Easy Gardener granted final approval of $33 million DIP

By Caroline Salls

Pittsburgh, May 16 - Easy Gardener Products, Ltd. obtained final approval of its $33 million in debtor-in-possession financing under an order filed with the U.S. Bankruptcy Court for the District of Delaware Tuesday.

The DIP is via LaSalle Business Credit, LLC, the lender under the company's existing senior secured revolving credit facility.

Proceeds will be used for ongoing operational needs during the bankruptcy case.

The maturity will be 150 days unless Easy Gardener completes a plan of reorganization or sells substantially all its assets earlier.

Interest on revolving loans will be Prime rate plus 75 basis points, and interest on overadvances will be an additional 200 bps.

Easy Gardener will pay a $150,000 closing fee, a $165,000 administrative fee, a $2,000 per month collateral management fee, a $750 per day audit fee and 400 bps letter-of-credit fee.

The existing senior secured revolving credit agreement will be amended to provide for an increase in the line of credit to $33 million from $25 million, subject to a customary borrowing base.

The amendment provides for up to $5 million of overadvance availability.

The company also amended its existing senior secured term debt agreement to modify and extend the provisions relating to the payment of a $2 million performance fee, which will now be payable in three installments of $100,000, $200,000 and $1.7 million.

The first installment will be payable upon entry of the final DIP order, the second installment will be payable June 30 and the third installment will be payable July 31.

If Easy Gardener pays the performance fee installments as they come due, and if its obligations to its senior secured term lender are paid in full before the due date of the second and third installments, the company will not be required to pay the remaining portion of the performance fee.

Easy Gardener said it expects that the proposed sale of the company will close before June 30, so it will not be required to pay $1.9 million of the $2.0 million performance fee.

Easy Gardener filed for Chapter 11 bankruptcy on May 10. The company is a Waco, Texas-based manufacturer and marketer of consumer lawn and garden products. Its Chapter 11 case number is 06-10396.

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