Document:

acu-ex1010j_439.htm

Ex 10.10(j)

NINTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT

This NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (the “Amendment”) is entered into as of November 8, 2022 between ACME UNITED CORPORATION, a Connecticut corporation (the “Borrower”) and HSBC BANK USA, NATIONAL ASSOCIATION (the “Lender”).

RECITALS

The Borrower and the Lender are parties to a Loan and Security Agreement dated as of April 5, 2012, as amended (collectively, the “Loan Agreement”). Capitalized terms used herein shall have the meanings given to them in the Loan Agreement unless otherwise specified.

The Borrower has requested that the Lender amend certain terms and conditions of the Loan Agreement, pursuant to the terms of this Amendment.

NOW, THEREFORE, in consideration of the promises, covenants and understandings set forth in this Amendment and the benefits to be received from the performance of such promises, covenants and understandings, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.Amendments to Loan Agreement. 

(a)Section 1.2 of the Loan Agreement is hereby amended by (i) deleting the definitions of “Base Rate Margin” and “SOFR Rate Margin” and (ii) inserting the defined term “Applicable Margin” in appropriate alphabetical order:

“Applicable Margin” shall mean the per annum rate shown in the applicable column below based on the applicable ratio of Funded Debt to EBITDA; provided that until the first (1st) Business Day following the date of delivery of the compliance certificate required to be delivered pursuant to Section 6.2(c) commencing with the compliance certificate to be delivered with respect to the fiscal quarter ending December 31, 2022, the Applicable Margin shall be equal to the applicable rate per annum set forth below in Pricing Tier I:

 

				
	
Pricing Tier
	
Ratio of Funded Debt to EBITDA
	
Applicable Margin for Base Rate Advances
	
Applicable Margin for SOFR Rate Advances

	
 
	
 
	
 
	
 

	
I
	
Greater than 5.35 to 1.00
	
0.50%
	
2.35%

	
 
	
 
	
 
	
 

	
II
	
Greater than 5.25 to 1.00 but less than or equal to 5.35 to 1.00
	
0.65%
	
2.25%

	
 
	
 
	
 
	
 

	
III
	
Greater than 4.50 to 1.00 but less than or equal to 5.25 to 1.00
	
0.75%
	
2.15%

472780/113 - 7675369.3

 

				
	
 
	
 
	
 
	
 

	
IV
	
Greater than 4.25 to 1.00 but less than or equal to 4.50 to 1.00
	
0.85%
	
2.00%

	
 
	
 
	
 
	
 

	
V
	
Greater than 3.25 to 1.00 but less than or equal to 4.25 to 1.00
	
1.00%
	
1.75%

	
 
	
 
	
 
	
 

	
VI
	
Less than or equal to 3.25 to 1.00
	
1.15%
	
1.60%

Thereafter, the determination of the Applicable Margin as of any date shall be determined by the Lender based on the ratio of Funded Debt to EBITDA as of the end of the most recently ended Fiscal Quarter for which a compliance certificate accompanying the financial statements of the Borrower has been delivered by the Borrower to the Lender pursuant to Section 6.2(b) and (c) and shall be effective for purposes of determining the Applicable Margin from and after the third (3rd) Business Day following the date the Lender receives such compliance certificate from the Borrower. Notwithstanding the foregoing, if the applicable compliance certificate and accompanying financial statements of the Borrower for any fiscal quarter are not delivered to the Lender when due in accordance with Section 6.2(b) and (c), then Pricing Tier I in the grid above shall apply during the period commencing on the first (1st) Business Day following the date such compliance certificate and accompanying financial statements were due and ending on the date on which compliance certificate and accompanying financial statements are delivered by the Borrower to the Lender.

If, as a result of any restatement of, or other adjustment to, the financial statements of the Borrower or for any other reason, Lender determines that (a) the ratio of Funded Debt to EBITDA as previously calculated as of any applicable date was inaccurate, and (b) a proper calculation of the ratio of Funded Debt to EBITDA would have resulted in different pricing for any period, then (i) if the proper calculation of the ratio of Funded Debt to EBITDA would have resulted in higher pricing for such period, Borrower shall automatically and retroactively be obligated to pay to the Lender, promptly upon demand by the Lender, an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period; provided, that non-payment as a result of such inaccuracy shall not in any event be deemed retroactively to be an Event of Default, and (ii) if the proper calculation of the ratio of Funded Debt to EBITDA would have resulted in lower pricing for such period, the Lender shall have no obligation to repay interest or fees to Borrower; provided, that, if as a result of any restatement or other event a proper calculation of the ratio of Funded Debt to EBITDA would have resulted in higher pricing for one or more periods and lower pricing for one or more other periods (due to the shifting of income or expenses from one period to another period or any similar reason), then the amount payable by the Borrower pursuant to clause (i) above shall be based upon the excess, if any, of the amount of 

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interest and fees that should have been paid for all applicable periods in the aggregate over the amounts of interest and fees actually paid for such periods in the aggregate.

(b)The first sentence of Section 2.3(b) of the Loan Agreement is hereby amended to read in its entirety as set forth below:

“Each Advance shall bear interest on the outstanding principal amount thereof from the date when made, continued or converted until paid in full at a rate per annum equal to (i) for Base Rate Advances, the Base Rate minus the Applicable Margin for Base Rate Advances and (ii) for SOFR Rate Advances, Adjusted Term SOFR plus the Applicable Margin for SOFR Rate Advances.”  

(c)Section 6.7(a) of the Loan Agreement is hereby amended, effective as of September 30, 2022, to read in its entirety as set forth below:

“(a)Funded Debt/EBITDA.  Measured as of the end of each fiscal quarter, a ratio of Funded Debt to EBITDA for the four (4) fiscal quarter period then-ended, of not more than the ratio set forth below for such fiscal quarter

		
	
Fiscal Quarter Ending
	
Funded Debt/EBITDA

	
June 30, 2022
	
4.25 to 1.00

	
September 30, 2022
	
5.35 to 1.00

	
December 31, 2022
	
5.75 to 1.00

	
March 31, 2023
	
5.25 to 1.00

	
June 30, 2023
	
4.75 to 1.00

	
Fiscal quarters ending September 30, 2023 and December 31, 2023
	
4.25 to 1.00

	
Fiscal quarter ending March 31, 2024 and each fiscal quarter ending thereafter
	
4.00 to 1.00

 

2.No Other Changes. Except as explicitly amended by this Amendment, all of the terms and conditions of the Loan Agreement shall remain in full force and effect.

3.Conditions Precedent. This Amendment shall be effective (the “Ninth Amendment Closing Date”) when the Lender shall have received a copy hereof executed by the Borrower.

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4.Representations and Warranties. The Borrower hereby represents and warrants to the Lender as follows:

(a)The Borrower has all requisite power and authority to execute this Amendment and to perform all of the obligations hereunder and thereunder, and this Amendment has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms.

(b)The execution, delivery and performance by the Borrower of this Amendment has been duly authorized by all necessary corporate action and does not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to the Borrower, or the articles of incorporation or by-laws of the Borrower, or (iii) result in a breach of or constitute a default under any indenture or loan or loan agreement or any other agreement, lease or instrument to which the Borrower is a party or by which it or its properties may be bound or affected.

(c)All of the representations and warranties contained in Section 5 of the Loan Agreement are correct on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date.

(d)No Default or Event of Default has occurred and is continuing or will result from Borrower entering into this Amendment.

5.References. All references in the Loan Agreement to “this Agreement” shall be deemed to refer to the Loan Agreement as amended hereby; and any and all references in the Loan Documents to the Loan Agreement shall be deemed to refer to the Loan Agreement as amended hereby.

6.No Other Waiver. The execution of this Amendment and acceptance of any documents related hereto shall not be deemed to be a waiver of any Default or Event of Default under the Loan Agreement, or breach, default or event of default under any Loan Documents or other document held by the Lender, whether or not known to the Lender and whether or not existing on the date of this Amendment.

7.Costs and Expenses. The Borrower hereby reaffirms its agreement under the Loan Agreement to pay or reimburse the Lender on demand for all reasonable costs and expenses incurred by the Lender in connection with the Loan Documents, including without limitation all reasonable fees and disbursements of legal counsel. Without limiting the generality of the foregoing, the Borrower specifically agrees to pay all reasonable fees and disbursements of counsel to the Lender for the services performed by such counsel in connection with the preparation of this Amendment and the documents and instruments incidental hereto.  

8.Miscellaneous. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts, taken together, shall constitute one and the same instrument.

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9.Reaffirmation.  The Borrower as debtor, grantor, pledgor, assignor, or in any other similar capacity in which the Borrower grants liens or security interests in its property hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under the Loan Agreement and each of the other Loan Documents to which it is a party (after giving effect hereto) and (ii) ratifies and reaffirms the liens on or security interests in any of its property granted pursuant to the Loan Agreement and any such other Loan Document as security for the Obligations under or with respect to the Loan Agreement or the other Loan Documents, and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby.  The Borrower acknowledges that the Loan Agreement and each of the other Loan Documents remains in full force and effect and are hereby ratified and reaffirmed.  The execution of this Amendment shall not operate as a waiver of any right, power or remedy of the Lender (except as expressly provided for herein), constitute a waiver of any provision of any of the Loan Agreement or any of the other Loan Documents (except as expressly provided for herein) or serve to effect a novation of the Obligations.

10.Release.  

(a)Borrower hereby releases and forever discharges Lender and its parents, subsidiaries and affiliates, past or present, and each of them, as well as their respective directors, officers, agents, servants, employees, shareholders, representatives, attorneys, administrators, executors, heirs, assigns, predecessors and successors in interest, and all other persons, firms or corporations with whom any of the former have been, are now, or may hereafter be affiliated, and each of them (collectively, the “Releasees”), from and against any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action in law or equity, obligations, controversies, debts, costs, expenses, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether known or unknown, fixed or contingent, suspected or unsuspected by Borrower, and whether concealed or hidden (collectively, “Claims”), which Borrower now owns or holds or has at any time heretofore owned or held, which are based upon or arise out of or in connection with any matter, cause or thing existing at any time prior to the date hereof or anything done, omitted or suffered to be done or omitted at any time prior to the date hereof in connection with the Loan Agreement or the other Loan Documents (collectively the “Released Matters”).

(b)Borrower represents, warrants and agrees, that in executing and entering into this release, it is not relying and have not relied upon any representation, promise or statement made by anyone which is not recited, contained or embodied in this Amendment, the Loan Agreement or the other Loan Documents.  Borrower has reviewed this release with Borrower’s legal counsel, and understands and acknowledges the significance and consequence of this release and of the specific waiver thereof contained herein.  Borrower understands and expressly assumes the risk that any fact not recited, contained or embodied therein may turn out hereafter to be other than, different from, or contrary to the facts now known to Borrower or believed by Borrower to be true.  Nevertheless, Borrower intends by this release to release fully, finally and forever all Released Matters and agrees that this release shall be effective in all respects notwithstanding any such difference in facts, and shall not be subject to termination, modification or rescission by reason of any such difference in facts.

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(c)Borrower, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claims released, remised and discharged by Borrower pursuant to this Section 11.  If Borrower violates the foregoing covenant, Borrower agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation.

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.

		
	
 
	
 

	
HSBC BANK USA, NATIONAL ASSOCIATION
	
ACME UNITED CORPORATION

	
 
	
 

	
 
	
 

	
By:__/s/  David M. Nackley_____________
	
By:_/s/ Paul Driscoll_______________

	
Name: David M. Nackley
	
Name: Paul Driscoll

	
Title Sr. Vice President
	
Title Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO NINTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT]jpm_hydrofarm-thirdamend

Execution Version      THIRD AMENDMENT AND JOINDER TO CREDIT AGREEMENT    THIS THIRD AMENDMENT AND JOINDER TO CREDIT AGREEMENT (this  “Amendment”), dated as of August 23, 2022, 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”), AURORA  INNOVATIONS, LLC, an Oregon limited liability company (“Aurora Innovations”, and together with the  Company, HYD, F16 and Aurora, each individually, an “Existing Borrower”, and individually and  collectively, jointly and severally, the “Existing Borrowers”), INNOVATIVE GROWERS EQUIPMENT,  INC., an Illinois corporation, (“IGE”), MANUFACTURING & SUPPLY CHAIN SERVICES, INC., a  Delaware corporation (“MSCSI” and together with IGE, each individually, a “New Borrower”, and  individually and collectively, jointly and severally, the “New Borrowers”; the New Borrowers, the Existing  Borrowers, 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”), GOTHAM PROPERTIES  LLC, an Oregon limited liability company (“Gotham”), AURORA INTERNATIONAL, LLC, an Oregon  limited liability company (“Aurora International”), AURORA PEAT 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” and together with  HIC, HHL, EHH, Sunblaster, HCL, SUN, EDDI, H&G Holdings, Gotham, Aurora International and APP,  each individually, an “Existing Loan Guarantor”, and individually and collectively, jointly and severally,  the “Existing Loan Guarantors”), 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 Innovative AG, Innovative  Racking and Innovating Shipping, each individually, a “New Loan Guarantor”, and individually and  collectively, jointly and severally, the “New Loan Guarantors”; the New Loan Guarantors, the Existing  Loan Guarantors, 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 and (iii) 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  

 

 2  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.  Capitalized terms used herein without  being defined herein shall have the meanings ascribed to such terms in the Credit Agreement.  B. Each New Borrower and each New Loan Guarantor is required to become a Borrower, a  Loan Guarantor, a Loan Party and a Canadian Loan Party, as applicable, pursuant to the terms of Section  5.14 of the Credit Agreement.  C. The Loan Parties have requested that the Administrative Agent and the Lenders (1) join  each New Borrower and New Loan Guarantor as a Borrower, a Loan Guarantor, a Loan Party and/or a  Canadian Loan Party, as applicable, under the Credit Agreement and the other Loan Documents, and (2)  make certain other amendments to the Credit Agreement, and the Administrative Agent and the Lenders  are willing to make such joinders and amendments, in each case subject to and pursuant to the terms and  conditions set forth herein.  D. 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. Amendments to Credit Agreement.  Subject to the satisfaction in full of the conditions  precedent set forth in Section 2 hereof, effective as of the Effective Date (as defined below), the Credit  Agreement is hereby amended as follows:  a. The following definitions are hereby added to Section 1.01 of the Credit  Agreement in the appropriate alphabetical order:  “ “IGE” means Innovative Growers Equipment, Inc., an Illinois corporation.”  “ “Innovative AG” means Innovative AG Installation, Inc., an Illinois  corporation.”  “ “Innovative Canada” means Innovative Growers Equipment Canada, Inc., a  corporation incorporated under the laws of the Province of Ontario.”  “ “Innovative Racking” means Innovative Racking Systems, Inc., an Illinois  corporation.”  “ “Innovative Shipping” means Innovative Shipping Solutions, Inc., an Illinois  corporation”    

 

 3  “ “MSCSI” means Manufacturing & Supply Chain Services, Inc., a Delaware  corporation.”  “ “Third Amendment” means that certain Third Amendment and Joinder to the  Credit Agreement, dated as of the Third Amendment Effective Date, by and  between the Loan Parties, the Administrative Agent, and the Lenders party  thereto.”  “ “Third Amendment Effective Date” means August 23, 2022.”  b. The definition of “Canadian Loan Parties” set forth in Section 1.01 of the Credit  Agreement is hereby amended and restated in its entirety to read as follows:  “ “Canadian Loan Parties” means, collectively, SUN, EDD, APP, GPP, Innovative  Canada and any other Person organized under applicable law of Canada or any  province of Canada who becomes a party to this Agreement pursuant to a Joinder  Agreement and their successors and assigns, and the term “Canadian Loan Party”  mean any one of them or all of them individually, as the context may require.”  c. The definition of “Canadian Opcos” set forth in Section 1.01 of the Credit  Agreement is hereby amended and restated in its entirety to read as follows:  “ “Canadian Opcos” means, collectively, SUN, EDD, APP, GPP and Innovative  Canada.”  d. Each New Borrower and each New Loan Guarantor hereby acknowledges, agrees  and confirms that, by its execution of this Amendment, such New Borrower and such New Loan  Guarantor, as applicable, will be deemed to be a Borrower, Loan Guarantor, Canadian Guarantor,  Loan Party and/or Canadian Loan Party, as the case may be, under the Credit Agreement and other  Loan Documents for all purposes of the Credit Agreement and the other Loan Documents, and shall  have all of the obligations of a Borrower, Loan Guarantor, Canadian Guarantor, Loan Party and/or  Canadian Loan Party, as the case may be, under the Credit Agreement and the other Loan  Documents as if it had executed the Credit Agreement and the other Loan Documents.  Each New  Borrower and each New Loan Guarantor hereby ratifies, as of the date hereof, and agrees to be  bound by, all of the terms, provisions and conditions contained in the Credit Agreement and the  other Loan Documents applicable to it, including without limitation (a) all of the representations  and warranties of the Loan Parties set forth in Article III of the Credit Agreement, (b) all of the  covenants set forth in Articles V and VI of the Credit Agreement, and (c) all of the guaranty  obligations set forth in Article X of the Credit Agreement.  Without limiting the generality of the  foregoing terms of this paragraph, each New Borrower and each New Loan Guarantor, subject to  the limitations set forth in Sections 10.10 and 10.13 of the Credit Agreement, hereby guarantees,  jointly and severally with the other Loan Guarantors, to the Administrative Agent and the Lenders,  as provided in Article X of the Credit Agreement, the prompt payment and performance of the  Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment,  by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of  the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity,  as a mandatory prepayment, by acceleration or otherwise), the New Borrowers and the New Loan  Guarantors will, jointly and severally together with the other Loan Guarantors, promptly pay and  perform the same, without any demand or notice whatsoever, and that in the case of any extension  of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly  paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration  

 

 4  or otherwise) in accordance with the terms of such extension or renewal.  Each New Borrower and  each New Loan Guarantor waives acceptance by the Administrative Agent and the Lenders of the  guaranty by such New Borrower and such New Loan Guarantor upon the execution of this  Amendment.  Furthermore, each New Borrower and each New Loan Guarantor agrees that its  address for purposes of Section 9.01 of the Credit Agreement is the address of the Borrower  Representative set forth therein.     2. 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 Lender shall have duly executed and delivered this Amendment, and the  Administrative Agent shall have received a fully executed counterpart hereof.  b. Joinders and Amendments.  Administrative Agent shall have received (i) a joinder  to the U.S. Security Agreement duly executed and delivered by the New Borrowers and New Loan  Guarantors (other than Innovative Canada), (ii) an amendment to the U.S. Security Agreement duly  executed and delivered by the applicable Loan Parties (other than APP and GPP), (iii) a joinder to  the Canadian Security Agreement duly executed and delivered by Innovative Canada, and (iv) a  joinder to the Canadian Guarantee duly executed and delivered by Innovative Canada.  c. 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).  d. Secretary’s Certificate.  The Administrative Agent shall have received (i) a  certificate of each New Borrower and each New Loan Guarantor, dated the date hereof and  executed by its Secretary, Assistant Secretary or other Responsible Officer, which shall (A) certify  the resolutions of its Board of Directors, members or other body authorizing the execution, delivery  and performance of this Amendment and the other Loan Documents, as amended by this  Amendment, to which it is a party, (B) identify by name and title and bear the signatures of the  officers of such New Borrower or New Loan Guarantor, as applicable, authorized to sign this  Amendment and the other Loan Documents to which it is a party and, in the case of each New  Borrower, its Financial Officers, (C) contain appropriate attachments, including the certificate,  constitution or articles of incorporation or organization of each New Borrower and each New Loan  Guarantor certified by the relevant authority of the jurisdiction of organization or incorporation of  such New Borrower or New Loan Guarantor, as applicable, and a true and correct copy of its  memorandum and articles of association, bylaws, constitution or operating, management or  partnership agreement, or other organizational or governing documents, and (ii) a good standing  certificate for each New Borrower and New Loan Guarantor from its jurisdiction of organization  or the substantive equivalent available in the jurisdiction of organization for each New Borrower  and New Loan Guarantor from the appropriate governmental officer in such jurisdiction.  e. Legal Opinions.  Each Loan Party shall have delivered a written opinion of each  Loan Party’s counsel, addressed to the Administrative Agent, Issuing Bank, the Lenders and the  

 

 5  other Secured Parties, each in form and substance satisfactory to the Administrative Agent and its  counsel.  f. Funding Accounts.  The Administrative Agent shall have received a notice setting  forth the Funding Accounts to which the Administrative Agent is authorized by the New Borrowers  to transfer the proceeds of any Borrowings requested or authorized pursuant to the Credit  Agreement.  g. Insurance.  The Administrative Agent shall have received evidence of liability and  property insurance coverage in form, scope, and substance reasonably satisfactory to the  Administrative Agent, in compliance with the terms of the Credit Agreement and the other Loan  Documents.  h. Filings, Registrations and Recordings.  Each document (including any Uniform  Commercial Code financing statements and/or PPSA registrations) required by the Collateral  Documents or under law or reasonably requested by the Administrative Agent to be filed, registered  or recorded in order to create in favor of the Administrative Agent, for the benefit of itself, the  Lenders and the other Secured Parties, a perfected Lien on the Collateral of the New Borrowers  and the New Loan Guarantors described therein, prior and superior in right to any other Person  (other than with respect to Liens expressly permitted by Section 6.02 of the Credit Agreement),  shall be in proper form for filing, registration or recordation, and shall have been filed, registered,  or recorded.  i. Tax Withholding.  The Administrative Agent shall have received a properly  completed and signed IRS Form W-8 or W-9, as applicable, for each New Borrower and each New  Loan Guarantor.  j. Lien Searches.  The Administrative Agent shall have received the results of a  recent lien search in each jurisdiction where the New Borrowers and the New Loan Guarantors are  organized and where the assets of such New Borrowers and New Loan Guarantors are located, and  such search shall reveal no Liens on any of the assets of such New Loan Parties except for Liens  permitted by Section 6.02 of the Credit Agreement or discharged on or prior to the date hereof (or  as otherwise required pursuant to Section 4 of this Amendment) pursuant to a pay-off letter or other  documentation satisfactory to the Administrative Agent.  k. USA PATRIOT Act, etc.  (i) The Administrative Agent and the Lenders shall have  received all documentation and other information regarding the New Borrowers and the New Loan  Guarantors requested in connection with applicable “know your customer” and anti-money  laundering rules and regulations, including the USA PATRIOT Act and the Canadian Anti-Money  Laundering & Anti-Terrorism Legislation, for each New Borrower and New Loan Guarantor, and  (ii) to the extent any New Borrower qualifies as a “legal entity customer” under the Beneficial  Ownership Regulation, at least five (5) days prior to the Effective Date, any Lender that has  requested, in a written notice to the Borrowers at least ten (10) days prior to the Effective Date, a  Beneficial Ownership Certification in relation to each New Borrower shall have received such  Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender  of its signature page to this Agreement, the condition set forth in this clause (ii) shall be deemed to  be satisfied).  l. Corporate Structure.  The corporate structure, capital structure and other material  debt instruments, material accounts and governing documents of the Loan Parties and their  Affiliates shall be reasonably acceptable to the Administrative Agent in its Permitted Discretion.  

 

 6  m. 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.  n. Designated Authority. The Administrate Agent shall have received an updated  Appointment of Designated Authority, in form and substance satisfactory to Administrative Agent.   o. 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.  3. 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.  4. 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.  5. 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  

 

 7  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.  6. 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.  7. 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.   8. 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  

 

 8  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.  9. 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.  10. 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.  11. 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.  12. 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 PAGE LEFT INTENTIONALLY BLANK; SIGNATURE PAGES FOLLOW.]  

 

[Third Amendment and Joinder to Credit Agreement]  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.  EXISTING BORROWERS:  HYDROFARM HOLDINGS GROUP, INC.,   a Delaware corporation        By:                            /s/ B. John Lindeman                              Name: B. John Lindeman  Title: Chief Financial Officer  HYDROFARM, LLC,   a California limited liability company        By:                            /s/ B. John Lindeman                              Name: B. John Lindeman  Title: Chief Financial Officer  FIELD 16, LLC,  a Delaware limited liability company        By:                            /s/ B. John Lindeman                                Name: B. John Lindeman  Title: Chief Financial Officer   AURORA INNOVATIONS, LLC,  an Oregon limited liability company        By:                            /s/ B. John Lindeman                          Name: B. John Lindeman  Title: Chief Financial Officer  

 

[Third Amendment and Joinder to Credit Agreement]  EXISTING LOAN GUARANTORS:  HYDROFARM INVESTMENT CORP.,   a Delaware corporation        By:                            /s/ B. John Lindeman                              Name: B. John Lindeman  Title: Chief Financial Officer  HYDROFARM HOLDINGS LLC,   a Delaware limited liability company        By:                            /s/ B. John Lindeman                              Name: B. John Lindeman  Title: Chief Financial Officer  EHH HOLDINGS, LLC,   a Delaware limited liability company        By:                            /s/ B. John Lindeman                              Name: B. John Lindeman  Title: Chief Financial Officer  SUNBLASTER LLC,   a Delaware limited liability company        By:                            /s/ B. John Lindeman                              Name: B. John Lindeman  Title: Chief Financial Officer  HYDROFARM CANADA, LLC,   a Delaware limited liability company        By:                            /s/ B. John Lindeman                              Name: B. John Lindeman  Title: Chief Financial Officer  

 

[Third Amendment and Joinder to Credit Agreement]  EXISTING LOAN GUARANTORS (CONT’D):  SUNBLASTER HOLDINGS ULC,   an unlimited liability corporation existing under the laws  of the Province of British Columbia        By:                            /s/ Jeffrey Peterson                              Name: Jeffrey Peterson   Title: Director   EDDI’S WHOLESALE GARDEN SUPPLIES LTD.,   a corporation organized under the laws of the province  of British Columbia        By:                            /s/ William Toler                                 Name: William Toler   Title: President   HOUSE & GARDEN HOLDINGS, LLC,  a Delaware limited liability company        By:                            /s/ B. John Lindeman                              Name: B. John Lindeman  Title: Chief Financial Officer  GOTHAM PROPERTIES LLC,  an Oregon limited liability company        By:                            /s/ B. John Lindeman                              Name: B. John Lindeman  Title: Chief Financial Officer  AURORA INTERNATIONAL, LLC,  an Oregon limited liability company        By:                            /s/ B. John Lindeman                              Name: B. John Lindeman  Title: Chief Financial Officer     

 

[Third Amendment and Joinder to Credit Agreement]      AURORA PEAT PRODUCTS ULC,  an unlimited liability corporation existing under the laws  of the Province of Alberta        By:                            /s/ William Toler                                 Name: William Toler   Title: President   GREENSTAR PLANT PRODUCTS INC.,  a federal corporation organized under the laws of  Canada        By:                            /s/ William Toler                                 Name: William Toler   Title: Director       

 

[Third Amendment and Joinder to Credit Agreement]  NEW BORROWERS:    INNOVATIVE GROWERS EQUIPMENT, INC.,  an Illinois corporation        By:                            /s/ B. John Lindeman                                Name: B. John Lindeman  Title: Chief Financial Officer     MANUFACTURING & SUPPLY CHAIN  SERVICES, INC.,  a Delaware corporation         By:                            /s/ B. John Lindeman                                Name: B. John Lindeman   Title: Chief Financial Officer     

 

[Third Amendment and Joinder to Credit Agreement]  NEW LOAN GUARANTORS:  INNOVATIVE AG INSTALLATION, INC.,  an Illinois corporation        By:                            /s/ B. John Lindeman                               Name: B. John Lindeman  Title: Chief Financial Officer  INNOVATIVE RACKING SYSTEMS, INC.,  an Illinois corporation        By:                            /s/ B. John Lindeman                               Name: B. John Lindeman  Title: Chief Financial Officer   INNOVATIVE SHIPPING SOLUTIONS, INC.,  an Illinois corporation        By:                            /s/ B. John Lindeman                               Name: B. John Lindeman  Title: Chief Financial Officer     INNOVATIVE GROWERS EQUIPMENT  CANADA, INC.,   a corporation incorporated under the laws of Ontario,  Canada        By:                            /s/ Jonathan C. Himelfarb                                Name: Jonathan C. Himelfarb   Title: Chief Operating Officer     

 

[Third Amendment and Joinder to Credit Agreement]  JPMORGAN CHASE BANK, N.A., as a Lender,  Administrative Agent, Issuing Bank and Swingline  Lender        By:                            /s/ Hashim Kamal                                 Name: Hashim Kamal   Title: Authorized Signer   

 

  JPMORGAN CHASE BANK, N.A., Toronto Branch        By:                            /s/ Laila Sultana                                    Name: Laila Sultana   Title: Authorized Officer

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