SIXTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.5
SIXTH AMENDMENT TO CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of November 1, 2024, is entered into by and among HYDROFARM HOLDINGS GROUP, INC., a Delaware corporation (“Company”), HYDROFARM, LLC, a California limited liability company (“HYD”), FIELD 16, LLC, a Delaware limited liability company (“F16”), Innovative Growers Equipment, Inc., an Illinois corporation, (“IGE”), Manufacturing & Supply Chain Services, Inc., a Delaware corporation (“MSCSI”, and together with the Company, HYD, F16, IGE, and any other Person incorporated under the laws of a jurisdiction located in the U.S. who is joined as a Borrower in accordance with the terms of the Credit Agreement referred to below is referred to hereinafter, each individually, as a “Borrower”, and individually and collectively, jointly and severally, as the “Borrowers”), HYDROFARM INVESTMENT CORP., a Delaware corporation (“HIC”), HYDROFARM HOLDINGS LLC, a Delaware limited liability company (“HHL”), EHH HOLDINGS, LLC, a Delaware limited liability company (“EHH”), SUNBLASTER LLC, a Delaware limited liability company (“Sunblaster”), HYDROFARM CANADA, LLC, a Delaware limited liability company (“HCL”), SUNBLASTER HOLDINGS ULC, an unlimited liability corporation existing under the laws of the Province of British Columbia (“SUN”), EDDI’S WHOLESALE GARDEN SUPPLIES LTD., a corporation organized under the laws of the Province of British Columbia (“EDDI”), HOUSE & GARDEN HOLDINGS, LLC, a Delaware limited liability company (“H&G Holdings”), AURORA INTERNATIONAL, LLC, an Oregon limited liability company (“Aurora International”), XXXXXX XXXX PRODUCTS ULC, an unlimited liability corporation existing under the laws of the Province of Alberta (“APP”), GREENSTAR PLANT PRODUCTS INC., a federal corporation organized under the laws of Canada (“GPP”), Innovative AG Installation, Inc., an Illinois corporation (“Innovative AG”), Innovative Racking Systems, Inc., an Illinois corporation (“Innovative Racking”), Innovative Shipping Solutions, Inc., an Illinois corporation (“Innovative Shipping”), Innovative Growers Equipment Canada, Inc., a corporation incorporated under the laws of the Province of Ontario (“Innovative Canada” and together with HIC, HHL, EHH, Sunblaster, HCL, SUN, EDDI, H&G Holdings, Aurora International, APP, Innovative AG, Innovative Racking and Innovating Shipping, and any other Person who is joined as a Loan Guarantor in accordance with the terms of the Credit Agreement referred to below is referred to hereinafter, each individually, as a “Loan Guarantor”, and individually and collectively, jointly and severally, as the “Loan Guarantors”, and the Borrowers and the Loan Guarantors are collectively referred to herein as the “Loan Parties” and each individually, a “Loan Party”), the Lenders (as defined below) party hereto, and JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).
RECITALS
A.Reference is hereby made to that certain Credit Agreement, dated as of March 29, 2021 (as amended by (i) that First Amendment and Joinder to Credit Agreement, dated as of August 31, 2021, (ii) that Second Amendment to Credit Agreement, dated as of October 25, 2021, (iii) that Third Amendment and Joinder to Credit Agreement dated as of August 23, 2022, (iv) that Fourth Amendment to Credit Agreement and Limited Consent and Waiver, dated as of December 22, 2022, (v) that Fifth Amendment to Credit Agreement, dated as of March 31, 2023 and (vi) as may be further amended, amended
and restated, restated, supplemented, modified or otherwise in effect from time to time prior to the date hereof, the “Existing Credit Agreement”; the Existing Credit Agreement as amended by this Amendment is hereinafter referred to as the “Credit Agreement”), by and among the Borrowers, the other Loan Parties from time to time party thereto, the Administrative Agent, and the financial institutions from time to time party thereto (collectively, the “Lenders”), pursuant to which the Lenders have made certain loans and financial accommodations available to Borrowers.
B.The Loan Parties have requested that the Administrative Agent and the Lenders make certain amendments to the Credit Agreement, and the Administrative Agent and the Lenders are willing to make such amendments, subject to and pursuant to the terms and conditions set forth herein.
C.The Loan Parties are entering into this Amendment with the understanding and agreement that, except as specifically provided herein, neither the Administrative Agent’s nor any Lender’s rights or remedies as set forth in the Credit Agreement and the other Loan Documents are being waived or modified by the terms of this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
AGREEMENT
1.Defined Terms. Unless otherwise specifically defined herein, each capitalized term used herein has the meaning assigned to such term in the Credit Agreement.
2.Amendments to Existing Credit Agreement. Subject to the satisfaction in full of the conditions precedent set forth in Section 3 hereof, effective as of the Effective Date (as defined below), the Existing Credit Agreement is hereby amended as follows:
a.The definition of “Aggregate Revolving Commitment” set forth in Section 1.01 of the Existing Credit Agreement is hereby amended and restated in its entirety to read as follows:
“ “Aggregate Revolving Commitment” means, at any time, the aggregate of the Revolving Commitments of all of the Lenders, as increased or reduced from time to time pursuant to the terms and conditions hereof. As of the Sixth Amendment Effective Date, the Aggregate Revolving Commitment is $35,000,000.”
b.The definition of “Sixth Amendment Effective Date” set forth in Section 1.01 of the Existing Credit Agreement is hereby amended and restated in its entirety to read as follows:
“ “Sixth Amendment Effective Date” means November 1, 2024.”
c.The Commitment Schedule to the Credit Agreement is hereby amended and restated in its entirety by Annex A attached hereto.
3.Conditions Precedent to Effectiveness of this Amendment. This Amendment shall become effective as of the date on which each of the following conditions precedent has been satisfied in full (the “Effective Date”):
a.Amendment. Each of the Borrowers, the other Loan Parties, the Administrative Agent and the Lenders shall have duly executed and delivered this Amendment, and the Administrative Agent shall have received a fully executed counterpart hereof.
b.Representations and Warranties. The representations and warranties of the Loan Parties set forth herein and in the Loan Documents must be true and correct in all material respects with the same effect as though made on the date hereof (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects).
c.Fees and Expenses. The Lenders and the Administrative Agent shall have received all fees required to be paid, and all expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Effective Date.
d.Other Required Documentation. The Administrative Agent shall have received such other documents as the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably requested.
4.Representations and Warranties. Each Borrower and each other Loan Party represents and warrants as follows:
a.Authority; Enforceability. The transactions contemplated by this Amendment are within each Loan Party’s corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational actions and approvals and, if required, actions and approvals by equity holders. This Amendment and each other Loan Document (as amended or modified hereby) to which each Loan Party is a party has been duly executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable Insolvency Laws, examinership, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
b.Representations and Warranties. After giving effect to this Amendment, the representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct in all material respects with the same effect as though made on and as of the date hereof (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects).
c.No Default. At the time of and immediately after giving to this Amendment, no Default has occurred and is continuing.
5.Governing Law; Waiver of Jury Trial. This Amendment shall be governed by and construed in accordance with the internal laws (and not the law of conflicts) of the State of New York, but giving effect to federal laws applicable to national banks. The other terms of Section 9.09 and 9.10 of the Credit Agreement shall apply hereto as if fully set forth herein, mutatis mutandis.
6.Counterparts; Electronic Execution. This Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by telecopy, emailed pdf. or any other electronic means that complies with the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, or any other relevant and applicable electronic signatures law shall be effective as delivery of a manually executed counterpart of this Amendment. Each party agrees that this Amendment may be electronically signed, and that any electronic signatures appearing on this Amendment are the same as handwritten signatures for the purposes of validity, enforceability, and admissibility. As used herein, “electronic signatures” mean any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record. Notwithstanding the foregoing, the Loan Parties shall promptly deliver original signatures of this Amendment to the Administrative Agent.
7.Reference to and Effect on the Loan Documents.
a.Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “hereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.
b.Except as specifically set forth in this Amendment, the Credit Agreement and all other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified, and confirmed and shall constitute the legal, valid, binding, and enforceable obligations of the Borrowers and the other Loan Parties
to Administrative Agent and the Lenders without defense, offset, claim, or contribution.
c.The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of Administrative Agent or any Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.
8.Ratification. Each Borrower and each other Loan Party hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement, as amended hereby, and the Loan Documents effective as of the date hereof.
9.Release; Covenant Not to Sue.
a.Each Loan Party hereby absolutely and unconditionally releases and forever discharges Administrative Agent and each Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing (each a “Released Party”), from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which any Loan Party has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising under or related to the Loan Documents from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown. It is the intention of each Loan Party in providing this release that the same shall be effective as a bar to each and every claim, demand and cause of action specified.
b.Each Loan Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands, or causes of action and agree that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts. Each Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.
c.Each Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Released Party above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Released Party on the basis of any claim released, remised and discharged by Borrower pursuant to the above release. If any Loan Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, each Loan Party for itself and its successors, assigns and legal representatives, agree to pay, in addition to such other damages as any Released Party may sustain as a result of such
violation, all attorneys’ fees and costs incurred by such Released Party as a result of such violation.
10.Estoppel. To induce Administrative Agent and Lenders to enter into this Amendment and to induce Administrative Agent and the Lenders to continue to make advances to Borrowers under the Credit Agreement, each Borrower and each other Loan Party hereby acknowledges and agrees that, as of the date hereof, there exists no Default or Event of Default and no right of offset, defense, counterclaim, or objection in favor of any Borrower or any other Loan Party as against Administrative Agent or any Lender with respect to the Obligations.
11.Integration. This Amendment, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.
12.Entire Agreement. The Credit Agreement, as amended hereby, and the other Loan Documents constitute the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.
13.Severability. In case any provision in this Amendment shall be invalid, illegal, or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
14.Submission of Amendment. The submission of this Amendment to the parties or their agents or attorneys for review or signature does not constitute a commitment by Administrative Agent or any Lender to waive any of their respective rights and remedies under the Loan Documents, and this Amendment shall have no binding force or effect until all of the conditions to the effectiveness of this Amendment have been satisfied as set forth herein.
[REMAINDER OF XXXX LEFT INTENTIONALLY BLANK; SIGNATURE PAGES FOLLOW.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.
BORROWERS:
a Delaware corporation
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
HYDROFARM, LLC,
a California limited liability company
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
FIELD 16, LLC,
a Delaware limited liability company
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
BORROWERS (CONT’D):
INNOVATIVE GROWERS EQUIPMENT, INC.,
an Illinois corporation
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
MANUFACTURING & SUPPLY CHAIN SERVICES, INC.,
a Delaware corporation
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
LOAN GUARANTORS:
HYDROFARM INVESTMENT CORP.,
a Delaware corporation
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
HYDROFARM HOLDINGS LLC,
a Delaware limited liability company
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
EHH HOLDINGS, LLC,
a Delaware limited liability company
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
SUNBLASTER LLC,
a Delaware limited liability company
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
HYDROFARM CANADA, LLC,
a Delaware limited liability company
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
LOAN GUARANTORS (CONT’D):
SUNBLASTER HOLDINGS ULC,
an unlimited liability corporation existing under the laws of the Province of British Columbia
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Secretary
XXXX’S WHOLESALE GARDEN SUPPLIES LTD.,
a corporation organized under the laws of the province of British Columbia
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Secretary
HOUSE & GARDEN HOLDINGS, LLC,
a Delaware limited liability company
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
AURORA INTERNATIONAL, LLC,
an Oregon limited liability company
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
LOAN GUARANTORS (CONT’D):
XXXXXX XXXX PRODUCTS ULC,
an unlimited liability corporation existing under the laws of the Province of Alberta
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Secretary
GREENSTAR PLANT PRODUCTS INC.,
a federal corporation organized under the laws of Canada
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Director
INNOVATIVE AG INSTALLATION, INC.,
an Illinois corporation
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
INNOVATIVE RACKING SYSTEMS, INC.,
an Illinois corporation
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
INNOVATIVE SHIPPING SOLUTIONS, INC.,
an Illinois corporation
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Chief Financial Officer
LOAN GUARANTORS (CONT’D):
INNOVATIVE GROWERS EQUIPMENT CANADA, INC.,
a corporation incorporated under the laws of Ontario, Canada
By: /s/ B. Xxxx Xxxxxxxx
Name: B. Xxxx Xxxxxxxx
Title: Director
JPMORGAN CHASE BANK, N.A., as a Lender, Administrative Agent, Issuing Bank and Swingline Lender
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Authorized Signatory
JPMORGAN CHASE BANK, N.A., Toronto Branch
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Authorized Officer
ANNEX A
Commitment Schedule
to
Credit Agreement
Lenders | Amount of Revolving Commitment | ||||
JPMORGAN CHASE BANK, N.A. | $35,000,000 | ||||
TOTAL | $35,000,000 | ||||
