LIMITED WAIVER TO LOAN AND SECURITY AGREEMENT


    Exhibit
      10.54

     

    LIMITED
      WAIVER TO LOAN
      AND SECURITY AGREEMENT

     

    This
      LIMITED WAIVER TO LOAN AND SECURITY AGREEMENT (this “Waiver”)
      dated
      as of June 28, 2007 is by and among Hines Nurseries, Inc., a California
      corporation, the parties hereto as lenders (each individually, a “Lender” and
      collectively, “Lenders” as hereinafter further defined) and Bank of America,
      N.A., in its capacity as agent for Lenders (in such capacity, “Agent”).
      Capitalized terms used and not otherwise defined herein shall have the meanings
      assigned to them in the Loan Agreement (defined below).

     

    R
      E C I T
      A L S: 

    


    WHEREAS,
      Borrower, the Agent and the Lenders have entered into that certain Loan and
      Security Agreement dated as of January 18, 2007 (as amended, the
“Loan
      Agreement”);
      and

     

    WHEREAS,
      Borrower, Agent and Lenders have agreed to extend the date for providing
      unaudited financial statements and waive certain Events of Default upon the
      terms and conditions contained herein;

     

    NOW,
      THEREFORE, in consideration of the premises contained herein, and for other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto hereby agree as follows:

     

    Section
      1     Limited
      Waiver to the Loan Agreement.
      Borrower acknowledges that certain Events of Default exist (or may arise) under
      Section 11.1 of the Loan Agreement as a result of (a) Borrower’s failure to
      deliver annual audited financial statements for the year ending December 31,
      2006 by June 28, 2007 as required by that certain Limited Waiver to Loan and
      Security Agreement dated as of May 29, 2007 among the parties hereto and (b)
      Borrower’s failure to provide notice of default under the Indenture for failure
      to provide the audited financial statements for the year ending December 31,
      2006 and unaudited financial statements for the fiscal quarter ending March
      31,
      2007 (and related public filings) as required by Section 10.1.3(c) of the Loan
      Agreement (collectively, the “Events of Default”). Immediately upon the
      satisfaction of each of the conditions precedent set forth in Section 2
      below,
      the Agent and Required Lenders hereby waive the Events of Default; provided,
      that
      Borrower shall (x) deliver such audited financial statements for the fiscal
      year
      ending December 31, 2006 required by Section 10.1.2 of the Loan Agreement
      (together with any other financial information and documents required to be
      delivered in connection with such financial statements) by no later than July
      13, 2007, (y) deliver the audited financial statements for the year ending
      December 31, 2006 required by the Indenture by no later than July 13, 2007
      and
      (z) deliver the unaudited financial statements for the fiscal quarter ending
      March 31, 2007 required by the Indenture and cure any related defaults
      thereunder by no later than July 31, 2007, in each case the failure of which
      shall cause such waivers to be terminated and result in such Events of Default
      continuing to exist under the Loan Agreement. The foregoing is a limited waiver
      and shall not constitute a waiver of any other Default or Event of Default
      that
      may exist or arise or constitute a waiver or modification to any other term
      or
      condition set forth in the Loan Agreement. 


    
      
         

      

      
        1

        
          

        

      

      
         

      

    


    Section
      2     Conditions
      to Effectiveness.
      The
      effectiveness of the waiver set forth in Section 1
      above is
      subject to the satisfaction of each of the following conditions:

     

    (a) Agent
      shall have received a duly executed counterpart of this Waiver from Borrower
      and
      the Required Lenders; and

     

    (b) Agent
      shall have received a reaffirmation from Parent of its Guaranty. 

     

    Section
      3     Representations,
      Warranties and Covenants.
      Borrower represents, warrants and covenants to Agent and Lenders, upon the
      effectiveness of this Waiver that:

     

    (a) No
      Default; etc.
      No
      Default or Event of Default has occurred and is continuing after giving effect
      to this Waiver or would result from the execution or delivery of this Waiver
      or
      the consummation of the transactions contemplated hereby.

     

    (b) Corporate
      Power and Authority; Authorization.
      Borrower has the power and authority to execute and deliver this
      Waiver.

     

    (c) Execution
      and Delivery.
      Borrower has duly executed and delivered this Waiver.

     

    (d) Enforceability.
      This
      Waiver constitutes the legal, valid and binding obligations of Borrower,
      enforceable against Borrower in accordance with its terms, except as enforcement
      may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
      laws affecting the enforcement of creditors’ right generally, and by general
      principles of equity.

     

    (e) Indenture
      Notice.
      Borrower has not received any default notices under its Indenture in respect
      of
      its 10.25% Senior Notes due 2011 dated as of September 30, 2003, between Hines
      Nurseries, Inc., Hines Horticulture, Inc., the Subsidiary Guarantors named
      therein and the Bank of New York, as Trustee.


     

    Section
      4     Miscellaneous.

     

    (a) Effect;
      Ratification.
      Borrower acknowledges that all of the reasonable legal expenses incurred by
      Agent in connection herewith shall be reimbursable under Section 3.4
      of the
      Loan Agreement. The waiver set forth herein is effective solely for the purposes
      set forth herein and shall be limited precisely as written, and shall not be
      deemed to (i) be a consent to any amendment, waiver or modification of any
      other term or condition of any Loan Document or (ii) prejudice any right or
      rights that any Lender may now have or may have in the future under or in
      connection with any Loan Document. This Waiver shall be construed in connection
      with and as part of the Loan Documents and all terms, conditions,
      representations, warranties, covenants and agreements set forth in the Loan
      Documents, except as herein amended are hereby ratified and confirmed and shall
      remain in full force and effect.

     


    
      
         

      

      
        2

        
          

        

      

      
         

      

    


    (b) Counterparts;
      etc.
      This
      Waiver may be executed in any number of counterparts, each such counterpart
      constituting an original but all together one and the same instrument. Delivery
      of an executed counterpart of this Waiver by fax shall have the same force
      and
      effect as the delivery of an original executed counterpart of this Waiver.
      Any
      party delivering an executed counterpart of this Waiver by fax shall also
      deliver an original executed counterpart, but the failure to do so shall not
      affect the validity, enforceability or binding effect of this
      Waiver.

     

    (c) Governing
      Law.
      This
      Waiver shall be deemed a Loan Document and shall be governed by, and construed
      and interpreted in accordance with the internal laws of the State of New York
      but excluding any principles of conflicts of law.

     

    (d) Reaffirmation.
      Parent
      hereby reaffirms all of its obligations as a guarantor of the Obligations
      pursuant to its Guaranty dated as of January 18, 2007.

     

     

    [Signature
      Pages Follow]


    
      
         

      

      
        3

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, Agent, Lenders and Borrower have caused this Limited Waiver
      to
      Loan and Security Agreement to be duly executed as of the day and year first
      above written.

     

    BORROWER:

     

    HINES
      NURSERIES, INC.

     

    By:/s/
      Claudia
      Pieropan                                      
                

    Title: CFO                                                            
                         

    Name: Claudia
      Pieropan                                   
             
    

    


    


    PARENT:

     

    HINES
      HORTICULTURE, INC.

     

    By:/s/
      Claudia
      Pieropan                                                 
  

    Title: CFO                                                                       
         

    Name: Claudia
      Pieropan                                              
     

    


    


    AGENT
      AND LENDERS:

    


    BANK
      OF
      AMERICA, N.A., as Agent and a Lender

    


    


    By:/s/
      Jason
      Riley                                                               


    Title: Vice
      President                                                           


    Name: Jason
      Riley                                                            
 

    


    


    PNC
      BANK,
      NATIONAL ASSOCIATION, as a Lender

    


    


    By:/s/
      Pete
      Martinez                                                           


    Title: Sr.
      Vice
      President                                                      


    Name: Pete
      Martinez                                                           


    


    


    GMAC
      COMMERCIAL FINANCE LLC, as a Lender

    


    


    By:/s/
      Robert
      Richardson                                                  


    Title: Director                                                                      
      

    Name: Robert
      Richardson                                                 

    
 

     

    S-1