|
|
|
Exhibit 10.1
|
|
|
|
May 12, 2005
VIA FACSIMILE AND FEDERAL
EXPRESS
EASY GARDNER PRODUCTS, LTD.
3022 Franklin Avenue
Waco, TX 76710
Fax: 254.753.0468
|
|
|
|
|
Re:
|
Consent under
Subordination and Intercreditor Agreement dated as of April 27,
2004, by and among CAPITALSOURCE FINANCE LLC, (in its capacity as
agent for the Junior Lenders, together with its successors and
assigns, the “ Junior Agent ”), and in its
capacity as a Junior Lender, LASALLE BUSINESS CREDIT, LLC (in its
capacity as agent for the Senior Lenders, together with successors
and assigns, the “ Senior Agent ”), and in its
capacity as a Senior Lender and LASALLE BANK NATIONAL ASSOCIATION,
in its capacity as a Senior Lender (as amended, restated or
modified to date and from time to time, the “
Agreement ”), and waiver under that certain Term Loan
and Security Agreement dated as of October 29, 2003 by and among
EASY GARDNER PRODUCTS, LTD., a Texas limited partnership (“
Borrower ”), EYAS INTERNATIONAL, INC., a Texas
corporation, EG, L.L.C., a Nevada limited liability company, EG
PRODUCT MANAGEMENT, L.L.C., a Texas limited liability company,
WEATHERLY CONSUMER PRODUCTS GROUP, INC., a Delaware corporation,
WEATHERLY CONSUMER PRODUCTS, INC., a Delaware corporation, and NBU
GROUP, LLC, a Texas limited liability company (the “
Guarantors ”, CAPITALSOURCE FINANCE LLC, as a Lender
and Agent for the Lenders, and the Lenders from time to time party
thereto (as amended by that certain First Amendment to Term Loan
and Security Agreement dated as of October 29, 2003, and as further
amended by that certain Second Amendment to Term Loan and Security
Agreement and Waiver dated as of October 12, 2004, and as further
amended, restated or modified to date and from time to time, the
“ Junior Loan Agreement ”).
|
|
|
|
Gentlemen:
Reference
is hereby made to the Agreement. Reference is further made to that
certain Loan and Security Agreement dated as of April 27, 2004 by
and between Easy Gardner Products, Ltd., a Texas limited
partnership (“ Borrower ”), the Senior Agent and
Senior Lenders party thereto (the “ Senior Loan
Agreement ”). All capitalized terms used herein without
definition shall have the meanings ascribed to such terms in the
Agreement.
Pursuant
to Section 5(b) of the Agreement, Senior Agent and the Senior
Lenders may not amend the Senior Loan Agreement without the consent
of Junior Agent and the Junior Lenders under certain circumstances,
including but not limited to an amendment that changes the
arithmetic formula by which the Borrowing Base is calculated to the
extent that such amendment increases Availability. Borrower has
requested that Senior Agent and Senior Lenders amend the Senior
Loan Agreement to (a) provide for a letter of credit facility, and
(b) include certain inventory in transit as part of the Borrowing
Base which
|
|
Easy Gardner Products, Ltd.
May 12, 2005
Page 2
will result in increased
Availability to the Borrower; Borrower and Senior Lenders have
requested that the Junior Agent and Junior Lenders consent to such
amendment.
In
addition, Schedule 6.8 of the Junior Loan Agreement required that
Borrower be registered with appropriate Governmental Authorities as
the owner of all Intellectual Property transferred pursuant to the
Acquisition Documents no later than January 27, 2004. Borrower has
failed to be so registered with a number of Governmental
Authorities as set forth on Exhibit A attached hereto resulting in
an Event of Default pursuant to the terms of the Junior Loan
Agreement (the “IP Default”). The Borrower has
requested that Junior Agent and Junior Lenders waive the IP Default
and consent to an extension of this post-closing requirement to
June 30, 2005.
Furthermore,
pursuant to the terms of Annex I of the Junior Loan Agreement, the
Credit Parties’ Senior Leverage Ratio for the fiscal quarter
ended March 31, 2005 shall not exceed 3.4:1.0; however, the Credit
Parties’ actual Senior Leverage Ratio for such period was
3.64:1.0 resulting in an Event of Default pursuant to the terms of
the Junior Loan Agreement (the “Leverage Default”, and
together with the IP Default, the “Existing Defaults”).
The Credit Parties have requested that Junior Agent and Junior
Lenders waive the Leverage Default.
Subject
to the terms hereof, the Junior Agent and Junior Lenders hereby
agree to (a) consent to the amendment substantially set forth in
Exhibit B attached hereto (“ Amendment No. 2 to Senior
Loan Agreement ”), (b) extend the post-closing
requirement of Borrower registering with the appropriate
Governmental Authorities as the owner of all Intellectual property
transferred pursuant to the Acquisition Documents to June 30, 2005,
and (c) waive the Existing Defaults. The aforementioned waiver
relates solely to the Existing Defaults and nothing in this letter
agreement is intended or shall be construed to be a waiver by the
Juni
|
|
