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EXHIBIT 10.1
HINES NURSERIES, INC.
FOURTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT
This
FOURTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT (this
"AMENDMENT") is dated as of December 27, 2006 and entered into by
and among
HINES NURSERIES, INC., a California corporation ("COMPANY" or
"BORROWER"), the
financial institutions party hereto, and DEUTSCHE BANK TRUST
COMPANY AMERICAS,
as administrative agent for Lenders (in such capacity, "AGENT"),
and, for
purposes of Section 5 hereof, the Credit Support Parties (as
defined in Section
5 hereof), and is made with reference to that certain Credit
Agreement dated as
of September 30, 2003, as amended to the date hereof (the "CREDIT
AGREEMENT"),
by and among Borrower, the financial institutions party thereto
(each
individually referred to herein as a "LENDER" and collectively as
"LENDERS") and
the Agent. Capitalized terms used herein without definition shall
have the same
meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, the Company has advised Agent and Lenders that Company
has
dissolved (i) Hines SGUS Inc., a Nevada corporation ("HINES SGUS"),
and a
Borrower under the Credit Agreement, and (ii) Hines Fertilizer
Inc., a Florida
corporation ("HINES FERTILIZER"), and a Guarantor under the Credit
Agreement,
because Hines SGUS and Hines Fertilizer had no substantial assets
or liabilities
other than under the Credit Agreement;
WHEREAS, in the Third Amendment and Limited Waiver to Credit
Agreement
dated as of August 8, 2006 among the Company, certain of its
affiliates, the
Agent and the Lenders party thereto, the Revolving Loan Commitments
were reduced
to $100,000,000 and, based on the Company's financial condition,
certain
covenants were added which temporarily reduced the availability
under the Credit
Agreement and the Company's ability to borrow up to the entire
amount of the
Revolving Loan Commitments;
WHEREAS, the Company has requested that the Credit Agreement be
amended as
provided herein, including providing for increased availability
under the Credit
Agreement in the event certain conditions are met; and
WHEREAS, the Agent and
the Lenders party hereto have agreed to amend the
Credit Agreement on the terms and conditions hereinafter set
forth;
NOW,
THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree
as follows:
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SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1
AMENDMENTS TO SECTION 1.1: GENERAL DEFINITIONS.
A. Section 1.1 of the Credit Agreement is hereby amended by
deleting
the definition of "2006 Required Asset Sales" and by inserting in
lieu thereof
the following:
"2006 REQUIRED ASSET SALES" means the sales of the assets
identified
on the 2006 Required Asset Sale Schedule dated as of July 6, 2006,
as amended
and restated as of December 27, 2006, which amended and restated
schedule has
been previously delivered by Borrower to Agent and Lenders.
1.2
AMENDMENTS TO ARTICLE 8: NEGATIVE COVENANTS.
A. Section 8.1(c) of the Credit Agreement shall be amended by
deleting
it in its entirety and by inserting in lieu thereof the
following:
"(c) MAXIMUM UTILIZATION. (i) Subject to the succeeding clause
(ii),
the Borrower shall not permit Total Revolving Utilization at any
time to exceed
the maximum Total Revolving Utilization for corresponding Fiscal
Quarter as set
forth on the Maximum Projected Utilization Schedule dated as of
July 6, 2006 and
previously delivered by Borrower to Agent and Lenders; and (ii) the
foregoing
clause (i) shall no longer apply upon Borrower's delivery of a
Compliance
Certificate to Agent demonstrating Borrower's compliance with the
Fixed Charge
Coverage Ratio set forth in SECTION 8.1(A) for the twelve-month
period ending
December 31, 2007, or for any twelve-month period ending
thereafter. Upon the
effectiveness of clause (ii), Borrower shall not permit Total
Revolving
Utilization to exceed the lesser of (x) the aggregate of all
Lenders' Revolving
Loan Commitments or (y) subject to SECTION 2.2(B), the Borrowing
Base."
B. RESTRICTIONS ON FUNDAMENTAL CHANGES; ASSET SALES AND
ACQUISITIONS.
Section 8.5(g) of the Credit Agreement shall be amended by adding
at the
beginning thereof the following:
"(i) Borrower and its Subsidiaries shall sell the assets described
in
items (1) and (3) of the 2006 Required Asset Sale Schedule by
January 31, 2007,
and shall sell the assets described in item (2) of the 2006
Required Asset Sale
Schedule by March 31, 2007, in each case on the terms and
conditions set forth
in the 2006 Required Asset Sale Schedule; and (ii)."
SECTION 2. LIMITED WAIVER
Subject to the terms and conditions set forth herein and in
reliance
on the representations and warranties of Borrower herein contained,
Lenders
hereby waive compliance with the provisions of Section 8.1(a) of
the Credit
Agreement for the fourth Fiscal Quarter in Fiscal Year 2006.
Without limiting the generality of the provisions of Section 11.10
of
the Credit Agreement, the waiver set forth above shall be limited
precisely as
written and relates solely to the noncompliance by Borrower with
the provisions
of Section 8.1(a) of the Credit Agreement in the manner and to the
extent
described above, and nothing in this Waiver shall be deemed to:
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(a) constitute a waiver of compliance by Borrower with respect
to
(i) Section 8.1(a) of the Credit Agreement in any other instance
or
(ii) any other term, provision or condition of the Credit Agreement
or
any other instrument or agreement referred to therein; or
(b) prejudice any right or remedy that Agent or any Lender may
now have (except to the extent such right or remedy was based
upon
existing defaults that will not exist after giving effect to
this
Waiver) or may have in the future under or in connection with
the
Credit Agreement or any other instrument or agreement referred
to
therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Credit Documents
shall remain
in full force and effect and in all other respects are hereby
ratified and
confirmed.
SECTION 3. CONDITIONS TO EFFECTIVENESS
Sections 1 and 2 of this Amendment shall become effective as of
December 27, 2006 (the "FOURTH AMENDMENT EFFECTIVE DATE") only upon
the
satisfaction of all of the following conditions precedent:
A. BORROWER DOCUMENTS. Borrower shall deliver to Lenders on or
before
the Fourth Amendment Effective Date the following, each, unless
otherwise noted,
dated as of the Fourth Amendment Effective Date:
1. Signature and incumbency certificates of its officers
executing
this
Amendment; and
2. Copies of this Amendment executed by Borrower and the Credit
Support Parties.
B. EXECUTION OF AMENDMENT BY LENDERS. Majority Lenders shall
have
executed and delivered copies of this Amendment to Agent.
C. OTHER PROCEEDINGS. All corporate and other proceedings taken or
to
be taken in connection with the transactions contemplated hereby
and all
documents incidental thereto not previously found acceptable by
Agent, acting on
behalf of Lenders, shall be reasonably satisfactory in form and
substance to
Agent, and Agent shall have received all such counterpart originals
or certified
copies of such documents as Agent may reasonably request.
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend
the Credit Agreement in the manner provided herein, Borrower
represents and
warrants to each Lender that the following statements are true,
correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Borrower has all requisite
corporate
power and authority to enter into this Amendment and to carry out
the
transactions contemplated by, and perform its obligations under,
the Cre
