of $113,250,000 from the Sun Gro Sale
shall be applied to the payment of the Domestic Term Loans, the
Acquisition Loans and the Tranche B Term Loans, on a pro rata basis (in
accordance with the respective outstanding principal amounts thereof)
and to reduce the scheduled installments of principal of such Loans in
direct order of maturity;
(v) the Agent shall have received, for the account of each
Lender approving this Amendment, an amendment fee of (a) 75 basis
points of such Lender's Revolving Loan Commitment and such Lender's
outstanding Domestic Term Loans and Acquisition Loans (after giving
effect to the application of the Net Asset Sale Proceeds from the Sun
Gro Sale) and (b) 25 basis points of each consenting Lender's
outstanding Tranche B Term Loans (after giving effect to the
application of the Net Asset Sale Proceeds from the Sun Gro Sale);
(vi) the terms and conditions of the Sun Gro Sale shall
otherwise be satisfactory to the Agents;
(vii) the Agent shall have received such other documents,
agreements or information related to the Sun Gro Sale which it may
reasonably request;
(viii) this Amendment has been executed and delivered by (a)
the Requisite Lenders, (b) all Canadian Lenders, (c) all Lenders having
Working Capital Revolving Loan Commitments, (d) all Lenders having
Domestic Term Loans outstanding, (e) all Lenders having Acquisition
Loans outstanding and (f) all Revolving B Loan Lenders (for purposes of
this clause (viii), the execution and delivery of this Amendment by a
Lender shall be binding upon any successor or assignee of such Lender);
and
(ix) the Agent shall have received an executed original of an
agreement from Madison Dearborn Capital Partners II, L.P. providing
that if the term of the Madison Dearborn Capital Partners, L.P. limited
partnership fails to be extended for either of the one-year periods
ending on or about January, 4 2004 or January 4, 2005, Madison Dearborn
Capital Partners II, L.P. shall guaranty the Revolving B Loans and
execute the MDCP II Guaranty (by execution of this Amendment, the
Lenders party hereto authorize the Agent to accept the MDCP II
Guaranty, if so executed).
Upon consummation of the Sun Gro Sale and the prepayment of the
outstanding Loans with the Net Asset Sale Proceeds therefrom in the
manner described in clauses (iii) and (iv) above, all outstanding
Acquisition Loans automatically shall be reclassified as Domestic Term
Loans. The Company shall deliver to the Agent such amendments or
allonges to the Notes as are necessary to effect the purposes of the
Third Amendment.
X. XXXXXX BRIDGE SALE. Notwithstanding any provision in the Loan
Documents to the contrary (including, without limitation, subsection 7.7 of the
Credit Agreement), the Requisite Lenders consent to the sale (the "XXXXXX BRIDGE
SALE") of the property located at 0000 XX Xxxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxx
(the "XXXXXX BRIDGE ASSETS") subject to satisfaction of each of the following
conditions:
21
(i) the consideration received for the Xxxxxx Bridge Assets
shall be in an amount at least equal to the fair market value thereof
(as reasonably determined by the Board of Directors of Company);
(ii) the sole consideration received shall be in the form of
cash and shall be received in full on or before the date that the
Xxxxxx Bridge Sale is consummated; and
(iii) immediately upon receipt thereof by the Loan Parties,
the Net Asset Sale Proceeds from the Xxxxxx Bridge Sale shall be
applied in the following manner:
(a) first, to the payment of the Domestic Term Loans,
the Acquisition Loans and the Tranche B Term Loans, on a pro
rata basis (in accordance with the respective outstanding
principal amounts thereof) and to reduce the scheduled
installments of principal of such Loans in inverse order of
maturity; and
(b) second, to the payment of the Canadian Term Loans
and to reduce the scheduled installments of principal of the
Canadian Term Loans in inverse order of maturity.
Upon receipt of the Net Asset Sale Proceeds from the Xxxxxx Bridge
Sale, the Agent shall deliver to the Loan Parties, at the Loan Parties'
expense, such documentation as is reasonably necessary to evidence the
release of the Agent's security interests in the Xxxxxx Bridge Assets.
SECTION 4. CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective as of February 1, 2002 (the
"THIRD AMENDMENT EFFECTIVE DATE"), provided that all of the following conditions
precedent have been met:
A. COMPANY DOCUMENTS. On or before the Third Amendment Effective Date,
Company shall deliver to Lenders (or to Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following, each, unless otherwise noted, dated the Third Amendment Effective
Date:
1. An executed copy of this Amendment.
2. Resolutions of the Board of Directors of Company approving
and authorizing the execution, delivery and performance of this
Amendment, certified as of the Third Amendment Effective Date by the
corporate secretary or an assistant secretary of Company as being in
full force and effect without modification or amendment.
3. Such other documents as Agent may reasonably request.
22
B. EXECUTION OF AMENDMENT BY REQUISITE LENDERS. On or before the Third
Amendment Effective Date, the Requisite Lenders shall have executed and
delivered copies of this Amendment to Agent.
C. LEGAL OPINIONS. On or before the Third Amendment Effective Date, the
Agent shall have received originally executed copies of one or more favorable
written opinions of counsel for Company dated as of the Third Amendment
Effective Date which opinions shall be in form and substance reasonably
satisfactory to the Agent.
D. NO MATERIAL ADVERSE EFFECT. Since December 31, 2000, no Material
Adverse Effect shall have occurred (as determined by Agent) with respect to
Company or its Subsidiaries.
E. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company
shall have delivered to Agent an Officers' Certificate, in form and substance
satisfactory to Agent, to the effect that the representations and warranties
herein and in Section 5 of the Credit Agreement are true, correct and complete
in all material respects on and as of the Third Amendment Effective Date to the
same extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company shall have performed
in all material respects all agreements and satisfied all conditions which this
Amendment or the Credit Agreement provides shall be performed or satisfied by it
on or before the Third Amendment Effective Date except as otherwise disclosed to
and agreed to in writing by Agent and Requisite Lenders.
F. CONSOLIDATED LEVERAGE RATIO. The Consolidated Leverage Ratio
(calculated on a Pro Forma Basis after giving effect to the Sun Gro Sale and the
Xxxxxx Bridge Sale) shall be equal to or less than 4.80:1.0. For purposes of the
foregoing calculation, (i) Consolidated Average Debt (as calculated on such Pro
Forma Basis) shall be determined as of the last day of the most recently ended
month, (ii) Consolidated EBITDA shall be determined as of the last day of the
most recently ended Fiscal Quarter and (iii) the amount of Net Asset Sale
Proceeds received from the Sun Gro Sale and the Xxxxxx Bridge Sale shall assumed
to be $105,000,000 and $3,000,000 respectively.
G. OTHER PROCEEDINGS. On or before the Third Amendment Effective Date,
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 5. 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:
23
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 each Borrower of this
Amendment and the performance by such 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 such Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of such Borrower or any of
its Subsidiaries or any order, judgment or decree of any court or other agency
of government binding on such 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 Contractual Obligation of such 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 such Borrower 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 such Borrower or
any of its Subsidiaries, except for such approvals or consents which will be
obtained on or before the Third 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 such 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 obligation of
such Borrower, enforceable against such Borrower in accordance with its 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 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Third 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.
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.
24
SECTION 6. ACKNOWLEDGEMENT AND CONSENT
Each Borrower is a party to certain Collateral Documents, in each case
as amended through the Third Amendment Effective Date, pursuant to which such
Borrower has created Liens in favor of Agent on certain Collateral to secure the
Obligations. Each of the Borrowers, Xxxxx Horticulture, Inc., Sun Gro
Horticulture Inc. and MDCP (collectively, the "CREDIT SUPPORT PARTIES") is a
party to certain Guaranties and, except for MDCP, Collateral Documents, in each
case as amended through the Third Amendment Effective Date, pursuant to which
such Credit Support Party has (i) guarantied the Obligations and (ii) except for
MDCP, created Liens in favor of Agent on certain Collateral to secure the
obligations of such Credit Support Party under such Guaranty of such Credit
Support 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 Loan 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 Borrowers 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 Third 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 Borrowers) 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 Loan 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 Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
25
SECTION 7. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the Third 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 reasonable 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. 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. Company agrees that from time to time, at the
expense of Company, Company 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.
26
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.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SUN GRO HORTICULTURE CANADA LTD.
By:
--------------------------------
Name:
----------------------------
Title:
---------------------------
S-1
CREDIT SUPPORT PARTIES:
XXXXX HORTICULTURE, INC.
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
SUN GRO HORTICULTURE INC.
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
ENVIRO-SAFE LABORATORIES, INC.
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
MADISON DEARBORN CAPITAL PARTNERS, L.P.
By: MADISON DEARBORN
PARTNERS, L.P., its General Partner
By: Madison Dearborn Partners, Inc.
its General Partner
By:
----------------------------
Name:
----------------------------
Title
----------------------------
S-2
LENDERS:
BANKERS TRUST COMPANY,
as a Domestic Lender, Tranche B Term Loan
Lender, Agent and Issuing Lender
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
DEUTSCHE BANK AG, NEW YORK BRANCH, as
Issuing Lender
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
DEUTSCHE BANK CANADA,
as Canadian Agent
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
S-3
MONUMENT CAPITAL LIMITED,
as a Lender
By: ALLIANCE CAPITAL MANAGEMENT L.P., as
Investment Manager
By: ALLIANCE CAPITAL MANAGEMENT
CORPORATION, as General Partner
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
OAK MOUNTAIN LIMITED, as a Lender
By: ALLIANCE CAPITAL MANAGEMENT L.P., as
Investment Manager
By: ALLIANCE CAPITAL MANAGEMENT
CORPORATION, as General Partner
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
AIMCO CDO SERIES 2000-A,
as a Lender
By: ALLSTATE LIFE INSURANCE COMPANY
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
ALLSTATE LIFE INSURANCE COMPANY,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
S-4
BANK OF AMERICA, N.A.,
as a Lender and as Syndication Agent
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
BANK OF MONTREAL,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
BANK OF NOVA SCOTIA,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
BAY VIEW FINANCIAL CORPORATION,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
BLACK DIAMOND CLO 2000-1 LTD.,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
BOEING CAPITAL CORPORATION,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
S-5
KZH CYPRESSTREE-1 LLC,
as a Lender
By: CHASE MANHATTAN BANK
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
KZH SHOSHONE LLC,
as a Lender
By: CHASE MANHATTAN BANK
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CREDIT AGRICOLE INDOSUEZ,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CYPRESSTREE INVESTMENT FUND, LLC,
as a Lender
By: CYPRESSTREE INVESTMENT MANAGEMENT CO.,
INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
S-6
CYPRESSTREE INVESTMENT PARTNERS I, LLC, as a
Lender
By: CYPRESSTREE INVESTMENT MANAGEMENT CO.,
INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CYPRESSTREE--NORTH AMERICAN SENIOR FLOATING
RATE FUND,
as a Lender
By: CYPRESSTREE INVESTMENT MANAGEMENT CO.,
INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CYPRESSTREE SENIOR FLOATING RATE FUND, as a
Lender
By: CYPRESSTREE INVESTMENT MANAGEMENT CO.,
INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN
BRANCHES,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
S-7
FLEET NATIONAL BANK,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
FRANKLIN FLOAT RATE TRUST,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
FREMONT INVESTMENT & LOAN,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
HARCH CLO I LIMITED,
as a Lender
By: HARCH CAPITAL MANAGEMENT, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
XXXXXX TRUST AND SAVINGS BANK,
as a Lender and Documentation Agent
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
S-8
PACIFICA PARTNERS I, L.P.,
as a Lender
By: IMPERIAL CREDIT ASSET MANAGEMENT,
as Investment Manager
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
LASALLE BANK NATIONAL ASSOCATION,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
MASSACHUSETTS MUTUAL-
MAPLEWOOD (CAYMAN)LIMITED,
as a Lender
By: MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as Investment Manager
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
MASSACHUSETTS MUTUAL - SIMSBURY CLO,
LIMITED, as a Lender
By: MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as Collateral Manager
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
S-9
PNC BUSINESS CREDIT,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
NATIONAL CITY BANK,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
XXXXXXXXXXX HARBOURVIEW CDO II LTD.,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
PPM SPYGLASS FUNDING TRUST,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
S-10
XXXXX XXX & XXXXXXX CLO I LTD.,
as a Lender
By: XXXXX XXX & FARNHAM INCORPORATED, as
Portfolio Manager
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
XXXXX XXX FLOATING RATE LIMITED LIABILITY
COMPANY, as a Lender
By: XXXXX XXX & FARNHAM INCORPORATED, as
Advisor
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
XXXXX XXX CLO I,
as a Lender
By: XXXXX XXX & FARNHAM INCORPORATED, as
Portfolio Manager
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
LIBERTY-XXXXX XXX ADVISOR FLOATING
RATE ADVANTAGE FUND, as a Lender
By: XXXXX XXX & FARNHAM INCORPORATED, as
Portfolio Manager
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
S-11
SRF TRADING, INC., as a Lender
By: XXXXX XXX & XXXXXXX INCORPORATED, as
Portfolio Manager
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SRF 2000 LLC, as a Lender
By: XXXXX XXX & FARNHAM INCORPORATED, as
Portfolio Manager
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
TORONTO-DOMINION (NEW YORK), INC.
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
UNION BANK OF CALIFORNIA
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
XXXXX FARGO BANK, NA,
as a Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
S-12
ANNEX A
SUBSIDIARIES OF HOLDINGS
ANNEX B
EXHIBIT I
FORM OF NOTICE OF BORROWING
NOTICE OF BORROWING
Pursuant to that certain Amended and Restated Credit Agreement
dated as of June 26, 1998, as amended, supplemented or otherwise modified to the
date hereof (said Amended and Restated Credit Agreement, as so amended,
supplemented or otherwise modified, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Xxxxx Nurseries, Inc., a California corporation
("Company"), and Sun Gro Horticulture Canada Ltd., a Canadian corporation ("SUN
GRO CANADA" and together with Company the "BORROWERS"), the financial
institutions listed therein as Lenders ("LENDERS"), Deutsche Bank Canada as
Canadian agent ("CANADIAN AGENT"), Bank of America, N.A. (formerly Bank of
America National Trust and Savings Association) as syndication agent
("SYNDICATION AGENT"), Xxxxxx Trust and Savings Bank as documentation agent
("DOCUMENTATION AGENT") and Bankers Trust Company as administrative agent
("AGENT"), this represents [Company's] [Sun Gro Canada's] request to borrow from
Lenders, in accordance with their applicable Pro Rata Shares, as follows:
1. DATE OF BORROWING: ___________________, _________
-----------------
2. AMOUNT OF BORROWING: $___________________
-------------------
3. TYPE OF LOANS: [ ] a. Working Capital Revolving Loan
------------- [ ] b. Acquisition Loan
[ ] c. Swing Line Loan
[ ] d. Sun Gro Canada Term Loan
[ ] e. Domestic Term Loan
[ ] f. Tranche B Term Loan
[ ] g. Revolving B Loan
4. INTEREST RATE OPTION: [ ] a. Base Rate Loan(s)
-------------------- [ ] b. Eurodollar Rate Loans with an
initial Interest Period of
____________ month(s)
[ ] c. Canadian Base Rate Loans
[ ] d. Canadian Eurodollar Rate Loans
with an initial Interest Period
of ________ month(s)
The proceeds of such Loans are to be credited to the account of the applicable
Borrower at the Domestic Funding and Payment Office or at the Canadian Funding
and Payment Office, as applicable.
The undersigned officer, to the best of his or her knowledge,
and [Company][Sun Gro Canada] certify that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete
in all material respects on and as of the date hereof to the same
extent as though made on and as of the date hereof, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date;
(ii) No event has occurred and is continuing or would result
from the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
(iii) Each Borrower has performed in all material respects all
agreements and satisfied all conditions which the Credit Agreement
provides shall be performed or satisfied by it on or before the date
hereof; and
(iv) After giving effect to the requested Loans, the Total
Utilization of Working Capital Revolving Loan Commitments will not
exceed the Working Capital Revolving Loan Commitments.
(v) The sum of Cash constituting collected and available
balances in all Deposit Accounts and Cash Equivalents of Company and
its Subsidiaries minus the aggregate amount of all payments reasonably
expected to be made by Borrowers and their Subsidiaries within three
Business Days of the date hereof does not exceed [$________________] or
such larger amount as may be approved by Agent.
(vi) WITH RESPECT TO REVOLVING B LOANS ONLY: The Company
hereby certifies that the borrowing of such Revolving B Loan is
permitted by the indebtedness incurrence test in Section 4.12 of the
Subordinated Note Indenture and will constitute "Senior Debt" for
purposes thereof. Attached hereto on SCHEDULE 1 are calculations
supporting such certification.
DATED: ____________________
[XXXXX NURSERIES, INC.]
[SUN GRO HORTICULTURE CANADA LTD.]
By: __________________________
Title: __________________________
SCHEDULE 1
----------
SUPPORTING CALCULATIONS
