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EXHIBIT 4b
SECOND AMENDMENT TO MORTGAGE-BACKED CREDIT AGREEMENT
This Second Amendment to Mortgage-Backed Credit Agreement dated as of
July 25, 1997 by and between GENERAL HOST CORPORATION, a New York corporation
and FRANK'S NURSERY & CRAFTS, INC. (collectively, "Borrowers"), and COMERICA
BANK, a Michigan banking corporation ("Bank").
WHEREAS, Borrowers and Bank entered into a certain Mortgage-Backed
Credit Agreement dated as of November 29, 1996 and an amendment thereto dated
as of June 13, 1997 (as so amended, the "Agreement"), pursuant to which
Borrowers incurred certain indebtedness and obligations and granted the Bank
certain security for such indebtedness and obligations; and
WHEREAS, Borrowers and Bank desire to amend certain provisions of the
Agreement on the terms and conditions hereof;
NOW, THEREFORE, it is agreed:
A, DEFINITIONS
1. Capitalized terms used herein and not defined to the contrary
have the meanings given them in the Agreement.
B. AMENDMENTS TO AGREEMENT
1. Section 1.2 of the Agreement is hereby amended and restated as
follows:
"1.2 'Applicable Interest Rate' shall mean: (a) until July 25,
1997, the Eurodollar-based Rate or the Prime-based Rate, as selected by
a Borrower from time-to-time or otherwise determined pursuant to the
terms of this Agreement, and (b) thereafter, the Prime-based Rate."
2. Section 1.11 of the Agreement is hereby amended and restated
as follows:
"1.11 'Collateral Pool' shall mean the Real Property (i) for
which Bank has received Mortgages/Deeds of Trust, Title Insurance,
Insurance Policies, Surveys, Appraisals and Environmental Reports, and
(ii) which has not been released from the lien of the relevant
Mortgage/Deed of Trust pursuant to Section 11.4 hereof."
3. Section 1.34 of the Agreement is hereby amended and restated as
follows:
"1.34 'Letter of Credit Maximum' shall mean, as of any date: (a)
with respect to Letters of Credit generally, the Maximum Amount from
time to time in effect minus the aggregrate principal amount of
outstanding Advances; and (b)
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with respect to Letters of Credit which are standby letters of Credit,
Ten Million Dollars ($10,000,000)."
4. Section 1.37 of the Agreement is hereby amended and restated as
follows:
"1.37 'Maximum Amount' shall mean Thirty Five Million Dollars
($35,000,000) or such lesser amount to which the Maximum Amount has then
been reduced to pursuant to Section 4.5 hereof."
5. The following Section 1.44a is hereby added to the Agreement
immediately after Section 1.44:
" 1.44a 'Release Reduction Amount' shall, in connection
with the release of any Mortgage pursuant to Section 11.4 hereof, mean:
(a) in the case of a release or discharge of a Mortgage upon any Real
Estate identified on Exhibit "E" hereto in connection with a sale-lease
back transaction or mortgage refinancing of such Real Estate by
Borrowers, fifty percent (50 %) of the proceeds of such sale-lease back
or refinancing, net of fees, commissions and other direct expenses paid
by Borrowers in connection with such transaction, and (b) in the case of
any other release or discharge of a Mortgage, the greater of the
appraised value of the Real Estate for which such release is required or
one hundred percent (100%) of the proceeds of the transaction for which
such release is requested, net of fees, expenses, commissions and other
direct expenses of such transaction paid by Borrowers.'
6. Exhibit "E" is hereby added to the Agreement as Exhibit "E" to
the Agreement.
7. Section 1.46 of the Agreement is hereby amended and restated as
follows:
" 1.46 'Revolving Credit Facility Fee' shall mean the facility
fee payable to Bank pursuant to Section 2.4 hereof, in an amount equal to
three-quarters (3/4%) per annum multiplied by the Revolving Credit
Maximum from time to time in effect."
8. Section 1.47 of the Agreement is hereby amended and restated as
follows:
"1.47 'Revolving Credit Maturity Date' shall mean December 31,
1997."
9. Section 1.48 of the Agreement is hereby amended and related to
read:
"l.48 'Revolving Credit Maximum' shall mean, as of any date,
Twenty Million Dollars ($20,000,000) or such lesser amount to which the
Revolving Credit Maximum has then been reduced to pursuant to Section
4.5 hereof."
10. The second sentence of Section 2.5 of the Agreement is hereby
amended to read:
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"Thereafter, Advances shall be available to satisfy Borrower's
working capital needs as and when such working capital needs arise."
11. The second sentence of Section 3.1 of the Agreement is hereby
amended and restated as follows:
"Notwithstanding anything to the contrary herein: (a) Letters of
Credit which are standby letters of credit may not be requested
hereunder after July 25, 1997; and (b) each Letter of Credit shall
provide that it is available by drafts drawn at sight and/or
presentation of documents and shall have an initial expiration date (i)
not later than one (1) year from the date of its issuance, and (ii) in
the case of any Letter of Credit which is not a standby letter of
credit, not later than the Revolving Credit Maturity Date."
12. Section 3.3 of the Agreement is hereby amended and restated as
follows:
"3.3 Letter of Credit Fees. Borrowers jointly and severally
agree to pay Letter of Credit Fees to Bank (i) upon the date of
issuance, in the case of Letters of Credit that are trade letters of
credit, in an amount equal to two and one-half percent (2.5 %) on the
face amount of such Letters of Credit, and (ii) with respect to Letters
of Credit which are standby letters of credit, quarterly in arrears, an
amount equal to two and one-half percent (2.5 %) per annum multiplied by
the average outstanding face amounts of such Letters of Credit
outstanding during the quarterly period then ended."
13. Section 4.5 of the Agreement is hereby amended and restated as
follows:
"4.5 Reductions or Terminations of Commitments.
"(a) Scheduled Reductions. The Maximum Amount and the Revolving
Credit Maximum then in effect shall each be reduced (i)
by the amount of Five Million Dollars ($5,000,000) on
December 15, 1997, (ii) by the amount of Five Million,
Dollars ($5,000,000) on December 22, 1997, (iii) by the
amount of Six Million Dollars ($6,000,000) on December 29,
1997, and (iv) to Zero Dollars ($0) on the Revolving
Credit Maturity Date.
"(b) Mandatory Reductions upon Releases. Upon each release of a
Mortgage pursuant to Section 11.4 hereof the Maximum Amount
and the Revolving Credit Maximum shall each be reduced by
the Release Reduction Amount for the relevant Real
Property.
"(c) Discretionary Reductions. Upon five (5) Business Days prior
written notice to Bank, the Borrowers may permanently
reduce the Maximum Amount and/or Revolving Credit Maximum,
in whole or part, provided that each partial reduction of
the Maximum
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Amount and/or Revolving Credit Maximum shall be in an amount
equal to One Million Dollars ($1,000,000).
"(d) Requirements for all Reductions. Upon each reduction in the
Maximum Amount and/or Revolving Credit Maximum under this
Section 4.5:
"(i) in the case of a reduction of the Revolving Credit
Maximum Borrowers shall, on the date of such reduction,
pay to Bank, (x) the Revolving Credit Facility Fee
accrued on the amount of the Revolving Credit Maximum so
reduced through the date of such reduction and (y) the
amount (if any) by which the sum of Advances then
outstanding plus the amount of outstanding face amounts
Letters of Credit which are standby letters of credit
would exceed the Revolving Credit Maximum (as so reduced)
together with accrued interest thereon, and
" (ii) in the case of a reduction of the Maximum Amount, the
Borrowers shall deliver to Bank, as collateral for the
Borrowers' indebtedness and obligations hereunder (and
hereby grants and assigns to Bank a security interest
therein) cash and/or cash equivalents in amounts equal to
the amount by which the aggregate undrawn face amount
of Letters of Credit outstanding as of the date of such
reduction exceeds the Maximum Amount as so reduced."
14. Section 9.4 of the Agreement is hereby amended and restated as
follows:
"9.4 Financial Covenants. Borrowers will not permit:
"(a) the Fixed Charge Coverage Ratio to be less than:
"(i) 1.45 to 1.0, as of the last day of the Borrowers'
fiscal quarter ending in August 1997, and
"(ii) 1.50 to 1.0, as of the last day of any subsequent
fiscal quarter.
"(b) the Debt to Capitalization Ratio, as of the last day of any
fiscal quarter, to be greater than seventy five percent (75 %).
"(c) Tangible Net Worth to be less than:
"(i) Eighty Six Million Dollars ($86,000,000) as of the
last day of the Borrowers' fiscal quarter ending in
August 1997;
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"(ii) Seventy Three Million Dollars ($73,000,000) as of the
last day of any subsequent fiscal quarter."
"(d) EBITDA, as of the last day of any fiscal quarter, to be less
than Thirty Million Dollars ($30,000,000)."
15. Section 11.4 of the Agreement is hereby amended and restated as
follows:
"11.4 Releases of Real Property. Provided that, upon such release and
after giving effect thereto, (i) no Default or Event of Default exists or
will exist, (ii) the Collateral Amount for Real Property remaining in the
Collateral Pool will not be less than the greater of the Maximum Amount (as
reduced in connection with such release pursuant to Section 4.5 hereof) or
the aggregate outstanding amount of all Advances and Letters of Credit, and
(iii) the aggregate outstanding amount of Advances and Letters of Credit
which are standby letters of credit will not exceed the Revolving Credit
Maximum (as reduced in connection with such release pursuant to Section 4.5
hereof), Bank shall release Real Estate from its Mortgage upon the
consummation by Borrowers of a sale leaseback transaction or mortgage
refinancing involving such Real Property provided that, simultaneously with
such release, the requirements of Section 4.5 of this Agreement are
complied with."
C. REPRESENTATIONS
Borrowers hereby represent and warrant that:
1. Execution, delivery and performance of this Amendment and any other
documents and instruments required under this Amendment or the Agreement are
within their respective corporate powers, have been duly authorized, are not in
contravention of law or the terms of their respective Articles of Incorporation
or Bylaws, and do not require the consent or approval of any governmental body,
agency, or authority.
2. This Amendment, and the Agreement as amended by this Amendment, and
any other documents and instruments required under this Amendment or the
Agreement, when issued and delivered under this Amendment or the Agreement,
will be valid and binding in accordance with their terms.
3. The continuing representations and warranties of the Borrowers set
forth in Sections 7.1 through 7.6 and 7.8 through 7.13 of the Agreement
are true and correct on and as of the date hereof with the same force and
effect as made on and as of the date hereof.
4. The continuing representations and warranties of the Borrowers set
forth in Section 7.7 of the Agreement are true and correct as of the date
hereof with respect to the most recent financial statements furnished to Bank
in accordance with Section 8.1 of the Agreement.
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5. No Event of Default, or condition or event which, with the
giving of notice or the running of time, or both, would constitute an Event of
Default under the Agreement, has occurred and is continuing as of the date
hereof.
D. MISCELLANEOUS
1. This Amendment may be executed in as many counterparts as Bank
and the Borrowers deem convenient and shall become effective upon: (a) delivery
to Bank of all executed counterparts hereof; and (b) delivery to Bank, in form
and substance satisfactory to Bank of each of the documents and instruments
listed on the Checklist attached as Exhibit "A" hereto.
2. Borrowers and Bank acknowledge and agree that: (a) except as
specifically amended hereby, all of the terms and conditions of the Agreement
and the Documents, remain in full force and effect in accordance with their
original terms; (b) the Agreement (as amended by this Amendment) and the other
Documents constitute a complete integration of the terms and conditions with
respect to the extensions of credit by Bank to Borrowers and the other
transactions described therein; and (c) no amendment to or deviation from the
terms and conditions set forth in the Agreement (as amended by this Amendment)
and Documents shall be effective or binding upon Bank unless set forth in a
duly executed writing signed on behalf of the Borrowers and Bank.
3. Borrowers shall pay all of Bank's legal costs and expenses
(including attorneys' fees and expenses) incurred in the negotiation,
preparation and closing hereof, including, without limitation, costs of all
lien searches and financing statement filings.
4. Except as specifically set forth herein, nothing set forth in
this Amendment shall constitute, or be interpreted or construed to constitute,
a waiver of any right or remedy of Bank, or of any default or Event of Default
whether now existing or hereafter arising.
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WITNESS the due execution hereof as of the day and year first
above written.
GENERAL HOST CORPORATION COMERICA BANK
By: Xxxxxx X. Xxxxxxx, Xx. By: Xxxxx Xxxxxxxxxxxx
------------------------ ------------------------
Xxxxxx X. Xxxxxxx, Xx. Xxxxx Xxxxxxxxxxxx
Its: Vice President Its: Vice President
0 Xxxxxxx Xxxxx 000 Xxxxxxxx Xxxxxx, X.X. 3280
Xxxxxxxx, Xxxxxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telefax: (000) 000-0000 Telefax: (000) 000-0000
FRANK'S NURSERY & CRAFTS, INC.
By: Xxxxxx X. Xxxxxxx, Xx.
-----------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its: Vice President
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
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EXHIBIT "A"
SECOND AMENDMENT TO
MORTGAGE-BACKED CREDIT AGREEMENT
BETWEEN GENERAL HOST CORPORATION AND
FRANK'S NURSERY & CRAFTS, INC. AND
COMERICA BANK
July _, 1997
1. Recertification of Authority Documents
a. General Host Corporation
x. Xxxxx'x Nursery & Crafts, Inc.
2. Second Amendment to Mortgage-Backed Credit Agreement
a. Exhibit "A" - Checklist
b. Exhibit "E" - Specified Real Estate
3. Acknowledgement and Consents
a. General Host Holding Corp.
b. AMS Industries, Inc.
C. AMS Salt Industries, Inc.
d. Bay Resources, Inc.
e. Nursery Distributors, Inc.
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EXHIBIT "E'
Store # City
------- ----
5 Dearborn Heights, MI
29 Fort Xxxxx, IN
45 Xxxxxxxxxxx, XX
000 Xxxxxxxxxxxx, XX
000 Xxxxxx, XX
000 Xxxxx, XX
000 Xxxxxx Xxxxxx, XX
000 Xxxxxx, XX
266 Cincinnati, OH
000 Xxxxxxxxx, XX
000 Xxxxxxx, XX
000 Xxxxxx, XX
648 Brockton, MA
000 Xxxxxx, XX
000 Xxxxxxxxxxx, XX
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ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned hereby acknowledges and consents to the
execution, delivery and performance of that certain Second Amendment to
Mortgage-Backed Credit Agreement dated as of even date herewith by GENERAL HOST
CORPORATION and FRANK'S NURSERY & CRAFTS, INC. (collectively the "Companies")
and COMERICA BANK, ("Bank"), amending that certain Mortgage-Backed Credit
Agreement dated as of November 29, 1996 between Companies and Bank (the
"Agreement").
This acknowledgement and consent is executed and delivered by the under-
signed in connection with the Guaranty from the undersigned in favor of Bank
and delivered in connection with the Agreement, which Guaranty remains in full
force and effect with respect to indebtedness now or hereafter incurred under
the Agreement, including, but not limited to, the Note.
Capitalized terms used herein and not defined to the contrary have the
meanings given them in the Agreement.
Executed as of the 25th day of July, 1997.
GENERAL HOST HOLDING CORP.
By: Xxxxxx X. Xxxxxxx
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Its: Vice President & Treasurer
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AMS INDUSTRIES, INC.
By: Xxxxxx X. Xxxxxxx
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Its: Vice President & Treasurer
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AMS SALT INDUSTRIES, INC.
By: Xxxxxx X. Xxxxxxx
-------------------------
Its: Vice President & Treasurer
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BAY RESOURCES, INC.
By: Xxxxxx X. Xxxxxxx
-------------------------
Its: Vice President & Treasurer
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NURSERY DISTRIBUTORS, INC.
By: Xxxxxx X. Xxxxxxx
-------------------------
Its: Vice President & Treasurer
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