Exhibit 10.2.2

 

CENTRAL GARDEN & PET COMPANY

 

SECOND AMENDMENT

 

TO CREDIT AGREEMENT

 

This SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of
February 12, 2004 between CENTRAL GARDEN & PET COMPANY, a Delaware corporation
(“Borrower”) and CANADIAN IMPERIAL BANK OF COMMERCE, as administrative agent for
Lenders (“Administrative Agent”), and is made with reference to that certain
Credit Agreement dated as of May 14, 2003, as amended by the First Amendment to
Credit Agreement dated as of October 27, 2003 (the “Credit Agreement”), by and
among Borrower, the financial institutions listed therein as Lenders, the
Co-Syndication Agents named therein, and the Administrative Agent. Capitalized
terms used herein without definition shall have the same meanings herein as set
forth in the Credit Agreement.

 

RECITALS

 

WHEREAS, Borrower, Agents and Lenders desire to amend the Credit Agreement (i)
to permit Borrower to acquire (a) substantially all of the assets of Kent
Marine, Inc. and (b) substantially all of the assets of New England Pottery Co.,
Inc., (ii) to amend the definition of “Cash Equivalents”, (iii) to change the
dates for delivery of Margin Determination Certificates and Financial Plans,
(iv) to provide for Letters of Credit supporting trade payables, and (v) to make
certain other amendments as provided herein;

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:

 

Section 1. AMENDMENTS TO THE CREDIT AGREEMENT

 

1.1 Amendments to Section 1: Definitions

 

A. New Definitions. Subsection 1.1 of the Credit Agreement is hereby amended by
adding the following definitions, inserted in proper alphabetical order:

 

“ ‘Kent Marine Acquisition’ means the acquisition by Borrower of substantially
all of the assets of Kent Marine, Inc. for an aggregate purchase price not to
exceed $9,600,000, on terms and conditions acceptable to Administrative Agent.”

 

“ ‘New England Pottery Acquisition’ means the acquisition by Borrower of
substantially all of the assets of New England Pottery Co., Inc., for an
aggregate cash purchase price not to exceed $69,000,000, plus up to $3,500,000
in investments made in connection with such acquisition, on terms and conditions
acceptable to Administrative Agent.”

--------------------------------------------------------------------------------

B. Cash Equivalents. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of “Cash Equivalents” appearing therein as
follows: (i) by deleting the phrase “the highest rating obtainable from either
S&P or Moody’s” appearing in clauses (ii), (v) and (vi) of such definition and
substituting the phrase “a rating of at least BBB-/A-2 from S&P or at least
Baa3/P-2 from Moody’s” in each case therefor, and (ii) by deleting the phrase “a
rating of at least A-1 from S&P or at least P-1 from Moody’s” appearing in
clause (iii) of such definition and substituting the phrase “a rating of at
least A-2 from S&P or at least P-2 from Moody’s” therefor.

 

C. Letters of Credit. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of “Letter of Credit” appearing therein by
deleting the proviso at the end thereof and substituting the following therefor:
“provided that Letters of Credit may not be issued for the purpose of supporting
any Indebtedness constituting ‘antecedent debt’ (as that term is used in Section
547 of the Bankruptcy Code)”.

 

1.2 Amendments to Section 2: Amounts and Terms of Commitments and Loans

 

Subsection 2.2A of the Credit Agreement is hereby amended by deleting the third
paragraph thereof in its entirety and substituting the following therefor:

 

“Upon delivery of a Margin Determination Certificate by Borrower to
Administrative Agent (a) with respect to each Fiscal Quarter other than each
fourth Fiscal Quarter, within forty-five (45) days after the last day of such
Fiscal Quarter, and (b) with respect to each fourth Fiscal Quarter, within sixty
(60) days after the last day of such fourth Fiscal Quarter (each such date as
described in clauses (a) and (b) hereof a “Certificate Due Date”), the
Applicable Base Rate Margin and Applicable LIBOR Margin shall automatically be
adjusted in accordance with such Margin Determination Certificate, such
adjustment to become effective (1) with respect to each Fiscal Quarter other
than each fourth Fiscal Quarter, on the 60th day after the end of such Fiscal
Quarter and (2) with respect to each fourth Fiscal Quarter, on the 75th day
after the end of such fourth Fiscal Quarter; provided that (A) at any time a
Margin Determination Certificate is not delivered by the applicable Certificate
Due Date, from such Certificate Due Date until delivery of such Margin
Determination Certificate, the Applicable Base Rate Margin shall be 1.25% for
Revolving Loans, and 0.75% for Tranche B Term Loans, and the Applicable LIBOR
Margin shall be 2.75% for Revolving Loans, and 2.25% for Tranche B Term Loans,
and (B) if a Margin Determination Certificate erroneously indicates (as
determined by Administrative Agent after consultation with Borrower) an
applicable margin more favorable to Borrower than should be afforded by the
actual calculation of the Consolidated Total Leverage Ratio, Borrower shall
promptly pay additional interest and letter of credit fees required to correct
for such error.”

 

2

--------------------------------------------------------------------------------

1.3 Amendments to Section 6: Borrower’s Affirmative Covenants

 

A. Accountants’ Certification. Subsection 6.1(v) of the Credit Agreement is
hereby amended by deleting the text thereof in it is entirety and substituting
the following therefor:

 

“(v) Accountants’ Certification: together with each delivery of consolidated
financial statements of Borrower and its Subsidiaries pursuant to subdivision
(ii) above, a written statement by the independent certified public accountants
giving the report thereon (a) stating whether, in connection with their audit
examination, any condition or event that constitutes noncompliance with Section
8 of this Agreement as they relate to accounting matters has come to their
attention and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof; provided that such
accountants shall not be liable by reason of any failure to obtain knowledge of
any such noncompliance that would not be disclosed in the course of their audit
examination, and (b) stating that based on their audit examination nothing has
come to their attention that causes them to believe either or both that the
information contained in the certificates delivered therewith pursuant to
subdivision (iii) above is not correct or that the matters set forth in the
Compliance Certificates delivered therewith pursuant to clause (b) of
subdivision (iii) above for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;”

 

B. Financial Plans. Subsection 6.1(xi) of the Credit Agreement is hereby amended
by deleting the phrase “no later than 30 days after the beginning of each Fiscal
Year” appearing therein and substituting the phrase “no later than 60 days after
the beginning of each Fiscal Year” therefor.

 

1.4 Amendments to Section 7: Borrower’s Negative Covenants

 

Subsection 7.3 of the Credit Agreement is hereby amended by: (i) deleting the
word “and” at the end of clause (vi) thereof, (ii) deleting the period at the
end of clause (vii) thereof and substituting “; and” therefor, and (iii) adding
a new clause (viii) to the end thereof as follows:

 

“(viii) in addition to acquisitions permitted pursuant to clause (v) and
investments permitted pursuant to clause (vi) above, Borrower may consummate the
Kent Acquisition and the New England Pottery Acquisition as described in the
definitions thereof; provided that no Potential Event of Default or Event of
Default shall have occurred or be continuing as a result of any such acquisition
or after giving effect thereto.”

 

Section 2. CONDITIONS TO EFFECTIVENESS

 

Section 1 of this Amendment shall become effective only upon the satisfaction of
all of the following conditions precedent (the date of satisfaction of such
conditions being referred to herein as the “Second Amendment Effective Date”):

 

A. On or before the Second Amendment Effective Date, Borrower shall deliver to
Lenders (or to Administrative Agent for Lenders with sufficient originally
executed copies, where appropriate, for each Lender and its counsel) copies of
this Amendment, executed by Borrower and each Credit Support Party.

 

3

--------------------------------------------------------------------------------

B. On or before the Second Amendment Effective Date, Administrative Agent shall
have executed copies of this Amendment on behalf of itself and consenting
Lenders.

 

C. On or before the Second Amendment Effective Date, 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 Administrative Agent, acting on behalf of Lenders, and its counsel
shall be satisfactory in form and substance to Administrative Agent and such
counsel, and Administrative Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.

 

Section 3. 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 and each Credit Support Party 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 Credit Agreement as amended by this Amendment (the “Amended Agreement”).

 

B. Authorization of Agreements. The execution and delivery of this Amendment and
the performance of the Amended Agreement have been duly authorized by all
necessary corporate action on the part of Borrower and each Credit Support
Party.

 

C. No Conflict. The execution and delivery by Borrower and each Credit Support
Party of this Amendment and the performance by Borrower of the Amended Agreement
do not and will not (i) violate any provision of any law or any governmental
rule or regulation applicable to Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on Borrower or any of its Subsidiaries, (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of Borrower or any of its Subsidiaries,
(iii) result in or require the creation or imposition of any Lien upon any of
the properties or assets of Borrower or any of its Subsidiaries, except pursuant
to the Loan Documents, or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Borrower
or any of its Subsidiaries.

 

D. Governmental Consents. The execution and delivery by Borrower and each Credit
Support Party of this Amendment and the performance by Borrower of the Amended
Agreement do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.

 

4

--------------------------------------------------------------------------------

E. Binding Obligation. This Amendment has been duly executed and delivered by
Borrower and each Credit Support Party and this Amendment and the Amended
Agreement are the legally valid and binding obligations of Borrower and each
Credit Support Party, enforceable against Borrower and each Credit Support Party
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable principles relating to
enforceability.

 

F. Incorporation of Representations and Warranties From Credit Agreement. The
representations and warranties contained in Section 4 of the Credit Agreement
are and will be true, correct and complete in all material respects on and as of
the Second Amendment Effective Date to the same extent as though made on and as
of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.

 

G. Absence of Default. No event has occurred and is continuing or will result
from the consummation of the transactions contemplated by this Amendment that
would constitute an Event of Default or a Potential Event of Default.

 

Section 4. ACKNOWLEDGEMENT AND CONSENT

 

Borrower is a party to certain Collateral Documents pursuant to which Borrower
has created Liens in favor of Administrative Agent on certain Collateral to
secure the Obligations. Each Subsidiary is a party to a Subsidiary Guaranty and
certain Collateral Documents pursuant to which such Subsidiary has (i)
guarantied the Obligations and (ii) created Liens in favor of Administrative
Agent on certain Collateral to secure the obligations of such Subsidiary under
the Subsidiary Guaranty. Borrower and each Subsidiary are collectively referred
to herein as the “Credit Support Parties”, and the Subsidiary Guaranties and
Collateral Documents referred to above are collectively referred to herein as
the “Credit Support Documents”.

 

Each Credit Support Party hereby acknowledges that it has reviewed the terms and
provisions of the Credit Agreement and this Amendment and consents to the
amendment of the Credit Agreement effected pursuant to this Amendment. Each
Credit Support Party hereby confirms that each Credit Support Document to which
it is a party or otherwise bound and all Collateral encumbered thereby will
continue to guaranty or secure, as the case may be, to the fullest extent
possible the payment and performance of all “Obligations,” “Guarantied
Obligations” and “Secured Obligations,” or other similar terms, as the case may
be (in each case as such terms are defined in the applicable Credit Support
Document), including, without limitation, the payment and performance of all
such “Obligations,” “Guarantied Obligations” or “Secured Obligations,” or
similar terms, as the case may be, in respect of the Obligations of Borrower now
or hereafter existing under or in respect of the Amended Agreement and the
Notes.

 

5

--------------------------------------------------------------------------------

Each Credit Support Party acknowledges and agrees that any of the Credit Support
Documents to which it is a party or otherwise bound shall continue in full force
and effect and that all of its obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Each Credit Support Party represents and
warrants that all representations and warranties contained in the Amended
Agreement and the Credit Support Documents to which it is a party or otherwise
bound are true, correct and complete in all material respects on and as of the
Second Amendment Effective Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date.

 

Each Credit Support Party (other than Borrower) acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the Credit Agreement,
this Amendment or any other Loan Document shall be deemed to require the consent
of such Credit Support Party to any future amendments to the Credit Agreement.

 

Section 5. MISCELLANEOUS

 

A. Reference to and Effect on the Credit Agreement and the Other Loan Documents.

 

(i) On and after the Second Amendment Effective Date, each reference in the
Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words
of like import referring to the Credit Agreement, and each reference in the
other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words
of like import referring to the Credit Agreement shall mean and be a reference
to the Amended Agreement.

 

(ii) Except as specifically amended by this Amendment, the Credit Agreement and
the other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.

 

(iii) The execution, delivery and performance of this Amendment shall not,
except as expressly provided herein, constitute a waiver of any provision of, or
operate as a waiver of any right, power or remedy of Agent or any Lender under,
the Credit Agreement or any of the other Loan Documents.

 

B. Fees and Expenses. Borrower acknowledges that all costs, fees and expenses as
described in subsection 10.2 of the Credit Agreement incurred by the
Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Borrower.

 

C. Headings. Section and subsection headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose or be given any substantive effect.

 

6

--------------------------------------------------------------------------------

D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 

E. Counterparts; Effectiveness. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than the provisions of Section 1
hereof, the effectiveness of which is governed by Section 2 hereof) shall become
effective upon the execution of a counterpart hereof by Borrower, each Credit
Support Party and Administrative Agent and the execution of a Lender Consent by
consenting Lenders and receipt by Borrower and Administrative Agent of written
or telephonic notification of such execution and authorization of delivery
thereof.

 

[Remainder of page intentionally left blank]

 

7

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

 

CENTRAL GARDEN & PET COMPANY

By:

 

/s/  Stuart W. Booth

--------------------------------------------------------------------------------

Name:

   

Title:

   

ALL-GLASS AQUARIUM CO., INC.

FOUR PAWS PRODUCTS LTD.

GRANT LABORATORIES, INC.

GRO TEC, INC.

KAYTEE PRODUCTS, INC. MATTHEWS REDWOOD & NURSERY SUPPLY, INC. NORCAL POTTERY
PRODUCTS, INC. OCEANIC SYSTEMS, INC. PENNINGTON SEED INC. OF NEBRASKA PENNINGTON
SEED, INC. PHAETON CORPORATION SEEDS WEST, INC. T.F.H. PUBLICATIONS, INC.
WELLMARK INTERNATIONAL

(for purposes of Section 4 only)

as a Credit Support Party

By:

 

/s/  Stuart W. Booth

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

S-1

--------------------------------------------------------------------------------

CANADIAN IMPERIAL BANK OF COMMERCE,

as Administrative Agent

By:

 

/s/ Dean J. Decker

--------------------------------------------------------------------------------

   

Dean J. Decker

   

Managing Director

   

CIBC World Markets Corp., AS AGENT

 

S-2

--------------------------------------------------------------------------------

EXHIBIT A

to Second Amendment

to Credit Agreement

 

CONSENT OF LENDER

 

Reference is hereby made to the Second Amendment to Credit Agreement (the
“Amendment”) dated as of February     , 2004 by and between Central Garden & Pet
Company, a Delaware corporation (“Borrower”), and Canadian Imperial Bank of
Commerce, as administrative agent for the Lenders (“Administrative Agent”),
which is made with reference to that certain Credit Agreement dated as of May
14, 2003, as amended by the First Amendment to Credit Agreement dated as of
October     , 2003 (the “Credit Agreement”), by and among Borrower, the
financial institutions listed therein as Lenders, the Co-Syndication Agents
listed therein, and the Administrative Agent.

 

The undersigned Lender hereby consents to the execution and delivery of the
Amendment by Administrative Agent on its behalf, substantially in the form of
the draft presented to the undersigned Lender on February     , 2004.

 

Dated: February     , 2004

 

--------------------------------------------------------------------------------

[Name of Institution]

By:

 

 

--------------------------------------------------------------------------------

Name:

 

 

--------------------------------------------------------------------------------

Title:

 

 

--------------------------------------------------------------------------------

 

S-3